Yesterday (the 13th), the pie regained its key position of $50,000. At this position, many old leeks have been waiting patiently for more than two years. The price also set a record for the pie since December 2021. the highest level.
Many analysts attribute the current rise in the market to the performance of U.S. spot ETFs. According to a CoinShares report, as of last Friday, the newly launched Bitcoin spot ETF (excluding Grayscale’s GBTC) held more than 192,000 BTC, surpassing MicroStrategy’s 190,000 BTC in less than a month. Capital inflows alone exceeded US$1 billion.
In addition to the positive promotion of spot ETFs to the price of the pie, this year is also a critical year for the pie, because the halving of the pie is expected to occur in two months (April), when each region The block reward will drop from the current 6.25 BTC to 3.125 BTC (the last halving occurred in 2020), and the halving is also considered by many to be an early signal of a big bull market.
In addition, in terms of macroeconomics, some macroeconomic analysts also believe that the Federal Reserve may cut interest rates in the third quarter of this year. Spot ETF + BTC halving + Federal Reserve interest rate cut. Under the influence of such comprehensive events, there is a high probability that the second half of this year or next year will usher in a new round of bull market in the crypto market.
So today, let’s continue to briefly talk about the market.
1. Let’s talk from the perspective of market value
Let’s first review the total market capitalization data over the past three crypto cycles. As shown below.
Total crypto market cap in February 2017: $20 billion
Total crypto market cap in February 2021: $1.5 trillion
Total crypto market cap in February 2024: $1.9 trillion
In the three cycles above, the overall crypto market size grew 75x from February 2017 to February 2021. From February 2021 to February 2024, there was an increase of approximately 1.3 times.
Here we can simply make an assumption:
Assuming that by February 2025, the size of the crypto market reaches US$3.8 trillion, and BTC.D (BTC Dominance) accounts for 60%, then the price of BTC will be approximately US$10,8000, which will be higher than where we are now. The level is 2 times higher.
Of course, this is just a simple assumption. If you are bolder, you can also think that the overall size of the crypto market in this round of bull market may reach 6 trillion US dollars (the peak of the last round of bull market was 3 trillion US dollars) , if calculated according to this, then the price of BTC may reach 170,000 US dollars, which will be 3.4 times higher than the level we are at now.
In some of Hua Li Huawai's previous articles, we have also made some subjective predictions about the price of BTC. For now, I personally prefer 100,000-120,000 US dollars, and this range will also be my starting point. Consider the range for selling in lots.
2. Let’s talk from a project perspective
QuantMeta made an interesting statistic a few days ago. The dimension of its statistics is the top 100 projects by market capitalization in each cycle.
The final result is:
Eleven of the top 100 projects in February 2017 are still in the top 100.
47 of the top 100 projects in February 2021 are still in the top 100.
A basic conclusion (hypothesis) can be drawn here. Among the current top 100 projects by market value, it is estimated that at least 50% of the projects will remain in the top 100 in the next bull market.
This seems to be more consistent with the Lindy Effect, that is, the expected lifespan of things is proportional to the time they have existed. Applying it to the encryption field, the more cycles a project survives, the more likely it is to continue to exist. The greater the sex.
There are at least tens of thousands of projects in the encryption field, so if you don’t have that much time and energy to do research, you can give priority to those projects that are currently ranked in the top 100, so that you will have at least half the probability of success in buying potential share.
Of course, this also depends on your own goal setting, position situation and risk management plan. If you are still waiting on the sidelines, or still holding a goal of a hundred times or a thousand times, hoping to be able to make a big difference with a small gain. and get rich overnight, then you don’t need to waste time reading these theoretical articles. You should seize the time to write tens of thousands of projects on paper, and then throw them on the ground to draw lots. You may be able to catch a hundred or a thousand times. Woolen cloth?
And if you have the time and energy to do research, then through the above assumptions we can know that in the next cycle (in the next 1-2 years) there may be 30-50 new projects among the top 100 in market capitalization, and if we can If you bet on these projects in advance, the theoretical benefits that can be realized will be greater.
But this matter is indeed difficult. Take Hua Li Hua Wai as an example. In the past year alone, we have shared/mentioned no less than 1,000 projects through official account articles. Even if we only select possible projects from these 1,000 It is also difficult to buy 30-50 projects, let alone buy 3-5 further targets from them.
Therefore, my suggestion in the past has always been to put at least 50% of the position in big cakes and shaobing, and then only use 20–30% of the position to explore a few potential blue chips. That is to say, you can only focus on the 1-3 tracks that you are most optimistic about (such as AI, GameFi, RWA, etc.), and then select a few projects that are at the top of the corresponding tracks but whose current market value is still outside the 100th place.
3. Let’s talk from the perspective of price
We made an assumption above, assuming that BTC.D (BTC Dominance) accounts for 60% during the bull market, which means that at the peak of the bull market, the overall size of the crypto market may reach US$6 trillion.
So, under this assumption, what price will the altcoin that ranks third in market value reach by then (the first and second rankings will undoubtedly be BTC and ETH, and stablecoins are not included)?
At the peak of the last bull market, the third-ranked project was BNB. At that time, BNB’s market value accounted for 4.3% of the overall size of the crypto market.
Then, if we continue to calculate the third-ranked project in the next big bull market (it may or may not be BNB) at 4.3%, then the market value of the corresponding project will be US$258 billion.
The current market value of BNB is US$50.9 billion, which means that the third-ranked project still has room for growth of about 5 times. Likewise, you can calculate rankings 4–100.
Of course, all of the above is based on assumptions.
In general, we are still some distance away from a bull market. If you are still waiting on the short side, I hope this article can give you some tips from another perspective. At the same time, we must also remember that even a bull market will have a correction. In this process, in addition to the three aspects of goal setting, position status and risk management, mentality is also very important.
4. Let’s talk from the perspective of mentality
Whether investing or doing other things, I think mentality is the most important thing.
In the field of encryption, we often encounter such situations. For example, you have been looking at 25,000 Bitcoins for a long time, but you just didn't buy it. Now you find that it has reached $50,000, which has doubled. You think it is too late to buy now, so you will continue to wait and see. Then, you will continue to watch it rise from 50,000 to 80,000, or even 100,000 US dollars. The further you go, the less you dare to buy, until finally you watch it break through the all-time high, and then you can't help it anymore, so you chase it, and you get trapped. At the top of the mountain.
The core reason here is still a problem of mentality. To put it in more specific professional terms, it is the problem of anchoring effect.
So how can this problem be overcome or solved?
To put it simply, I think we still have to go back to the three aspects I mentioned above, namely goal setting, position status and risk management. If you can think clearly or plan these three aspects clearly, and then execute them according to discipline, then you can basically overcome the above problems.
Let’s take myself as an example:
In terms of goal setting, my goal for this cycle is 3–5x.
In terms of position management, there are three levels: A, B, and C. Class A accounts for 80% of the position and is only used to store BTC on a monthly basis. Class B accounts for 10% of the position, which depends on the situation (I bought a little FET, SOL, AVAX, and ARB in the past year). Class C accounts for 10% of the position and remains unchanged.
In terms of risk management, I have basically only done things that are sure of success in the past few years, and safety is my top priority.
Based on the above plan, starting from 2022, when Bitcoin was in the range of 38,000-40,000, I began to invest in BTC on a monthly basis. Because my expectation for the future of BTC at that time was 100,000-120,000, so I decided to invest all the way from 38,000 to 15,000, and then fixed investment all the way from 15,000 to 40,000. And during this period, I basically didn’t care about the K-line and price fluctuations. The core reason why I was able to persist and hold on so hard was because I strictly followed my own discipline (target + position + risk) before executing.
Of course, I will also face a lot of temptations in this process, but I basically choose to miss them or not participate. Because everyone’s time, energy, and investment are limited, and it is impossible to do everything well. You need to make a choice from your own perspective. I think it is enough to do only 1-2 things well. For me, writing articles (i.e., keeping myself informed and learning about this field through self-media) is a personal hobby, and stocking coins (fixed investment in the pie) is a personal investment strategy. I only need to do these two things well. Enough, no matter how many temptations there are, I can choose to turn a blind eye. As for how to write articles, what content to write, how to stock up on big cakes, when to start stocking up... these are all basically based on your own ideas, and will not be influenced or influenced by anyone.
In this field, if you only focus on airdrops and achieve your personal perfection, you can make money just by doing airdrops. If you only focus on trading and can do it as well as professional traders, you can also make money by doing short-term trading. If you like writing articles like me, then as long as self-media becomes the leader in this industry, you will definitely make money. If you are busy with work and have no time to study and research in this field, then just invest in big cakes and sesame cakes. This is the simplest and least error-prone investment path (as long as you insist on buying in the bear market and selling in batches in the bull market, you will be the same) Can outperform many people). etc. In short, everyone should have their own choice and do what they like most and are most confident about, instead of living in other people's so-called words or envying other people's so-called achievements.
Buffett also said: Patience is the best friend in investing.
Therefore, be more patient, think more, maintain a good attitude, and seize the opportunities you can. If you stick to this for 1-2 cycles, I believe you will definitely outperform many people.
Okay, we will share the content of this issue here for the time being. This is also the 409th article updated by Hua Li Huawai. We will continue to bring you more related sharing later. Interested friends can contact us through Hua Li Hua. Check out Li Huawai to learn more.
Note: The above content is only a personal perspective and analysis. It is only used for popular science learning and communication and does not constitute any investment advice. The crypto market is an extremely high-risk area. Please treat it rationally, increase your awareness of risk prevention, and abide by the relevant laws and regulations of the country and region where you are located!
