Later yesterday, the regulator issued another announcement asking financial payment institutions not to carry out business related to virtual currencies, and in conjunction with this, the Shanghai Securities News issued an article suggesting that if virtual currencies are to be completely blocked, the authorities need to upgrade their technology at a deeper level.
Many investors see this news as a big negative for the market, but I think in the short term these news may indeed affect some investors, but in terms of the overall market, it plays a small role, and we can even say that we don’t need to care too much.
So far, all the negative news we have seen from domestic regulators in the current bull market is small compared to the 94 policy in 2017. Once that policy was introduced back then, it was the bottom of the barrel for domestic digital currency trading and pretty much shattered the confidence of the vast majority of investors, with only a very small percentage of investors sticking around and enjoying the even crazier wave of gains that followed.
Why? I think an important reason is that in addition to domestic digital currency trading, the overseas market has also been booming, so after the domestic capital entrance was cut off, overseas trading quickly made up for it, so the overall look of even that big “negative” on the subsequent market impact is not much.
After 94, the overseas market has become the mainstream, the domestic share compared to overseas can be almost negligible, so this time the regulatory policy on the overall impact of the transaction is even smaller.
Moreover, the two core drivers of the current bull market are the dollar overdraft and currency release, and the entry of overseas institutions, none of which are related to domestic investors and domestic trading.
And in these two core drivers, the most fundamental is the dollar overdraft. If there was no dollar overshoot, I suspect the timing of the big move in by overseas institutions might not have been so early.
So it’s the dollar overshoot that we have to keep a close eye on.
If there is any policy that can completely reverse the direction of this bull market, I think it must be a policy related to reversing the dollar over-issuance. But any policy that can reverse the dollar overdraft (such as the Fed’s tapering, rate hikes, etc.) will be the policy that changes the direction of the bull market, while policies that have little to do with this will at best only affect market sentiment in the short term, but not change the trend in the long term.
So that’s why on the policy side, my focus is on the policies of the U.S. government, especially the Federal Reserve and the U.S. Treasury.
Although the introduction of this regulatory policy does not have a very fundamental impact on the general market, I reckon it will have a greater impact on us retail investors, and it may be more difficult to access the funds.
In fact, when we take the first step into this field, our minds should be prepared for the idea that we are entering a no-man’s land, from an old world into a new world, the new world and the old world are two very different ecologies. In the new world adventure, we will harvest unexpected gains, but also will experience the unimaginable ordeal. For the vast majority of people, it must be the first to go through a lot of trials and tribulations, and finally to repair the fruit.
The incomprehension of outsiders, the different eyes of outsiders, various policy from the negative side, etc. are all tests and challenges for us. If you want to make gains in this field, you must be mentally prepared to meet all such challenges. Without such psychological preparation, we can not walk to the other side of the victory, more can not see a bright future.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/policy-shortcomings-have-no-long-term-impact-on-the-market-the-bull-market-will-continue/
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