Editor’s note: This article from the blue fox notes (ID:lanhubiji), Boris Hristov, the author of this article from the medium.com, translation: Leo, authorized reprint by Odaily daily planet.
After bitcoin prices in December last year reached the highest point in history, has been a downward trend, and now entered a bear market.
This paper presents a problem: if bitcoin can be restored to the highest point in history, it needs many new admission funds in order to do? In this paper, that require new funds $200-900 admission chance. These funds will come from? Crypto currency retail investors? Institutional investors? The family fund? The population of high net worth? Or through bitcoin case development, from where the gold to win market share? Or a settlement?
Finally, by pulling the speculation is not sustainable. The only real case is supported.
Crypto currency market adjustment in winter. In the past few months, many people have made the scope of bitcoin adjustments, from 30%-90%. It is the logic of that we have encountered the same situation, but also always recovered.
Indeed, bitcoin history has dropped more than 80%, and later recovered, the impressive. This may also have a chance to do it.
However, each new adjustment will become more and more difficult.
I would like to draw your attention to trading volume adjustment table is often overlooked, is the need to how much money can be restored to the trading price before the highest point. The following data from coinmarketcap. In order to simplify, this does not include the amount of OTC, the amount of OTC is estimated to be the same.
2013-2015 years of adjustment, although the decline in percentage terms is very similar, but the trading volume in dollar denominated completely cannot be mention in the same breath. At present, both the magnitude of the gap of more than 200 times.
In order to predict the return to the trading volume on a highest point required, assuming that November 26, 2018 is the lowest point (see also the lowest breakthrough today.) , adjusted 1-4 times before the. This seems to be a good assumption, if it is not slightly conservative. It could be anywhere between 1-4 times.
2013-2015 bear market trading volume need 4 times to return to the highest point of the last. 1) because it spent more than a year; 2) less then 3 encryption investors;) was a small amount of funds a lot. The following is the trading volume according to the factors of the sensitivity of the table (figures is trillion) – this is the table of 3.2 trillion.
However, the trading volume is not a good indicator. We need new currency funds to promote recovery of admission. A method is to calculate the velocity of currency trading volume, that is to say, how many times per unit of the admission of new currency transactions. We have a trading robot, which will make you hard to find out the real situation of transaction. Let us consider 50-100x. I don’t know if this is not enough, or high or low. (Translation: if you have better data, welcome message on)
If we use 100x, which means 200-900 billion dollars in the admission of new funds to make bitcoin prices return to the highest point of $20000.
This paper uses the method of cross examination, which is also a method, it will approach FabI amplifier and the corresponding changes based on market value. Chris Bernice had analyzed, he tried to estimate the corresponding impact on the market value of the $1 out of the market according to the 2017 April people must pay taxes. He put forward the range factor of 2-25 times, and 50 times mentioned. Who knows what is right……
In order to return to the highest point before, BTC needs to return to a market value of $285 billion ($60 billion, currently only 2018 years, according to the 12 month 7 days the price is more difficult.). If based on the assumption that the range of amplifier, this implies the need for 60 to 140 billion billion in new capital to push to the currency before entering the high.
In a word, according to the above two methods, we seem to need 10 billion to $100 billion. (Translation: This is a little big.)
So, the question is, where does the money come from?
On the one hand, to buy low and sell high investors with funds. But considering that many retail investors lost money, admission to a large amount of new money in the short term is unlikely.
So, the only institution. The first thing to note is that not all of the funds available for investment encryption assets, there will be a variety of reasons, including the focus on different asset classes, authorization, supervision, custody, or other restrictions is not interested in.
Let us assume that $50 billion admission funds. If investors can and want to invest their assets to asset allocation of 1% encryption, which means that at least $5 trillion to join the various fund management have a chance.
No problem。 The global fund management assets totaled US $80 trillion.
However, this is misleading. We must put those unable or unwilling to buy assets such as encryption mechanism, funds, private equity, venture capital, net fixed income, equity out of pure. It occupies a large part of the amount of money.
What’s left? Offbeat investors.
Let us take a look at the non encrypted hedge fund. About in the global management of funds of about $3 trillion at present. Among them, many strategies with bitcoin does not have any relevance, there is no reason to buy.
Potential candidates include macro fund, CTA, alternative strategy and the Multi Strategy Fund, here a total of $600 billion in total assets management. In addition, held 2017 HF commodity assets total is $300 billion. While bitcoin may have the opportunity to enter this field.
In order to enable investors to enter the market correctly, we need to exchange, OTC and ETF, hosting.
We can also expect family funds and high net worth individuals to enter, but they need to have proper infrastructure. Interestingly, in a bull market, investors will be the last admission of the group, which is usually the phenomenon in this field.
So, these investors can put $50 billion into the encryption market? Maybe。 But for the price before the push to high is not enough.
Bitcoin is good for other cases. The above analysis is involved in the “investment” case. However, there is the “store of value” of the case, it is the other type of buyers into the market, the central bank and the ordinary depositors. This is bitcoin can take a slice from the gold market share in place.
In addition, if the “replace offshore funds” the case began to be accepted, it will release hundreds of billions of corporate cash flow. Finally, the realization of “pay” and other similar cases by lightning network channel will have effect.
For these additional cases, in addition to hosting and exchange, we need a wallet, business tools, lending infrastructure, all of which are under development.
In a word, to return to the previous highest point, reaching number level higher than $20000, it seems that we need a lot of bitcoin case can become a reality.
Finally, the above figures include only bitcoin. It is only to recover from a number of serious adjustment of the encryption of assets. All other assets are encrypted first receives the test. Some will survive, while others will not.
So, please remember, that bitcoin still maintain the dominant position of around 50%, according to the legal tender calculation, we need the highest point 2 times in the history of bitcoin inflows of funds to promote the overall market return to its previous $800 billion. (Translation: this means that if the new admission amount of money at least twice to pull the whole market.)