Bitcoin halved, shanzhai began its spring
Original | Liu Jiaolian
The setting sun and loneliness go hand in hand, and the autumn water is full of color.
Little by little, little by little, the footsteps of spring are getting closer. Little by little, little by little,BitcoinThe halving of (BTC) production is also near. I already mentioned in the article “Bitcoin Is Escaping Gravitation” yesterday 27th, “In more than 20 days, the Level 4 rocket will burn out, and the Level 5 rocket will be launched to continue to push us to the sea of stars!”
The BTC production halving event is a major event in the crypto industry. This is the time for the rocket to switch. Once the switch is successful, the new tier 1 rocket will push BTC farther and deeper into space.
This is a big deal not only for BTC, but also for altcoins. Before and after halving, BTC's share will reach a local high. Then, as the bull market progresses, it will gradually fall. When the bull market is at its craziest, it will reach its lowest point. This means that altcoins are racing to rise one after another, falling into a frenzy known as the “copycat season”!
BTC was snubbed when the crowd was fighting for pride. As pictured in the words:
Outside the station, the side of the bridge is broken, and loneliness drives nowhere.
There is no intention of fighting hard for spring; people will always be jealous.
The picture above is from “Spring in the Shanzhai” from the teaching chain on December 9, 2023. In other words, four months ago, the education chain suggested the 2024 halving and the imminent arrival of the copycat season in internal consultation. Here's what Naesanri said at the time:
“Now it's almost 2024, and it's almost halved. Spring at the cottage. Spring is the season for planting seeds. If you pick a good seed, when summer arrives and mobility spreads, it will suddenly grow into a towering tree. If you grow melons, you get melons; if you grow beans, you get beans. It's like Teaching Chain started growing less than 2 knives in October 2020. However, fruit harvesting helps. After rapid maturity, fruit must be picked in time. Don't wait for the fruit to rot in the ground. Risk control is critical. Do not exceed 10% of positions. Try and see if you can beat it. Be prepared to run and lose. Be prepared for the worst.”
As of February 28 of this year, the teaching chain article “Many Cryptographers Are Bullish on ETH/BTC, May Drive the Outbreak of the Counterfeit Season” quoted netizen Negentropic's opinion that the rebound of ETH/BTC will drive the exchange rate during the copycat season, and this will be the Blow-Off Top (Blow-Off Top) model of the Elliott Wave Theory.
Let's take a closer look at the evolution of the cottage season over the past few cycles, and learn from history.
2016 cottage season
In 2016, after BTC production was halved, after 7-8 months of sluggishness and preparation, it was only in 2017 that it rapidly exploded with the start of the big BTC bull market.
Note, however, that in 2016-2017, the counterfeit market was almost non-existent. Prior to the outbreak of the copycat season in 2017, BTC had an absolute dominance of over 95% of the market.
Cottage season in 2020
In 2020, after BTC production was cut in half, this time it couldn't wait to begin to accelerate. By the first half of 2021, as BTC reached the top of the first minor bull, the total market value of shanzhai also reached a partially high level. Then, during the “519” violent pullback in the middle of the year, it also fluctuated sharply downward. At the end of 2021, with BTC peaking for the second time, Shanzhai also began its second spring.
From this, we can observe:
First, the outbreak of the copycat season is closely dependent on the explosive pace of BTC. BTC is slow first and then fast, and the copycat season suppresses its rise first, such as 2017. BTC plummeted and fell again, and during the copycat season, it also rushed back again, then rushed back again.
This is a good confirmation of what Education Chain has said many times, “Only Bitcoin is capable of starting a bull market” (Wenxi Jiaochain 2023.1.30 article “Bitcoin is rising every day”).
The decline in BTC production is the reason (internal cause) of the bull market. The bull market is another reason why it's copycat season.
It can be said that any argument that a certain copycat will create a bull market. Whether it is an ICO in 2017, or if DeFi and new public chains created a bull market in 2021, or if RWA, DePin, or something in 2024-2025 will create a bull market, there are all kinds of arguments, without exception, either simply don't understand, or are just plain fooling around. Abbreviated as “not stupid is bad”.
Second, after the halving, whether downward or upward, the preparation time for the pullback is only a short window. Investors who want to find alpha (financial term: excess yield above the benchmark yield beta) in 2024 won't have much time to carefully select and slowly open positions.
Just like in 2020, before the bull market broke out, when Uniswap opened 8 dollars higher and fell below 2 dollars, it started opening positions (see “Uniswap (UNI) Valuation Analysis and Investment Plan” in the 2020.11.7 article “Uniswap (UNI) Valuation Analysis and Investment Plan”). However, due to the rapid start of the bull market, the cost of adding positions was quickly raised. Through bulls and bears, to today, the 12-dollar UNI position is only slightly profitable; it is far from outperforming BTC. (Regarding the review of UNI investment, interested friends can read the summary of the teaching chain, namely the 2024.3.8 article “UNI (Uniswap) Investment Experience”, the 2024.2.26 article “Uniswap (UNI) Phase II Practical Review: Lessons from Real Money”, and the 2021.3.9 article “Uniswap (UNI) Actual Review: Standing in the top 10 in market capitalization, significantly outperforming Bitcoin”)
However, the mentality of the teaching chain is lackluster about this “search for alpha” experiment. On January 1, 2021, the well-informed teaching chain wrote the article “Why Can't Your Investment Outperform Bitcoin?” In fact, the transcendental reasoning of the teaching chain has also been confirmed by some empirical research studies. It has already been introduced in the 2024.1.4 Education Chain section “Most Popular Sectors Can't Outperform BTC”.
In the crypto industry, the beta strategy is to hold BTC unchanged, 1 BTC = 1 BTC. The alpha strategy can generate excess income compared to holding BTC without moving, which is the part that outperforms BTC.
BTC is the gold standard. Bitcoin is the new gold standard.
Therefore, alpha excess earnings mean that exchanging BTC can increase the absolute amount of BTC in your hands.
Whether it's from a priori theory or the experimental verification of Teach Chain personally, it has proven an ironclad truth: if you own a copycat, you must sell it in a bull market, and implement Alpha's excess earnings into a real BTC spot. The best time is when the copycat outperforms BTC by a large margin.
At least, part of Alpha's excess earnings must be reduced and exchanged for BTC.
In this sense, holding copyrights is equivalent to a soft kind of leverage. Using a leveraged mindset and perspective to examine an altcoin may give you a new understanding and thorough understanding.
Let's abandon fiat-based yield thinking and goals, like 10x, 100x, etc. In exchange for the BTC standard, just ask if a bull market in your shanzhai can run 5 times the alpha?
In other words, turn the current cottage worth 1 BTC into 5 actual spot BTCs.
can? That would be so cool!
Can't? Then let's just be honest and stock up on BTC.
(Official account: Liu Jiaolin. (Knowledge Planet: Reply to “Planet” on the official account)
(Disclaimer: Nothing in this article constitutes investment advice. Cryptocurrency is an extremely risky breed, and there is a risk that it will return to zero at any time, so please participate carefully and be responsible for yourself.)
