Bitcoin is one of the investment targets with the largest price fluctuations, and is also the best investment target for ordinary people to "get rich overnight".
Bitcoin is the most tenacious investment target. The history of has proven that supervision cannot eliminate it, and various negative aspects cannot destroy it.
Bitcoin is the investment target with the simplest logic and the investment target with the clearest trend.
This wave of Bitcoin prices started in November 2020, with a maximum increase of 18 times.
Now, the price of Bitcoin has dropped from US$69,000 to US$20,000, once falling below US$18,000, with a maximum drop of 75%.
The question is, can buy bottom Bitcoin and wait to get rich overnight?
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prospered because of money and fell because of money!
Let me first explain a question: Why does Bitcoin surge and plummet, causing periodic price fluctuations?
One reason is the impact of the global monetary policy cycle.
For example, this round of Bitcoin prices started at the end of 2020. An important macro background at that time was that major central banks around the world, including the Federal Reserve, the European Central Bank, and the Bank of Japan, released unprecedented fluidity.
Not only Bitcoin, but also the stock market, housing prices, gold, resources, etc., the prices of all assets around the world are soaring.
This time the price of Bitcoin plummeted, which also began with the Fed's interest rate hike cycle. Starting from the end of 2021, when expectations for interest rate hikes were strongest, Bitcoin prices have been falling.
Of course, it’s not just Bitcoin that’s falling at the same time, but also house prices, gold, and global stock markets.
This is by no means an accidental factor, but a rule. Past Bitcoin price cycles also followed similar logic.
For example, the last time Bitcoin prices plummeted began at the end of 2017 and early 2018. At that time, the Federal Reserve was also in an interest rate hike cycle and global central banks were in a tightening cycle.
Currency is the image of all assets, but Bitcoin reflects this logic more purely.
First of all, the proliferation of legal currency , whether it is the financial market or digital currency , their prices have skyrocketed, which is a reflection of the crazy depreciation of legal currency.
The "reputation" of currency comes from "scarcity". When something can be mass-produced, the "reputation" of this thing as a currency attribute will be lost.
Secondly, as a currency, legal currency has almost no credibility, even the US dollar, which is the most reputable currency in the world.
Look at the speed at which the U.S. dollar is being issued:
From 1929 to the present, U.S. dollar banknotes have increased 330 times, while the U.S. economy has actually grown 16 times, and the gold stock has only increased 6.7 times.
Counting since 1971, US dollar banknotes have increased 21 times, the U.S. economy has actually grown 2.7 times, and gold has only increased 1.1 times.
In the long term, the price of assets such as Bitcoin will always rise. The logical basis is that legal currencies will be rampant.
At this point, the logic of Bitcoin is clear: the trend of Bitcoin is rising, and the logical basis is that legal currency is flooding;
The price of Bitcoin fluctuates cyclically, and the logical basis is the monetary policy cycle of global central banks such as the Federal Reserve.
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Halved every four years, comes around every four years!
Of course, in addition to the global monetary policy cycle, the Bitcoin price cycle has its own cyclical determination.
At the beginning of the design, Bitcoin had several rules: 1. The total amount of Bitcoin is constant; 2. Bitcoin mining is halved;
Everyone involved in this game is a slave to the rules. These rules are written inevitable event in the code.
This concept alone has attracted a large number of believers and is also one of the roots of Bitcoin’s long-lasting prosperity.
Historically, Bitcoin has had three halvings:
The first halving occurred on November 28, 2012, and the Bitcoin reward dropped from 50 BTC to 25 BTC;
The second halving occurred on July 9, 2016 On May 12, 2020, the Bitcoin reward dropped from 25 BTC to 12.5 BTC;
The third halving occurred on May 12, 2020, and the Bitcoin reward dropped from 12.5 BTC to 6.25 BTC.
Every time the reward is halved, combined with the monetary policy cycle, it gave birth to a Bitcoin bull market!
. Bitcoin cycle from 2011 to the end of 2013: (4 years)
In June 2011, Bitcoin was as high as $32; in November 2011, Bitcoin was as low as $2.
Bitcoin retracement fell by 94%, and the retracement duration: half a year.
Bitcoin reward halving time: November 28, 2012
Bitcoin's new bull market start time: January 2013.
The price of Bitcoin in the bull market reached a maximum of 1,241 US dollars, an increase of 620 times!
, the end of 2014-the end of 2017. (4 years)
At the end of 2013, the highest price of Bitcoin was US$1,241; in January 2015, the lowest price of Bitcoin was US$157.
Bitcoin retracement fell by 87%; retracement duration: 1 year.
Bitcoin reward halving time: July 9, 2016
Bitcoin's new bull market start time: January 2017.
In the bull market, the price of Bitcoin reached a maximum of 19,870 US dollars, an increase of 126 times!
3. From the end of 2017 to the end of 2021 (4 years)
At the end of 2017, the Bitcoin price was as high as US$19,870; at the end of 2018, the Bitcoin price was as low as US$3,177.
Bitcoin retracement amplitude, 80% (estimated); retracement duration, one year (estimated).
Bitcoin reward halving time: May 12, 2020
Bitcoin's new bull market start time: November 2020.
The price of Bitcoin reached a maximum of $69,000 in the bull market, an increase of 22 times!
According to the cycle rules of Bitcoin, we can simply deduce the next major cycle of Bitcoin.
. Rule: Bitcoin continues to fall for 1 year; speculation: This round of Bitcoin bear market should last until the end of 2022.
A very important variable is the Fed's interest rate hike cycle.
According to current inflation expectations, the Federal Reserve will continue to raise interest rates in the next few months, and the rate hike will not be reduced.
Of course, according to current economic growth expectations, the probability of the U.S. economy falling into recession has increased sharply, which also means that the Fed's interest rate hike cycle is almost over.
Therefore, considering the Fed’s monetary policy approach, it is logical for the Bitcoin price bear market to continue until the end of 2022.
. Rule: Bitcoin price will fall by at least 80%; speculation: The lowest price of Bitcoin in this round is about US$14,000.
The current price of Bitcoin is around US$20,000, and "theoretically" there is still a 30% drop at most.
So, what factors will trigger a further decline in the price of Bitcoin?
First, the storm of interest rate hikes by the Federal Reserve has suddenly intensified, sweeping all assets, and Bitcoin will also suffer.
Second, accidental factors, such as geopolitical instability, digital currency exchanges being coerced by authorities, or even being attacked by hostile hackers, cause a short-term impact on confidence.
Third, accidental events impact confidence, and "giant whales" set off huge waves.
3. Rule: Bitcoin rewards are halved every 4 years; speculation: the next Bitcoin halving will be in the first quarter of 2024.
The total circulation limit of Bitcoin is 21 million, which means that the maximum number of Bitcoins is only 21 million. If
wants to obtain Bitcoin, on the one hand, he can go to the market and buy it directly; the other way is to use computing power to "mine", but the mining reward is halved according to the difficulty.
It is estimated that the last Bitcoin will be mined after the 64th halving, which will probably occur in 2140, by which time the block reward will be reduced to 0.
Currently, Bitcoin reward halving has occurred three times, with an average halving every 4 years. The next halving is expected to be in the first quarter of 2024.
4. Rule: The halving of Bitcoin rewards will trigger a bull market; speculation: the next Bitcoin bull market will start in the third quarter of 2024.
5. Pattern: In the previous rounds, Bitcoin rose 620 times, 126 times, and 20 times; speculation: In the next round, Bitcoin rose 10 times? Maximum price is $140,000.
We can see that as time goes by, the price of Bitcoin increases less and less, and finally it becomes like gold, a perfect reflection of legal currency.
This means that the opportunities for ordinary people to get rich will slowly close.
To summarize:
According to past rules and the current monetary policy approach, the current Bitcoin bear market will last until the end of 2022 at most, and the price will fall by up to 30%; but the next round of Bitcoin prices may rise to $140,000. The 130% drop of
html is nothing to the fluctuation range of Bitcoin, and considering the future price increase, investors trading on the right can buy the bottom in batches at the current price!
After buying the bottom, surviving the last drop caused by accidental events and surviving two mediocre years is victory.
