Author: Liu Jiaolian
BTC rebounded rapidly to 57k this morning. I didn't take advantage of the opportunity to buy the bottom yesterday, and it would be a few points more expensive to add positions today. Hi!
Yesterday's emotions seemed to have reached a limit:
Someone posted a weekly chart, which means that the weekly line has broken and is about to fall deeper. Jiaolian looked at the price hanging below the weekly line, but felt that it was like a pulled spring. The more it was pulled down, the more it would rebound upward.
Someone asked if it was a bear market. Jiaolian asked in return, how do you define a bear market? If we define it as a bull market from the previous historical high (69k in 2021) to the peak of this round of bull market. Then it is still a bull market now.
Someone is waiting to buy the bottom and asks when to add positions. Jiaolian said that for BTC, any time is an opportunity to buy. Don't be greedy and always want to buy the lowest point accurately. Buy in batches. Hold it for ten years.
Another interesting thing is that yesterday's article "The Culprit of This Wave of Market Crash" actually attracted many fellow villagers who suffered in the A-share market to complain in the comment section of the article. Jiaolian then took a look at the market, and it turned out that it had returned to 2900 points.
Although most of the fellow villagers in the A-share market were only concerned with complaining, Jiaolian also found that there were quite a few who were quite insightful. From the negative impact of the short position of BTC futures contracts on the market mentioned in the article, they thought of the transfer and financing, which was also a talent.
In fact, stocks are the company's own "money printing machine". Although there are laws and regulations to watch whether they can open, print, and how much to print. However, after all, the law allows companies to issue additional shares in a legal and compliant manner, which is essentially "printing money" - using the "white paper" printed by the company to exchange the "red paper" in the pockets of investors.
Due to the characteristics of the financial market's cross-time and space transfer of value, it is often "harvested" in the bull market, while "being harvested" has to be postponed to the bear market. This gives retail investors an illusion: everyone is making money in the bull market, and no one will blame the company for taking the opportunity to "print money" on a sunny day. Once it comes to a bear market, everyone's life is not easy. The company also took the opportunity to sell misery first, lay off employees and cut salaries, and put the blame on the environment to win the sympathy of retail investors. Retail investors suffered serious losses. At this time, looking at the market, they are all brothers in distress. They can't find who "harvested" them at all. They can only lament the economic cycle or blame the government.
In fact, the ones who harvested retail investors at 2900 points today are the companies that issued stocks in large quantities during the bull market when everyone was making money, such as 6000 points in 2007, 5000 points in 2015, and 3700 points in 2021. They took advantage of the good days to withdraw money from the market, and then when the bear market came, the tide receded, leaving only retail investors swimming naked.
If the people who hold the legislative power promote the revision of the Securities Law, stipulating that companies are not allowed to issue additional stocks (only stock splits are allowed but not additional issuances), or even forcing listed companies to repurchase and cancel a fixed number of stocks every year, then the stocks issued according to this new rule should be more friendly to retail investors, right?
The issuance of BTC is somewhat similar to such a repurchase and cancellation rule.
At the beginning of 2009, 50 BTC were issued per block, 6 blocks per hour, 24 hours a day, 365 days a year, so the annual issuance was 2.628 million BTC. Phase 0.
Four years later, the issuance per block was halved to 25 BTC. This can be understood in reverse as Satoshi Nakamoto's hand of God forcibly repurchased and cancelled half of the 50, 25. In this way, the annual issuance was halved to 1.314 million BTC. This is equivalent to repurchasing and canceling 1.314 million BTC every year. Phase 1.
Of course, the awesome thing is that Satoshi Nakamoto's hand of God repurchases and cancels 1.314 million BTC every year without spending money, or in other words, Satoshi Nakamoto is equivalent to having unlimited money, no matter how much the BTC price is, he can guarantee the completion of the annual repurchase and cancellation task!
Eight years later, the repurchase and cancellation efforts were increased again! 1.971 million BTC are repurchased and cancelled every year. Only 657,000 BTC are issued per year, which is 12.5 BTC per block, which is halved again. Phase 2.
12 years later, the buyback and cancellation efforts continue to increase! 2,299,500 BTC are repurchased and cancelled each year! The cancellation ratio has increased to 87.5%! The annual issuance volume has further halved to 328,500 BTC, which is 6.25 BTC per block. Phase 3.
16 years later, the buyback and cancellation efforts continue to increase! The annual buyback and cancellation volume has reached 2,463,750 BTC. The cancellation ratio is 93.75%! The annual increase in BTC has dropped to only 164,250, equivalent to 3.125 BTC per block. Phase 4.
This is where we are now in 2024.
Comparing Phase 4 with Phase 3, how many more BTC are cancelled each year? The answer is: 246.375 - 229.95 = 164,250.
One cycle lasts 4 years. How many more BTC will be cancelled in the 4 years of the fourth stage? The answer is: 16.425 x 4 = 657,000. Close to 660,000 - please remember this number.
The recent wave of panic selling, which is not too small, has been overwhelming online, and the big negative news is nothing more than pointing to the Mt.Gox liquidation and the German and American governments selling off the confiscated BTC. The Mt.Gox liquidation can be regarded as the compensation presided over by the Japanese government. Then, someone on the Internet has done some statistics. The government holdings of several countries with relatively large holdings and those that have not been sold yet are as follows: - Mt.Gox (Japan): about 141,700 coins - German government (confiscated by movie2k): 50,000 coins (more than 7,000 coins have been sold, with less than 43,000 coins left) - U.S. government (confiscated in the silkroad case and bitfinex case): about 215,000 coins in total (4,000 coins have been sold, with more than 210,000 coins left) - British government (confiscated in the BlueSky case): about 61,000 coins - Chinese government (confiscated in the PlusToken case): reportedly about 194,000 coins (no on-chain mark, data in doubt; it is also suspected that most of them have been sold when BTC was thousands of dollars before 2020) Even if they are all holding positions to be sold, how much is the total amount? Add the above numbers together and you will know. A total of 661,700 coins.
Mt.Gox pays spot compensation to retail investors. Will everyone sell? Some people will definitely choose to hoard.
Even if all of the above are sold without a single one left, it is only more than 660,000 coins. This number happens to match the additional selling pressure of nearly 660,000 coins cancelled by the Hand of God in this cycle, which we calculated above. It is almost a perfect match!
Whether they sell or not, the cancellation of the Hand of God will not stop.
The amount of 660,000 coins will be neutralized in this cycle anyway.
All of this was foreshadowed by Satoshi Nakamoto when he designed BTC in 2008.
The output is halved, a stroke of genius.
Alex
Kikyo
Brian
Joy