The $1 billion Ethereum DAT plan led by Li Lin and others has been shelved due to the bear market, with funds being returned. The "trend-following" behind this may reflect considerations of investor sentiment.

Written by: Dao Says Blockchain

Yesterday, several well-known media outlets in the crypto ecosystem reported a piece of news, which I have divided into three sections:

The $1 billion Ethereum DAT plan led by Li Lin, Shen Bo, Xiao Feng, Cai Wensheng, and others has been shelved, and the funds raised have been returned. This plan was the largest DAT led by Asian investors.

Regarding the reasons for the shelving, relevant news reported:

Industry insiders speculate that the main reason for the halt is the bear market following the 1011 incident, with many DAT companies experiencing significant stock price declines recently.

As for the subsequent plans, the news reported:

Regarding whether the plan will be restarted, relevant individuals stated that investor interests will be prioritized, and it is still pending market observation, trend-following.

I have been paying attention to the news about these celebrities preparing this Ethereum DAT company since it first emerged. There are two main reasons:

First, in my impression, some of these individuals are capable of focusing on long-term interests and rejecting short-term behaviors.

Second, some of these individuals have made significant contributions to the early growth of Ethereum.

In my view, having such individuals lead the establishment of this Ethereum-based DAT company is a rational choice, one that is not easily swayed by market sentiment and can make independent judgments.

Moreover, they are investing in Ethereum, which, in my opinion, is undoubtedly the right choice in the long run. From the perspective of asset selection, the risks are quite controllable.

Therefore, this DAT company is worth paying attention to, at least much more rational than some mindless Ethereum DAT companies that shout about Ethereum reaching XXX dollars by the end of this year or next year.

The only point I was skeptical about at that time was:

Given that Ethereum had already risen to over $4,000, was it the right timing to enter the market? Could a more suitable entry point be found?

Of course, if viewed from a longer-term perspective, entering at $4,000 is also acceptable, but the entire team might have to bear the pressure from the market in the short term.

Now, as time has passed, the market has been flooded with news of plummeting prices in recent days ------------- I have been waiting for this day for several months.

I check daily to see if Ethereum has dropped below $2,500 and whether the S&P 500 index has been hit hard.

Then I came across the news I divided into three sections above.

I divided the news into three sections because each section is worth thinking about and exploring.

Let’s first look at the second section, which summarizes that the reason for shelving the plan is the bear market.

According to common sense, if you are optimistic about an asset in the long term and believe in its future potential, shouldn’t you enter the market during a bear market, being greedy when others are fearful?

I can’t comment on whether entering at the current price of $3,000 is a good idea, but it is certainly better than entering at $4,000 a while ago, right?

Why is it that now, with the price having dropped, they are hesitant to enter?

Is it because the fundamentals of Ethereum have changed?

I haven’t seen any news proving that the fundamentals of Ethereum have changed.

I also thought of another explanation: the team believes that the current price level is still not good.

But if that’s the case, they could simply wait a bit longer for a lower price; there’s no need to return funds to investors now. In fact, they should be increasing their efforts to raise funds and tell investors: the price is low now, making it a better time to enter, and we need more money to seize this opportunity.

So this explanation also seems to not hold water.

The third section seems to explain the deeper reason for shelving the plan, summarizing that it is pending observation and they want to follow the trend.

What does this trend-following mean?

What comes to mind is the "trading mindset" of the vast majority:

The market is currently rising, so I (regardless of the method) judge that the market will continue to rise in the future, meaning I have the ability to predict that the market will keep rising for a while. It’s at this point that I buy.

Conversely, if the market is falling, I judge that the market will continue to fall, so I can’t buy.

In fact, if we follow this "trading mindset," there are countless meme coins in the market that can be used for this kind of play; there’s really no need to target Ethereum ---------- because if you have the ability to predict the market’s next moves, why not find a more volatile asset?

There’s another phrase in the third section that is worth pondering: "Relevant individuals stated that investor interests will be prioritized."

"Prioritizing investor interests"?

Isn’t the best way to prioritize investor interests to buy a long-term potential asset at a lower price?

Shouldn’t we buy when the market is rising to prioritize investors' interests?

I suspect that what this statement really wants to express is not "prioritizing investor interests," but rather "prioritizing investor sentiment."

Why?

Because the vast majority of investors often care more about sentiment and short-term market feedback. If you buy something and it doesn’t rise for three days, they get anxious. If you tell them what will happen in a few years or even a year, they don’t have the patience to listen. They want to know why it hasn’t risen in the past three days. If you can’t comfort them at that moment, it becomes a problem.

Currently, the crypto ecosystem is facing such an environment.

In a less-than-ideal market environment, if one were to enter now, what if Ethereum’s price drops even lower? What will happen to investor sentiment?

So it’s better to shelve the plan to avoid the short-term risk of potential losses for investors. As for the long-term potential and future prospects that were once envisioned, it’s simply impossible to explain to investors at this time, and even if explained, it may not be useful.

The situation of investors is a problem that many fund managers face.

In the past few days, I saw an interview with Lin Yuan discussing this issue.

In the interview, the reporter asked him: What do you do if your investors have opinions about your investments?

He answered quite straightforwardly: Why care about them? The agreement is already written.

The reporter asked again: How do you explain it to them?

He answered just as straightforwardly: No explanation.

Regarding Lin Yuan, I appreciate many of his views, but I also find some of his opinions to be half sea water and half flame.

However, after watching this interview, I genuinely believe he is a very interesting person.

Warren Buffett and Charlie Munger have also shared very strong views on how to treat investors.

A questioner asked why they don’t split Berkshire Hathaway’s stock to lower the price per share to allow more investors to participate.

The two gentlemen answered just as straightforwardly (the gist being): We don’t want many investors to buy our stock; we want to maintain this threshold. Investors who do not agree with our approach should sell our stock and look for other investors.

Later, because too many groups on Wall Street misused the names of the two gentlemen to issue a bunch of "copycat" stocks, the two gentlemen were forced to issue some B shares. However, since then, there has been no similar stock split behavior.

Whether it’s Lin Yuan or Buffett and Munger, the message they convey seems very similar to me: fund managers cannot be disturbed by the emotions of investors. Moreover, the best practice is to initially filter investors with strict standards. Those whose philosophies and values differ should not have their money accepted; such people do not need to be together, and they are even less likely to row together to reach the shore of victory.

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