Yesterday (December 16), the price of Bitcoin broke through $107,000, setting a new all-time high. As of the time of writing, the price of Bitcoin is around $106,000, as shown in the image below.
Some analysts believe that the latest surge in Bitcoin's price is largely due to Trump reaffirming his plan to establish a U.S. Bitcoin strategic reserve. According to reports, when asked in a CNBC interview whether he plans to establish a cryptocurrency reserve similar to the oil reserve, Trump replied: "Yes, I think so."
The market often reacts this way, with potential positive news and various analyses based on it emerging when prices are rising. For example, some analysts attribute Bitcoin's breakthrough to the expected interest rate cut by the Federal Reserve in December.
In the long run, these are all positive for Bitcoin. After more than a decade of development, Bitcoin has evolved from being seen by most people as a "scam" to becoming an asset that is increasingly being allocated by major institutions, and may even become a strategic reserve asset for more and more countries in the not-too-distant future.
In terms of price performance, it is not an exaggeration to say that Bitcoin is the asset with the highest growth in the past 12 years, with an increase of over 10,000 times from around $10 in 2012 to the current $106,000.
According to a data report released by 10xresearch this month (December), the supply of Bitcoin is dwindling. As shown in the image below, the Bitcoin balances on exchanges are rapidly decreasing, and on-chain data further shows that long-term holders are holding their ground and not releasing supply to the market. Currently, only Binance, Coinbase and Bitfinex have sufficient Bitcoin reserves, but considering the purchasing power of Bitcoin ETF inflows, Bitfinex's reserves can last about a year, while Binance's and Coinbase's reserves can continue to last 2-3 years.
If Bitcoin is adopted as a national reserve by the U.S. in the future, it is also possible that more countries will follow suit, further increasing the adoption rate of cryptocurrencies. When more grandparents and grandmothers know about Bitcoin, the influx of new liquidity could be huge.
Of course, the above discussion is more from a long-term perspective. Most people are more concerned about the short-term peak price of Bitcoin.
In summary, the main risks facing Bitcoin prices in the near future are upside risk and liquidity risk. Based on these two aspects, we can make some assumptions or guesses.
For example, according to the comparison of the Global Macro Investor's Total Liquidity Index and Bitcoin RHS data shown in the image, Bitcoin seems to have entered the "parabolic phase" of the market cycle, and is expected to reach a stage peak of around $110,000 in January 2025, and then fall below $87,000 in February 2025.
However, with the support of a 20 trillion U.S. dollar increase in M2 money supply in 2025, if 5% of the liquidity (1 trillion U.S. dollars) is attracted to the crypto market (including crypto ETFs), Bitcoin's price may reach a new stage peak before the low in 2025 (in the third or fourth quarter).
Of course, the above are just predictions by certain analysts, and do not represent my personal views. Please do your own research and do not treat the specific numerical conclusions (guesses) above as investment advice.
The key points are: your trading should be based on your position management, which includes aspects like capital allocation, portfolio, goal setting, execution cycle, execution strategy, and risk management. If you haven't planned your position well and customized an execution plan, any blind buying or listening to others (such as those who show off their trades or claim to make constant profits) could lead to losses.
The article discusses various scenarios related to Bitcoin's price movements and how one should approach them in terms of position sizing, profit-taking, and risk management. It emphasizes the importance of having a well-thought-out trading strategy and sticking to it, rather than being swayed by emotions or external influences.
The article also cautions against excessive leverage and blindly following others' investment advice, as these can lead to significant losses and even mental distress. It encourages readers to focus on fundamentals, such as capital preservation, diversification, and developing a personalized trading approach.
In summary, the key message is that successful trading requires proper position management, discipline, and a well-planned strategy, rather than relying on speculation or external influences.
Here is the English translation:First, collecting other people's funds to participate in financial activities without any compliant procedures already constitutes illegal fund-raising. The Regulations on Preventing and Disposing of Illegal Fund-Raising of the People's Republic of China clearly stipulate that the act of absorbing funds from unspecified objects by promising to repay the principal and interest or provide other investment returns without the permission of the financial management department of the State Council is illegal fund-raising. Involving a large amount, it shall be punished with fixed-term imprisonment of not less than three years but not more than seven years, and a fine. Secondly, taking such a risk of three to seven years' imprisonment is a losing proposition for me, as I am currently physically in China. Thirdly, even if I make money, I may also lose money. If I lose all your money, and you choose to jump into the river, the matter will become even more serious. I can consider collecting a group fee of $55 from others, as this can be considered a form of knowledge payment, and can also provide some better exchange opportunities for those in need. But I will definitely not engage in illegal fund-raising activities of tens of thousands of dollars to participate in financial trading activities.
In general, for most people, there are some things that can be done, and some things that are better not to do, as not all money can be earned. Trading itself is sometimes a relatively complex matter, and problems may be encountered during the process, and the goal cannot be achieved in a day. Discovering problems, thinking about problems, understanding problems, and solving problems will be an ongoing process. The market is changing in real-time 24x7, and we cannot always try to beat the market. It might be better to expand the spatial and temporal dimensions to look at the problem.
