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Golden Observation丨Arca Chief Investment Officer: Which encryption fields in the "little bear market" deserve attention?



Jinjin Finance Blockchain, May 24th Recently, the performance of the cryptocurrency market has been very sluggish, and many people feel that the "little bear market" has arrived. Regarding the status quo, Jeff Dorman, chief investment officer of the encryption investment institution Arca, shared his personal views. Let Jinse Finance and everyone take a look.

We found that the cryptocurrency industry has risen sharply since October 2020. Some people can't help but wonder, what is the reason for this?

The first is that the fast money starts to hit the market. According to price changes, the speed of fast money entry does not seem to be faster or slower, and those who try to deploy a fast investment plan will still operate according to plan. Although the Grayscale Bitcoin Trust and Coinbase stock could be leading indicators as downward px volatility suggests fast money has started to slow down.

Golden Morning News | List of important overnight news on December 10: 21:00-7:00 Keywords: Shanghai Municipal Party Committee, French Ministry of Finance, BitPay, Wang Xing

1. Shanghai Municipal Party Committee: actively strive for the pilot application of digital currency;

2. U.S. lawmakers asked the SEC to clarify the rules for brokers related to encryption companies;

3. The French Ministry of Finance announced comprehensive KYC requirements for cryptocurrency companies;

4. Paxos applies for a U.S. federal banking license;

5. Bitcoin payment company BitPay applied to create a National Trust Bank in the United States;

6. V God: Looking forward to having multiple ways to convert CBDC into cryptocurrency;

7. The three major US stock indexes collectively fell, and blockchain concept stocks generally closed down;

8. Bloomberg: Fidelity Digital Assets will provide Bitcoin-backed loans;

9. MicroStrategy announced the convertible note rules;

10. Wang Xing: Cryptocurrency may be the largest wealth transfer in human history. [2020/12/10 14:45:21]

Second is low interest rates/low dollar. Even though there are a lot of inflation data in the market, the US dollar interest rates and prices still have not responded much, and they are still very dovish, which seems to be very beneficial to risk assets.

Exclusive | Jinse Finance’s mining currency data broadcast on February 22: Jinse Finance reported that according to the data of Coinin Mining Pool:

The daily income of mainstream currency mining is: BTC (¥1.11/T), ZEC (¥0.39/T), LTC (¥21.23/G), BSV (¥1.08/T), BCH (¥1.14/T), DASH (¥0.12/G).

The current popular mining machine data and net income are: Avalon A1066 (BTC, ¥26.37), Innosilicon A9+ (ZEC, ¥32.78), Innosilicon A4+ (LTC, ¥6.32). [2020/2/22]

Finally, there is the celebrity effect. As it stands, the social and corporate governance narrative of Elon Musk and some big institutions is unlikely to disappear. As with religion, it's almost impossible to rely on science to change people's minds about religion, so in this light, celebrity seems more political than substantive.

Golden Relativity | Justin Sun: The development of the blockchain industry will continue to be dominated by China and the United States: In today’s Golden Theory of Relativity, Justin Sun, the founder of Tron, pointed out that 2019 is the year when the global blockchain entrepreneurial ecology will flourish. one year. Blockchain practitioners in the United States are very excited about the 10.24 speech. This proves to us that not only the United States is developing blockchain, but China is also developing blockchain. If the United States is not friendly enough to blockchain practitioners and the blockchain industry, and blockchain technology, China will calmly take over the US's position as the leader in the blockchain industry. In the future, I think that the entire blockchain industry will still show a pattern of development led by China and the United States. [2020/1/23]

In the current market environment, if you can see through the above three factors, then your thinking will be clearer when deploying capital investment.

Golden Finance News: U.S. Deputy Secretary of State: Blockchain technology can reduce waste and will save the U.S. State Department billions of dollars. [2017/10/16]

It's worth noting, though, that the following three types of behavior often get investors (especially hedge funds) into trouble: Leverage; shorting (which may seem useful in a down market right now, but doesn't always work); illiquid Positions (a lot of traders suddenly became early stage VCs because there were many "hot deals" this year, but quite a few crypto projects have become less hot now).

You know, even if you have avoided the above three problems, it is still possible to lose money, but this can guarantee that at least you can afford it. Generally, as long as they have a good investment idea, most investors will use two to three times the leverage to sell their margin positions. In the end, when you see which investment targets rise the fastest, you will know what they invested in in the end.

However, some factors prevent the application of the above-mentioned investment behaviors in the field of digital assets. For example, few people generally have distressing experiences in the field of cryptocurrencies; Really want to do it, but most people just can't; and very few people have enough faith to do it.

Theoretically speaking, if you start from a limited value point of view, those assets that are self-sustaining or have real cash flow will not be affected, such as decentralized finance, centralized finance, and some NFT platforms and sports/games platform. Assets that cannot be valued (i.e. Bitcoin and most Layer 1 protocols) are generally the hardest to price.

We found that at the beginning of last year, the stock prices of some social media and telecommuting companies had plummeted before the outbreak of the new crown virus, but the market quickly recognized the opportunity, because these companies will benefit when everyone is isolated at home. Therefore, in the following year, the stocks of such companies have risen sharply, the most famous of which is Zoom.

But in the past two weeks, some "crypto industry opinion leaders" such as Michael Burry, John Paulsen, Kyle Bass, etc. have suffered a lot of losses. is not as good. For ordinary people, choosing a position that suits them, believing in their own analysis, maintaining courage, and controlling their investment emotions can lead to opportunities. Digital assets will not disappear, although sometimes there will be a sharp drop, but as long as the market sentiment rises again, the opportunity to acquire wealth will come.

Some people can't help but ask, when the government/regulators conduct "coordinated attacks" on miners/cryptocurrency exchanges, which areas can bring us better benefits? There are actually a lot of these areas, including: decentralized finance (especially decentralized exchanges), miners in other jurisdictions, censorship resistant storage/archiving (such as Arweave), self-storage/wallets, and of course bitcoin.

In fact, as early as 2008, when the stock exchange was very depressed, there were still many wealthy and savvy buyers who continued to buy stocks, and now it seems that they are basically correct. This requires investors to have extremely firm beliefs. Similarly, a similar thing is happening in the current cryptocurrency market. As long as you have cash in your hand, you don't have to worry about the price level, just continue to deploy in the assets you believe in. As long as your overall valuation is headed in the right direction, it doesn't matter much, you just buy a little at each price point without much thought for when to buy.

Parts of this article are compiled from Twitter


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Golden Observation丨Arca Chief Investment Officer: Which encryption fields in the "little bear market" deserve attention?

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