Original | Liu Jiaolian
At about 4 pm yesterday, BTC failed to reach 62k, and then fell all the way, falling below 60k this morning, and is currently temporarily falling to the 58-59k range. After looking around, there is no other negative news except for the fact that the control of the largest cross-chain asset WBTC was transferred to an entity suspected to be controlled by Justin Sun, which caused dissatisfaction and fierce reactions in the industry, as mentioned in yesterday's article "WBTC caused a huge shock". It can be seen that Sun Yuchen may have to bear the blame for this wave of decline from 62k to 58k.
Last Wednesday was the beginning of autumn. As soon as the beginning of autumn arrived, the weather immediately became cooler. Not only is the weather getting more autumnal, but even the public encrypted blockchain is also very cold. Yesterday [8.11 The internal reference of the blockchain said that the gas fee of Ethereum has dropped to 1 gwei], which shows the low activity on the chain and the cool ecology. I don’t know whether I should be happy that expansion seems to no longer be a problem, or should I be ashamed that everyone is swimming naked when the tide recedes, hehe~
This morning I talked to my child about the motto that Apple founder Steve Jobs once quoted: Stay hungry, stay foolish. I explained to my child that stay means to maintain, hungry means to be hungry, and stay hungry means to stay hungry. The so-called staying hungry means that people should not eat too much. What will happen if people eat too much? My child said that people will feel bloated if they eat too much. I said, yes, if you eat too much, you will become sloppy and lose your enterprising spirit, so you should never be full or overeating at any time.
And foolish means stupid, what does stay foolish mean? The kid said, stay stupid? How do you explain this? I said, stay stupid is to warn us not to be too smart, because being too smart will often lead to big mistakes. For example, in the financial market, don't think you are smarter than others, and think you can buy at a low point and sell at a high point. The kid said, the smarter you think you are, the more you tend to buy high and sell low. I said, that's right, so we must deeply understand our stupidity, do things in a down-to-earth manner, and don't have the mentality of taking shortcuts. This is the real wisdom of foolishness.
It is important for people to know themselves. The teaching chain has experienced ups and downs in the encryption cycle. Along the way, not to mention the distant past, just talk about the recent years, from 2018 to 2024, I have met many smart friends who have to show off their wit, compete with each other, and show off their intelligence in the teaching chain community. Basically, a round of bull and bear markets disappears in the long river of history.
Over the years, Jiaolian has never seen anyone who claims to be smart and can beat the market, but was not defeated and eliminated by the market. Jiaolian has seen countless people who are arrogant and try to kill themselves, but in the end they get what they want and die a worthy death.
The more you see, the more you will be in awe of this market. There are always people who are better than you, and there are always higher things. And the people who are better than you, even the ones who are the best, are still below you.
The more mature the investor, the more foolish they appear to be. For example, most investors like Powell and Yellen use the classic 60/40 investment portfolio to manage their family wealth.
Sometimes people fall into a strange mentality. When buying cars or home appliances, most people will choose the best-selling, most popular, and well-known brands that have been verified by most people. But when it comes to buying investment products, they suddenly do something stupid and have to buy niche stocks and Altcoin. They always think that they are smarter and have better vision than most people, and they have good luck, just like they have found a big bargain in the Panjiayuan Antique Market and discovered the code to get rich!
If you ask these people who buy blindly with the fantasy of getting rich quickly, why don’t they buy mainstream products, such as BTC, but try their luck? They almost unanimously give the same reason or excuse, that is, BTC is too expensive, there is not much room for growth, and the rate of return is not high, so they must buy a potential variety to realize the dream of getting rich quickly.
Those who answered this way are all brainless and have never seriously thought about this question. Obviously, the reason why they all gave such similar answers is because they are all lazy to think and have all been brainwashed by others and instilled with such a reason, excuse and logic.
The logic of this excuse is actually ridiculous. As a product, the ratio of the return on investment (income) to the possibility of realization (risk) is like the quality of the product. The absurdity of the above logic is like thinking that the quality of a product that costs 9.9 yuan and includes free shipping is better than the quality of a best-selling genuine product.
Some netizens made such a picture. They made a picture of the "product quality" of several typical investment products from 2020 to date, that is, the annualized compound growth rate (CAGR) and annualized volatility. They put each investment product in the coordinate system to observe their position and compare their product quality. As follows:
From the figure, we can intuitively see that bonds are low-volatility, low-growth products, gold's volatility and growth rate are significantly higher than bonds, and stocks (S&P 500 Index S&P, Nasdaq) are high-volatility, high-growth products.
Among them, the S&P index is a bit weaker, with a volatility that is one level higher than that of gold, but only in exchange for almost the same growth rate. Obviously, the risk-return is not matched.
The Nasdaq is a little better, although it has higher volatility - greater risk, but also higher growth rate.
The worst is the Russell Index, which has higher volatility than the Nasdaq and lower returns than gold.
The comparison of these three different US stock indexes clearly reveals a truth, that is, the head effect of US stocks is particularly obvious. The beautiful growth is all driven by a few leading technology stocks, and a large number of long-tail small and medium-sized stocks are garbage.
The big get bigger, and the strong get stronger. This high trend of capital concentration and the strong Matthew effect are reflected in the structural imbalance of the US stock market, which has broken some inherent cognitions - for example, the book "The Innovator's Dilemma" says that small companies can always successfully challenge the internal innovation of large companies in terms of innovation; for example, the Austrian School of Economics says that in a free market, the spontaneous innovation of a large number of small companies is more efficient than the planned innovation of large companies.
Obviously, the US economy is now essentially a highly intervened Keynesian economy. The intervention comes from the "dollar-US debt" system. Everything is dancing around the financial baton, just to impress more spectators. A night of spring is worth a thousand gold. Innovation is just the seductive gauze on the dancer, just to harvest more money from the spectators (leeks).
By allocating 60/40 between stocks and bonds, you can reduce volatility (risk) and get a good rate of return (return). As you can see from the chart, the risk and return of this strategy are slightly lower than gold.
Well, the last supper. BTC is on the table.
If BTC and the S&P index are mixed, it can be seen from the figure that 6% BTC plus 94% S&P 500 can achieve a similar rate of return while bearing a lower volatility risk than the Nasdaq. That is, the formula written in the title of this article: S&P 500 + 6% BTC > Nasdaq.
In addition, as the proportion of BTC in the BTC/S&P combination increases, we will also get higher volatility risk and higher returns.
The best part is that this is almost linear. In other words, BTC allows you to take more risk and enjoy more returns.
In contrast, too many so-called investment products are eager to make you take as much risk as possible, but get as little return as possible, or even lose everything.
It is clear at a glance which is better.
(Official account: Liu Jiaolian. Knowledge Planet: reply “Planet” to the official account)
(Disclaimer: The content of this article does not constitute any investment advice. Cryptocurrency is an extremely high-risk product and there is a risk of it returning to zero at any time. Please participate with caution and be responsible for your own actions.)
