The formula for launching a violent bull market: capital + narrative

People who say that a bull market will come either rely on their feelings, or are assassins of the cyclical biological clock, or are optimists with FOMO after seeing BlackRock submit an ETF application, or they can give you a summary of a bunch of technical reasons. Not structured and not a sufficient condition.

We need to find the sufficient conditions for a bull market to break out, or even that they are necessary, and that is money and narrative.

The essence of the bull market is a bubble blown by leverage. In countless financial bubble carnivals in human history, this formula has been continuously proven: bull market = capital + narrative

The tulip bubble was the result of the Dutch global voyage, which plundered huge amounts of wealth and gave birth to a large-scale middle class. When their capital investment was excessive, they encountered a narrative that the Dutch upper class would pay for their favorite things without any limit.

The British South Sea Bubble was caused by the Industrial Revolution, which amassed huge wealth. The subsequent development of the London financial market further stimulated the investment greed of the majority of British people, and encountered the narrative of exchanging stocks for national debt with state endorsement.

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The Japanese real estate bubble is a narrative in which Japan’s prosperous manufacturing industry after the war benefited the entire country, and it encountered the rise of the nation and strived to be the best in the world. This is something to be wary of!

The Internet bubble was the result of the overall economic improvement in the United States in the 1990s, and it encountered an Internet narrative that could subvert the world.

The bull market of virtual assets in 2016 was caused by major illegal projects at home and abroad plundering massive amounts of private wealth and turning to anonymous virtual assets to avoid legal sanctions. At the same time, after the RMB depreciated sharply against the US dollar, it encountered the Bitcoin halving, Ethereum The IC0 narrative.

The Web3 bull market in 2020 is that after the outbreak of masks, the U.S. government released massive amounts of water and even directly sent money to citizens, giving Americans extra income to spend or invest in whatever they want, and further stimulated the scale of online brokers expansion (such as Robinhood), and at the same time encountered the Bitcoin halving, the DeFi Summer on the Ethereum ecosystem, and the subsequent continued algorithmic stablecoins, GameFi, NFT and other track narratives, as well as the entry of Musk and micro-strategy , El Salvador admission and more.

Human history, that's it.

You said wait a minute, there is something wrong with this logic. It can only prove that the coming of a bull market in human history requires these two conditions. It can only prove that funds and narrative are necessary conditions, but cannot prove that they are sufficient conditions.

For example, as a counter-example, China A-shares. After joining the WTO in 2001, China's economic miracle was born. Residents' incomes remained the same every year, and the middle class was truly born. In addition, various macro narratives were added, such as the great rejuvenation of the nation, the world's factory, the Belt and Road Initiative, etc. But what about A-shares? It has been green for 10 years and is constant at more than 3,000 points like stablecoins.

You see, now that we have funds and a narrative, the bull market has not come yet? Or was 2008 or 2015 a bull market or a stock market crash?

The situation is like this. China’s bull market is not in A-shares. The real bubble reservoir is in real estate. This is the real Changhong bull market in China in the past 20 years.

Of course, when the bull market reaches its peak, after the five-wave push, according to textbooks, it should enter the ABC three-wave decline. At what stage are we now? According to the latest policy information to save real estate, it should enter a B-wave rebound, so friends who are doing capital planning must complete the layout in advance, otherwise the next step will be a deeper C-wave!

To sum up, when capital meets narrative, the golden wind and jade dew meet, creating a bull market in the world.

Of course, the narrative here must be solid and the funds must be sufficient. It must not be Jia Yueting building a car. A PPT and a group of Sun Hongbin can fly with the left foot and the right foot. This is the meaning of the recent BRC20.