The impact of traditional capital entering the crypto ecosystem
The great change has begun, and perhaps the mindset we should uphold at this moment is to prepare for the worst and observe the changes.There are readers who left messages asking: After the Bitcoin and Ethereum ETFs, is it possible that the cycle will be broken?
If both the Bitcoin and Ethereum ETFs are approved, I believe their biggest role will be to bring in real massive funds, "traditional capital," into the crypto world.
Recently, Wall Street's well-known fund manager Bill Ackman made new comments on Bitcoin, changing his previous negative stance and publicly stating that he is considering buying Bitcoin.
I briefly read his remarks. Frankly speaking, I don't see that he truly understands the essence of Bitcoin and the significance of blockchain technology from his comments. What I read more is that he sees the enticing benefits brought by Bitcoin and doesn't want to miss out on the upcoming capital feast.
In fact, he is not the first traditional Wall Street investor to change his attitude towards Bitcoin; similar traditional investors entered the market during the last bull market. However, after the approval of the Bitcoin ETF this time, I believe there will be more people like him entering the market in this cycle.
Their entry will continue to bring traditional capital into the crypto ecosystem.
In terms of scale, compared to them, we current and past players in the crypto ecosystem have almost no significant influence.
An obvious fact is that: as this round of market has progressed, Bitcoin's price has exceeded its historical peak and stabilized without having undergone a halving. This was unimaginable when traditional capital had not entered the market on a large scale, but now it has happened. This is the power and influence of traditional capital.
This means that the pricing power for Bitcoin and Ethereum will gradually shift to these traditional capitals, and the ways and strategies they use to operate traditional investment markets will eventually be applied to Bitcoin and Ethereum.
Under these circumstances, I believe that the price trends of Bitcoin and Ethereum will still have cycles, but those cycles are likely to be different from what we have seen in the past.
Firstly, the influx of traditional capital will inevitably lead to a significant increase in the price of Bitcoin and Ethereum. Once the price has risen to a new level, it will be difficult for Bitcoin and Ethereum to replicate the volatility of up to 10 times or even higher that we saw in past bull and bear cycles.
Secondly, the narrative around Bitcoin and Ethereum is likely to be different as well; at least the thinking and operational methods of traditional capital will influence Bitcoin and Ethereum. However, how this influence will manifest itself may require further observation over time.
In summary, the future trends and patterns of Bitcoin and Ethereum will undergo significant changes.
Now that the Bitcoin ETF has already been approved, just based on this point, the upcoming bull market will be a turning point in the history of Bitcoin's development. How traditional capital will influence Bitcoin's trends and how it will change the narrative of Bitcoin will gradually be reflected in the upcoming bull market.
Therefore, in the next bull market, it is essential for each investor to carefully observe: in addition to monitoring the price trends closely related to our interests, another aspect worth observing from a long-term perspective is what kind of influence traditional capital will exert on Bitcoin's future trends— we may even need to incorporate this influence into our profit-taking strategies in the later stages of the bull market.
Whether in the comments at the end of recent articles or in discussions last Saturday, there have been readers/audiences asking how to take profits in the upcoming bull market.
For this question, I haven't provided a very clear opinion; firstly, it is still too early to give specific methods, and secondly, I want to observe how the entry of traditional capital will affect Bitcoin and see if adjustments and changes to past profit-taking methods are necessary based on the new situation.
A major change has already begun; being prepared and observing the changes may be the mindset we should adopt at this moment.
