Original | Liu Jiaolian
BTC has recovered its lost ground over the weekend and has now recovered to around $60,000. The strange drop on Friday, August 16, seems to be consistent with the reasons mentioned in the article "Counterintuitive! What factors affect the price of BTC?" on the same day. Today ["8.18 Jiaolian Internal Reference: US dollar is weak, Bitcoin is strong, and gold is strong and hits a new high"] seems to have confirmed the case. It is likely that the abnormal spike was caused by the US government's sale of 10,000 BTC. From the lowest point of nearly $60,000 to 56k, it just matches the 5% drop mentioned in the previous article and internal reference.
The reason why the decline on Friday was abnormal was that the Chinese and US stock markets were both rising at the time, but only BTC led the crypto market to fall. In the evening [“8.16 Jiaolian Internal Reference: Practicing a way of making money that ordinary people can copy is the right way”], Jiaolian also pointed out directly that “it seems that the decline in the crypto market in the past two days is purely due to unique factors in crypto.”
As of today [“8.18 Teaching Chain Insider: US dollar is weak, Bitcoin is strong, and gold is strong and hitting a new high”], Teaching Chain reported that gold finally broke through the long-awaited $2,500 mark at the close, and continued to hit a new historical high. Capital is rushing in regardless of the high gold price, which highlights the determination to try to hedge against the decline of the US dollar.
Raising interest rates cannot fight inflation. Raising interest rates will only cause greater inflation. This is from the perspective of currency. It is also from the perspective of the long cycle. What is the essence of raising interest rates? It makes money generate more money (interest) out of thin air. To put it bluntly, it is financial idleness. 100 yuan principal, 5% interest, will become 105 in a year. Isn't this just 5 yuan more?
Why does a short-term interest rate hike create the illusion of anti-inflation? Because of leverage. Assume that there is a 10-fold leverage at a normal level. 100 yuan of currency is released and becomes 1,000 yuan in the market. After the interest rate hike, some leverage is broken, forcing the leverage ratio to drop to 5 times. The bubble of 1,000 yuan bursts and becomes 500 yuan.
However, when the interest rate hike cycle ends, the leverage ratio returns to 10 times. 500 yuan becomes 525 yuan after interest. The leverage becomes 1050 yuan. This amount is 50 yuan more than the 1000 yuan a cycle ago. This is inflation.
This process of financial idleness is a process of wealth redistribution. The 500 yuan reduction during the interest rate hike period eliminated the 500 yuan in the pockets of this group of people. However, the 550 yuan increase during the interest rate cut period was given to another group of people.
If you are one of the first group, you are the leeks harvested by the dollar cycle. If you are one of the second group, you are the winner who harvests leeks with the help of the dollar cycle.
Yesterday's teaching chain article "Wait Quietly, Miracles Will Come" told a story about the bet between the stock god Buffett and the best fund managers on Wall Street.
Essentially, Buffett's ridicule of fund managers for not being able to beat the market (S&P 500) over a 10-year period means that they simply cannot generate sustained alpha (excess returns) by fighting hard and taking the initiative in the secondary market.
Buffett won. You realized that active actions are often useless, and it is better to just buy indexes. This is just the first level.
Have you ever thought that Buffett himself is the most dazzling alpha in the U.S. stock market? His Berkshire Hathaway has consistently outperformed the market for decades?
So, the second level of understanding is Buffett’s ridicule, and another level of understanding is that fund managers have not simply understood how to truly outperform the market.
This method is to break out of the low-dimensional fighting in the market, stand above the cycle, and become the second group of people.
In other words, Buffett's alpha does not come from within the market, but from outside the market.
So for ordinary people, how can they stand above the cycle and outside the market?
Overcoming market efficiency. Overcoming cognitive biases.
Gold broke through $2,500, setting a new all-time high. Everyone is extremely bullish on gold.
Since BTC hit an all-time high of 73.8k in March, it has been fluctuating downward for half a year and is struggling at the 60,000 dollar level. Everyone is extremely bearish on BTC. In today's ["8.18 Teaching Chain Insider: The US dollar is weak, Bitcoin is strong, and gold is strong and hitting a new high"], there is also a description of the current market panic.
However, if we look at the period of one year, gold, which is extremely bullish, has risen by 30%, and BTC, which is extremely bearish, has risen by 100%.
A bull market with a 30% increase, a bear market with a 100% increase, why are people's feelings so different and why is the market sentiment so weird?
We can roughly guess that most people in the market are short-term players or novices, and they have no perception of such a long time as a year.
The morning mushroom does not know the new moon and full moon, and the cicada does not know spring and autumn. The great peng soars up to 90,000 miles, while the great cypress considers 8,000 years as spring and 8,000 years as autumn. This is the difference in realm.
Riding on the righteousness of heaven and earth, controlling the debate of the six qi, and traveling infinity. Overcoming prejudice and improving cognition are not enough to beat the market, but they are enough to beat ineffective people.
(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.)
