Q&A series on basic concepts of Bitcoin (Part 3)

Author: Weisha Zhu

——Answers to the concepts in the article "Invite Satoshi Nakamoto to Welcome the New World"

11. Bitcoin's rise is fueled by speculative money

12. Bitcoin is highly volatile; newcomers should not increase their leverage

13. What is the good news of Bitcoin's rising

14. Unique Indicators to observe Bitcoin and Blockchain Rise

15. The view of evaluating the stock market is not suitable for evaluating Bitcoin

16. All purely mathematical predictions about Bitcoin are unreliable

17. Bitcoin's premium should be higher than that of gold

18. Gold and the Nasdaq are the comparisons for bitcoin

19. The technical indicators of the stock market are suitable for Bitcoin

20. For Long-term investment, look at Satoshi Nakamoto; for a short-term investment, you will

21. The view that Bitcoin is suitable for diversification

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This section is the judgment point to observe the rise of Bitcoin. I will not speculate on the short-term; this method is not a method of monitoring the short-term. Short-term is another technique. In addition, because Bitcoin has no ceiling, the decline depends on speculative funds, which is beyond the scope of my knowledge. However, there is empirical data that is helpful in the short term. For example, when Bitcoin accounts for 40% of the market value of the blockchain, it will fall. However, empirical data is not valid for a short time. Just as the winning or losing of a casino is a probability, any so-called experience indicators are invalid.

11. Bitcoin's rise is fueled by speculative money

On this point, Mr. Buffett is right. If Bitcoin wants to outperform the rise of the stock market index again, it must meet Buffett's requirements and be promoted by significant investment funds. Because it is easy for small stocks to outperform the stock market in stages, but it is not easy for extensive blue chip stocks. Bitcoin is already a "big blue chip" in the stock market, and it is difficult to catch up with the index unless there is good news for bitcoin.

12. Bitcoin is highly volatile; newcomers should not increase their leverage

The blockchain is a straightforward card. All exchanges are self-operated, and they can see the cards of all retail investors. Retail investors are betting with bankers. Do you have a chance of winning? It is very different from the stock market. Exchanges that do not charge fees rely on lending and self-operation.

13. What is the good news of Bitcoin's rising

Unlike the stock market, Bitcoin has very little good news. On the macro level, Favorable policy, including the Fed's movements; Favorable laws. Micro-level usability improvements are Favorable. However, the same negative adjustment is much faster than the stock market. Therefore, the short-term risk is much greater than that of the stock market.

14. Unique Indicators to observe Bitcoin and Blockchain Rise

We cannot know precisely how much money is in the stock and foreign exchange markets. Blockchain funding is transparent. The market value of the three significant stablecoins increases due to the inflow of outside funds. When there is an inflow of funds, the coins will rise. There should be a corresponding relationship between coin prices and capital inflows. I don't do any short-term research. It is unknown whether the statistics of Coinmarketcap are complete. Still, it is believed that the statistical samples are the same and can be used as a relative basis for comparison. There must be a corresponding relationship between the trading volume of Bitcoin and Ethereum and the stablecoins. There is a complementary relationship between the market value of stablecoins and their trading volume. Stablecoin outflows, a lagging indicator. The ratio of the market value of the blockchain to the market value of the stablecoins is also a short-term judgment indicator.

15. The view of evaluating the stock market is not suitable for assessing Bitcoin

The stock represents the enterprise's equity and the stock investment, which can generate profits. Bitcoin is a commodity whose value depends on scarcity, also called intrinsic value. The measure of intrinsic value is the computing power bottom. Inherent value is different from market value. Market value depends on demand. The price of the same air ticket is different at different times. It is the difference between commodities and stocks. But the technical indicators of the stock market apply to Bitcoin.

16. All purely mathematical predictions about Bitcoin are unreliable

The pure mathematical prediction of PlanB cannot be used for Bitcoin. To analyze based on various indicators and news, apply the method of stock market analysts.

17. Bitcoin's premium should be higher than that of gold

The average cost of gold is $1,000 per ounce, and the current price is around $2,000. The price corresponding to Bitcoin is around $40,000. Due to the small size of Bitcoin and its growth period, it is normal for the premium to be higher than that of gold.

18. Gold and the Nasdaq are the comparisons for bitcoin

Prices are formed by comparison, which is the price comparison effect. The price of Bitcoin is high or low, one is to refer to its historical price, and the other is to select relevant comparison objects. The key is whether the comparison object is correct. Bitcoin and gold are comparable reference objects. They are all commodities with similar characteristics. In the past one or two years, the correlation between the rise and fall of Bitcoin and the rise and fall of U.S. stocks has risen. As we analyzed in the previous article, Bitcoin is currently lagging behind in the stock market. The stock market did not dare to rise at a high point, and Bitcoin fell too much, and the price comparison effect was at work.

19. The technical indicators of the stock market are suitable for Bitcoin

The stock market has very mature statistical indicators, such as moving averages, Bollinger Bands, etc. These indicators are suitable for short-term as well as long-term. These indicators are not necessarily suitable for small coins in the blockchain. But it must apply to Bitcoin. Generally speaking, these indicators have reference significance under the condition of calm news.

20. For Long-term investment, look at Satoshi Nakamoto; for a short-term investment, you will

Satoshi Nakamoto is equivalent to the "major shareholder" of Bitcoin, and the stock market attaches great importance to major shareholder's movements. The sale of shares by the controlling shareholder is often interpreted as unfavorable. Bitcoin has no "performance" and theoretically has nothing to do with "major shareholders." But Satoshi Nakamoto disappeared and never reappeared. The market understands that he is different from ordinary people. No matter how many times the ups and downs of Bitcoin, he has remained unmoved. Following Satoshi Nakamoto as a long-term investor is at least the level of Satoshi Nakamoto.

21. The view that Bitcoin is suitable for diversification

The future of Bitcoin is promising, but the uncertainty is high, and it is reasonable as an asset allocation. It is unreasonable to bet heavily.

written in the back

This series provides the conceptual explanations and summaries needed to read chapters 10-13 of the article "Invite Satoshi Nakamoto to welcome the new world" and the previous article Q&A 1-10.

1. Full-text links

This article was published in Bitui Serial.

Chinese link:

https://www.bitpush.news/articles/tag/%E8%AF%B7%E5%87%BA%E4%B8%AD%E6%9C%AC%E8%81%AA

English link: https://en.bitpush.news/?s=Weisha+Zhu

2. Supplementary video explanation (over the wall in China)

This series of articles has been explained on Sun TV, and the papers and TV explanations are complementary.

The TV show is the interpretation of the point of the article. Broadcast schedule: The broadcast schedule is as follows:

Every 1, 3, and 5, Beijing time noon.

Sun TV's link is as follows:

https://www.youtube.com/watch?v=5dTend6oJ-8

The whole program is divided into two parts. The first part proves who Satoshi Nakamoto is, and the second part is about the Bitcoin standard. The program will continue, followed by discussions and Q&A, hoping to form a Bitcoin-based theoretical system. Users are welcome to leave messages in the TV comment area, and viewers will be selected to participate in the conversation.

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