If you want to bet on the ups and downs based on Cancun's promotion, you will lose

It's not that the Cancun upgrade isn't important. But the "good" he showed is a long-term impact.

Written by: Ah Kong

Now many people are talking about Cancun's upgrade, but in the end they will always talk about the topic of market prediction.

I can understand this. Apart from investors, what I write now is also for readers. Naturally, I hope to have more readers and more reading volume.

Therefore, in order to cater to the tastes of the market, we start with the hotspots and end with market forecasts, which can satisfy most readers’ demands (most people don’t care about every upgrade, but they are very concerned about whether the market will rise or not after the upgrade. fall).

Therefore, the headline format with the most flood and the best traffic is probably "Cancun's upgrade is coming soon, which will benefit the following directions", "What are the substantial benefits brought by Cancun's upgrade?", or "After Cancun's upgrade Upcoming X potential opportunities".

Don't laugh, it's true. But the real thing, you can look at each upgrade against the time and you will find that there are indeed some fluctuations before and after each upgrade, with ups and downs, and the fluctuation range is not as large as you think.

• London will be upgraded on August 5, 2021, the price of ETH is 2621 US dollars, and there will be a 20% increase on 8.30;
• On September 15, 2022, when Paris was upgraded, the price of Ethereum was 1,472 US dollars. It fell by more than 20% on that day, and fell by more than 32% two months later.
• On April 12, 2023, when Shanghai was upgraded, the price of Ethereum was 1915 US dollars, which skyrocketed by 10% on the same day, and fell by more than 10% two days later.

Is the upgrade of Paris important? It is very important that Ethereum completed a key upgrade from pow to pos, but the currency price performance was terrible; the London upgrade modified the gas fee rules, and then continued to rise slightly, and then there was a 20% increase; the Shanghai upgrade completed the LSD pledge. Withdrawal function, once up and down, the currency price stays the same.

Of course, many people "predicted wrong" and started to withdraw the confession, or find reasons, for example, the pow to pos market divergence was too great at that time, and it was indeed a high probability of rising, but there was always a probability of falling. The market fell....

Let’s not say these words are not very nutritious. It simply means that we use each upgrade to predict how meaningful the next market will be-------In fact, it doesn’t make much sense.

You see, the increase after each upgrade is 10~30%. But if you can open a position in Ethereum in December last year, you will have a profit ranging from 80% to 100% until now.

Some people will say that you can leverage the contract. Then let's calculate again how big the risk is.

Take the Shanghai upgrade as an example. The maximum increase after the upgrade in Shanghai is 10%. If the leverage is 10 times, the return will be 100%, and the leverage of 100 times will be 10 times the return. Then:

If you are at $1915, take out 1000U to open a 100-fold contract, and the position will be liquidated at 1896, and the market will not be able to bear the fluctuation of 0.9 points. The income is 10000U.

If you want to earn more points and ensure safety, you need to increase the margin rate and control the ratio at the same time.

If you want to upgrade to earn 1 million in Shanghai, open 10 times the leverage, open the position at 1915U, and close the position at 2141U, to earn 1 million, you need to open 5000 Ethereum, the initial margin is 950,000, and the liquidation price is 1715. Yield is 118%

Similarly, if you open a position in December and earn 1 million, you need to open a position of 1 million, and there is no risk of liquidation.

do you understand? You need to judge the authenticity of the news, the margin rate, the liquidation price, and the leverage ratio. At the risk of losing a penny if the currency price fluctuates by 10%, you can make a profit of 1 million with 1 million.

This is an operation that gets twice the result with half the effort.

Therefore, if you want to rely on the Cancun upgrade to guess the short-term ups and downs of the industry, you will lose.

Of course, that's not to say the Cancun upgrade isn't important. But the "good" he showed is a long-term impact. It is even more impossible to use the Cancun upgrade in isolation as a prediction of the so-called ups and downs, potential investment opportunities, or other weird things.

However, the Cancun upgrade is related to the development progress of Ethereum, and the actual utility brought by the upgrade will have a very large impact on the entire industry. Therefore, we can only look at the upgrade of Cancun from a higher perspective, in order to draw a conclusion that is really helpful for investment.