Is it suitable to swap positions in Bitcoin at this stage?

Source: Daoshuo Blockchain

A reader left a message asking this question:

Should I exchange Ethereum for Bitcoin now?

In fact, I have written about this issue in an earlier article. Now that I see this issue again, I think I would like to take this opportunity to share with you some issues worth noting about fixed investment:

< p>That is, once we find that the varieties we have decided to invest in are different from our expectations in some aspects, we must take early action.

When the fixed investment in this round of bear market was first launched, the ratio of Bitcoin price to Ethereum price was about 14:1 to 15:1, that is, one Bitcoin is exchanged for 14 or 15 Ether. Square.

At that time, I set the ratio of Ethereum to be much higher than that of Bitcoin.

Why?

Because after the development of the last bull market, we have all seen that Ethereum has developed a quite rich ecosystem: DeFi, NFT, games, social networking, etc.

And Bitcoin is still just "digital gold" - apart from being the highest consensus value store, there are very few application ecosystems on it.

In this case, I guess that Ethereum will have more growth potential and space in the next bull market, because in such a rich ecosystem, if a new model or new scenario emerges, its The popularity will gather again, and its currency price will increase significantly.

The magic of the encrypted ecosystem is that it can reveal unexpected things at any time and allow us to see new things that we could not imagine.

In this round of bear market, the rise of Bitcoin inscription technology is the first to bear the brunt of the unexpected and unimaginable.

At first, I didn’t care much about this new technology, but after I paid attention to the development of this technology and the growth of this community, I vaguely felt:

If this thing If it can really develop, I'm afraid it will indeed bring us different scenarios.

And it can, to a certain extent, solve the problem of miners’ income being reduced after the Bitcoin block reward becomes smaller, thus affecting the security of the entire network. This phenomenon was particularly obvious as early as May this year - at that time, miners' fee income exceeded the block reward, all thanks to the rise of the Inscription Ecosystem.

In this case, if we continue to ignore the possible follow-up impact of this situation, then our fixed investment may appear slightly inferior.

Therefore, I publicly shared my own follow-up operations in the article on May 22: I will increase the proportion of Bitcoin in subsequent fixed investments.

At that time, the price ratio of Bitcoin and Ethereum was about 15:1.

When I decided to do that, I had two main plans:

First, from the perspective of income, I felt that once Bitcoin’s inscription became ecological and continued until the next bull market, Bitcoin’s price may rise higher than Ethereum’s.

The second is that if you want to participate in the Bitcoin inscription ecology in a large amount in the future, you may have to consume some Bitcoins, so it is necessary to take advantage of the relatively low price to take some extra reserves.

Since then, the development of the inscription ecology has indeed greatly increased the popularity and price of Bitcoin. And in the subsequent time, although Ethereum has also begun to gain popularity for inscriptions, it has never been able to compare with Bitcoin.

This situation continues until now, causing the price ratio between Bitcoin and Ethereum to exceed 19:1.

I believe that Bitcoin Inscription’s popularity will continue, at least until the next bull market.

In my opinion, the impact of ecological development on currency prices also has a marginal effect. This effect will most likely become smaller in the future. In other words, even if Bitcoin's popularity continues to lead, it is difficult to judge how much higher it can push the 19:1 increase in currency price.

Therefore, when it comes to changing positions now, it is not that it is not possible, but that it is difficult to evaluate the potential income.

I can only say that I am not very good at changing positions.

In this process, I think one thing is very important: that is, we must see the signs as early as possible, and after seeing the signs, try to evaluate the possible impact of this sign on the ecology in the future. Once such impact is discovered, there is a high probability that It will affect our profits, so we must act as soon as possible.

If we wait until everyone knows it and the deal is done, not only will it be too late, but at least the benefits will be greatly reduced.