Bitcoin Halving, Copycats Begin to Explore Spring

Original: Liu Jiaolian

The setting clouds and the solitary owl fly together, and the autumn water is the same color as the sky.

Gradually, gradually, the footsteps of spring are approaching. Gradually, gradually, the halving of Bitcoin (BTC) production is approaching. As mentioned yesterday, "In more than 20 days, the fourth-stage rocket will burn out, and the fifth-stage rocket will start, continuing to propel us towards the stars and the sea!"

The halving of BTC production is a major event in the encryption industry. This is the time for the rocket to switch. Once the switch is successful, the new first-stage rocket will push BTC farther and deeper into space.

This is not only a big thing for BTC, but also for altcoins. Before and after the halving, BTC share will reach a local high. Then as the bull market progresses, it will gradually fall. When the bull market is at its craziest, it will reach its lowest level. This means that altcoins are competing to rise one after another, falling into a carnival called "altcoin season"!

When the crowd is competing for beauty, BTC has been left out. As described in the poem:

Beside the broken bridge outside the post office, it is lonely and ownerless.

I have no intention of fighting for spring, and I will let everyone be jealous.

4 months ago, Jiaolian started to use internal reference It reminds us that the 2024 halving and the imminent copycat season are coming. At that time, the internal reference said this:

"It is almost 2024, and it is almost the time of halving. The spring of the cottage. The so-called spring is the season of sowing. If you pick good seeds, When summer comes and mobility spreads, it will suddenly grow into a towering tree. You will reap melons if you sow melons, and you will reap beans if you sow beans. Just like the teaching chain started to plant uni for less than 2 dollars in October 2020. However, Fruits are forced to grow quickly. After they mature quickly, pick the fruits in time. Don’t wait for the fruits to rot in the ground. Risk control is very important. Do not exceed 10% of the position. Try to see if you can outperform. Be prepared to underperform. Be prepared to face the worst Prepare for bad results."

As of February 28 this year, the article "Many crypto professionals are bullish on ETH/BTC, which may promote the outbreak of the altcoin season" quoted netizen Negentropic's view that the rebound of ETH/BTC will promote the exchange rate of the altcoin season, which will It is the Blow-Off Top pattern of Elliott Wave Theory.

Let’s get closer and take a look at the evolution of the copycat season in the past few cycles, and learn from history.

Copycat Season in 2016

The copycats in 2016, after the BTC production was halved, went through a 7-8 month downturn and preparations. It was only in 2017 that they exploded rapidly with the start of the BTC bull market.

But please note that in 2016-2017, the copycat market was almost non-existent. Before the outbreak of the altcoin season in 2017, BTC’s market share was in an absolute dominance of over 95%.

Copycat Season in 2020

Copycats in 2020, after the BTC output was halved, this time they couldn’t wait to accelerate. rush. In the first half of 2021, as BTC reached its first calf top, the total market value of the altcoins also reached a local high. Then during the "519" violent correction in the middle of the year, it also fluctuated violently downward. At the end of 2021, as BTC reached its second calf top, the altcoins also started their second spring.

From this, we can observe:

First of all, the outbreak of the altcoin season is closely dependent on the outbreak rhythm of BTC. BTC is slow at first and then fast, and the altcoin season first declines and then rises, such as 2017. BTC rushes and falls, rushes and falls again, and the altcoin season also rushes and pulls back, rushes and pulls back again.

This is a good confirmation of what Jiaolian has said many times, "Only Bitcoin has the ability to launch a bull market".

The reduction in BTC production is the reason for the bull market (internal cause). The bull market is again responsible for the copycat season.

It can be said that any argument that a certain copycat will create a bull market, whether it is ICO in 2017, DeFi and new public chains in 2021, or 2024-2025 Talking about RWA, DePIN or other things that will create a bull market, all kinds of rhetoric, without exception, are either pure ignorance and pretending to understand, or they are full-blown lies. Referred to as "either stupid or bad".

Secondly, after the halving, whether the altcoins are going down or up, there is only a short window of time to prepare for a correction. Investors who want to find alpha (financial terminology: the excess return relative to the benchmark return beta) in 2024 will not have much time to carefully select and slowly build positions.

Just like JiaoChain in 2020, before the bull market broke out, when Uniswap's currency opened at a high of 8 dollars and fell back to less than 2 dollars, it started building a position. However, because the bull market started too quickly, the cost of adding positions was quickly raised. After traveling through the bull and bear market, we arrive at today, with UNI at $12, the position is only slightly profitable, far from outperforming BTC.

However, Jiaolian’s mentality towards this “looking for alpha” experiment is dull.

In the encryption industry, the beta strategy is to hold BTC without moving, 1 BTC = 1 BTC. The alpha strategy can generate excess returns compared to holding BTC unchanged, which is the part that outperforms BTC.

BTC is the gold standard. Bitcoin is the new gold standard.

Therefore, alpha excess return means that exchanging BTC back can increase the absolute number of BTC in your hands.

Whether it is based on a priori theory or the experimental verification of teaching the chain to travel through bulls and bears in person, it has proved an ironclad truth: if you hold copycats, you must sell them in the bull market and implement the excess alpha returns into real BTC. Spot goods. The best time is when the copycat outperforms BTC by a large margin.

At the very least, part of the alpha’s excess returns must be reduced and exchanged for BTC.

In this sense, holding a copycat is equivalent to a kind of soft leverage. If you use the perspective of leverage to examine an altcoin, you may gain a new understanding and thorough understanding.

Abandon the legal currency-based yield thinking and goals, such as 10 times, 100 times and so on. Switching to the BTC standard, let me ask if your copycat can achieve 5 times the alpha in a bull market?

That is, turning the copycat currently worth 1 BTC into an actual 5 spot BTC.

Can? That would be so cool!

No? Then just hoard BTC honestly.