Author: Rocky Source: X, @Rocky_Bitcoin
In the past two days, Coinbase has continuously recommended cbBTC, which has become a hot topic among many investors. In this regard, I have the following opinions:
1. The core problem of the encryption market: insufficient incremental funds
The core problem of the current encryption market is the insufficient incremental funds, the serious diversion of stock games, and the poor liquidity of the global financial market. Especially after the interest rate hike in Japan, the liquidity problem has become more prominent. Now, everyone generally points the finger at VC coins and projects with high FDV and low circulation. In the final analysis, it is because there is less "live money" in the market.
From a historical perspective, the first two bull markets (2015-2017 and 2019-2021) benefited from specific economic backgrounds. In 2015-2017, China's monetization of shantytown renovation triggered an asset shortage, and projects such as P2P, film and television investment, stamps and coins, and ICO came into being. In 2019-2021, the global epidemic triggered a massive flood of money and helicopter money, causing asset prices such as US stocks, commodities, and cryptocurrencies to soar.
Although this round of bull market is supported by China's 3 trillion special government bonds and 85% of sovereign countries in the world gradually reducing interest rates, these measures are like drinking poison to quench thirst, and still do not bring enough fresh water, and some funds are diverted to short-term US bonds and US stocks.
2. Anxiety of institutional funds: more anxious than us
At present, institutional investors are more anxious than us. When incremental funds cannot quickly fill the market, everyone is thinking about the existing funds. The largest stock in the current market is the deposited funds of BTC, which is worth up to 1.14 trillion US dollars (based on today's market price). Although there are many decentralized BTC ecosystems now, these ecosystems have been unable to show scale effects, and the core problem is still trust.
With Coinbase as a brand endorsement, encapsulating BTC on the BASE chain can actually quickly enhance the sense of trust. Imagine that if you hold 10 million US dollars of BTC, it is basically unprofitable at present; if you are given an annualized rate of return of 3%-5%, generating a lossless return of 300,000 to 500,000 US dollars in currency standard each year, and Coinbase provides custody and guarantee services, this will undoubtedly attract a large amount of funds to enter. As long as 10%-20% of the funds are released, the scale will reach more than 100 billion, which is bound to bring vitality to the market.
Currently, Coinbase holds 859,000 BTC, worth about 50 billion US dollars. With the increase of custodial funds, this number is still increasing. The establishment of trust often depends on the acquiescence and recognition of institutional investors.
3. The future of Web3: It cannot be reduced to a pure investment attribute
#Web3 should not be a pure investment and speculation tool. The total market value of the current crypto market is only 2.14 trillion US dollars, which is only higher than the stock market value of Amazon, but lower than the market value of Nvidia. Frankly speaking, cryptocurrency may just be an investment product in the US securities market.
As an idealist, I think #Web3 is the greatest paradigm revolution after #Web2. AI is the spear of new productivity, and #Web3 is the shield of new production relations. Only by combining the two can we gain advantages in the future economic structure. Just as in the #Web2 era, the digital world and traditional life have been deeply reconstructed, #Web3 will also be deeply related to our lives like #Web2.
However, the current #Web3 has caused many VCs and idealists to worry. The current #Web3 is more of a speculative information exchange, lacking the voice of change, the spirit of innovation and the attitude of long-term cultivation. Today, institutional investors' interest in #Web3 investment has weakened, and the enthusiasm for fundraising has declined, which shows the problem.
The phenomenon of bad money driving out good money is becoming a concern for all colleagues. Just like @pumpdotfun released tens of thousands of MEME coins in 3 hours during Musk and Trump's Space a few days ago, this short-term and fast trend of thought is very scary.
4. Looking to the future: Activate existing funds and reshape Web3
Finally, I look forward to activating existing funds through centralized exchanges, whether it is #cbBTC, #cbGOLD that may appear in the future, or other new #RWA derivative innovations. The activation of funds is currently the biggest contradiction in #Web3. By grasping this main contradiction, other problems will be solved.
At the same time, I actively call on institutional investors with an idealistic spirit to firmly grasp #Web3 as an indispensable industrial paradigm revolution in human life in the new AI era. In the future, we will eventually see the rise of great companies and projects similar to the #Web2 era, such as Tencent, Google, Amazon, etc. in the #Web3 field, which are closely connected with human daily life and inseparable. At that moment, we will feel gratified and proud of our current belief and persistence!
