The future of financial services will never stop, and the bull market will continue 2021-05-28

I will continue to share with you an article about overseas investors today. Below is my translation and understanding of the second half of the article.

You can't stand a 60% dip, you're not eligible for a 6000% surge.

Faced with the market slump, where does our inner pain and anxiety come from?I think it is only when we understand the source of our inner pain that we can better face and deal with this emotion.

Pain comes from the fact that the market slumps often exceed the limit we can bear, forcing us to cut the flesh.

Example: We have invested too much money in this area, and the loss of that money is beyond our means.

For another example: we used too much leverage.

For example: In addition to digital currency investments, most of our investments in other fields are very illiquid, so that when we need money,Had to reluctantly sell digital currency.

So when the market plunges suddenly, we are forced to cut the flesh.

Have we used the money that should have been used to pay rent in June to buy coins?June 1st is coming soon. If we lose 40% of the rent that we should have paid, in order to pay the rent, we not only have to sell the coins in our hands, but also have to raise extra money to make up the gap in the rent.

Did we use leverage?When the market reaches the limit of leveraged liquidation, in order to keep our position, we must sell part of the position or continue to add margin.

In a situation like this, when the market slumps, we suffer.

The price of digital currency fluctuates so violently because the scale of this market is too small compared to the traditional investment market to support large-scale transactions.So when mass liquidations occur, there is a run on the market, people flee in a panic, stomping on each other, and the market collapses at an accelerated rate...

DeFi crushes the market, CEX cannot cope with the market

We also saw some positives in this slump.

Someone on Twitter asked the question: Is no one talking about how Ethereum's DeFi is doing in this slump?

There is no doubt that in the slump, DeFi also crushed the market and hit the market.The last time (March 12, 2020) we saw such a slump was when the new crown epidemic was rampant.But at that time, many DeFi projects with star halo did not stand the test of the market.And this time, DeFi (in terms of total lock-up volume) is 80 times larger than last time, but what we see is an orderly look: every DeFi project is operating in an orderly manner, everything is like the designerAs envisioned, each action is written as a smart contract.

These items took the brunt of a 40% slump in 24 hours, and it's amazing how strong they are today.From here, I see a brighter and greater future.

The calm and composure displayed by these DeFi projects far exceeds the panic and anxiety displayed by the investors who invested in them.At the same time, DeFi competitors—those traditional centralized exchanges—have collapsed.Countless exchange users rushed into the exchange for various transactions in a very short period of time, which caused the exchange's servers to be overwhelmed and malfunctioning.Coinbase, Binance America, Gemini, Kraken, Bitstamp… all of them.

This is the power of the world computer (note: this is Ethereum) and the never-ending network it carries!

The future of financial services will never stop!

The market will retire those outdated old patterns, no matter how powerful they were!

We look forward to the second half of the bull market with hope and confidence!