The significant differences between this bull market and the previous one:
First, there are more high-quality projects.
Many projects now have the potential for long-term scrutiny. They have either solved some important problems, made significant innovations, or have the technical architecture to accommodate large traffic. Some typical examples include scaling solutions like ARB OP, high-speed solutions like SEI, APT, SOL, and projects like WLD that follow the scaling route, all of which have significant potential once they mature.
However, most of these projects are backed by mature VC investments, and both the project teams and VCs have strong resources, leading to the second major difference.
Second, there are more high FDV (Fully Diluted Valuation) projects.
These projects are very promising, but their circulating market value is also very high. For example, WLD is an absolutely good project. Setting aside narratives and founders, the idea of creating a unique identity for 1 billion people is significant. Once achieved, it could become the underlying infrastructure for AI— as AI becomes stronger, how to identify real people and AI, and how to verify identity, it has the potential to become the underlying infrastructure for various AI projects and internet companies.
However, interestingly, while the project has not yet succeeded, its FDV reached as high as 80 billion during the peak, close to the market value of OPENAI. This is clearly unreasonable. However, with high control and very low unlocking, the project team and market makers determine how much it can rise after unlocking.
Moreover, this is not unique to this project alone; almost all major projects operate in a similar manner.
In the chart, you can see numerous large unlocks. Most projects have already calculated the timing for unlocking during the bull market, and everyone is waiting to sell.
From this perspective, perhaps the next bear market might be a better opportunity for value investing. I don't believe in eternal bull markets, even if ETFs are approved.
So, perhaps high FDV is not necessarily a bad thing, as it gives people who understand the project a better opportunity to get involved.
From the two aspects mentioned above, I propose a viewpoint: in this bull market, we should try to differentiate between "good projects" and "good investment targets."
A good project refers to one that is not empty or garbage, and is an important part of the blockchain. However, if you are not an investor, project team member, or user, and only want to speculate, then you need to think carefully about whether you are the one taking the risk.
A good investment target specifically refers to something that can make money— if it cannot make money, from a speculative perspective, it is not a good investment target.
In the previous bull market, people mostly looked for good investment targets, which were mostly good projects. However, due to changes in the game this time, we must differentiate between the two.
From the perspective of making money, I have a framework for finding good investment targets:
Liquidity comes first. For example, if you can easily buy 10 million RMB without much slippage, and then make 10 times the profit, turning it into 100 million RMB, and then easily sell it without much slippage, this is crucial. The reason for putting this point first is mainly based on several considerations:
First, the most important thing in the system of increasing positions is to reduce the frequency of selling and increase the selling intensity. Not increasing positions is equivalent to zero, wasting time is wasting opportunities, wasting opportunities is wasting the bull market, and to be able to take large positions, good liquidity is essential.
Second, liquidity comes and goes quickly. Only when the tide goes out do you know who's been swimming naked. We have seen too many projects that were hot today and forgotten tomorrow— it has even become the norm.
Without liquidity, it's a dead end in a downturn. Those countless people trapped in the Bitcoin ecosystem should deeply understand this— even unlike MEME, which can still recover some scraps after a brutal drop, once NFTs and inscriptions go to zero, they will be completely ignored.
Follow Binance closely. Binance has the best liquidity in the industry. Pay attention to its new listings and trading pairs. Most coins that are hyped up should meet this standard— if it cannot be listed on Binance, it's as good as zero.
Many coins are hyped up by various people, but if they cannot be listed on Binance, be careful, as you might end up being the last one to buy in. Don't listen to people criticizing Binance— in a bull market, Binance is the king. It's a pity, and I'm ashamed of my short-sightedness in the bull market. Even in my "Intelligent Investor," I originally recommended a combination of BTC, ETH, and BNB, but later removed BNB.
The logic behind this was that the logic of Binance listing during the bear market was considered to be normal, neglecting Binance's resources, choice space, and bargaining power over projects— Binance has become the object that all project teams have to bow down to.
Maintain awe. When you feel that making money is super easy, you must try to reduce your position and sell a little. BOME went from a market value of 30 million to 1 billion in 3 days. When it rose by tens of times, I really felt that it wouldn't be surprising if it rose another 5 times, surpassing WIF and the like. However, I still reduced my position at the most FOMO moment. It was actually quite difficult to reduce the position, especially when it continued to rise after the reduction, or when it fell sharply and rebounded even more. But in hindsight, it was not bad.
So, investing really needs to be counterintuitive.
For example, today's big drop— a friend of mine said he wanted to liquidate his position, which surprised me. If it has dropped this much, when will he buy?
I posted the following tweet the day before yesterday, and a big drop occurred shortly after.
At around 8 o'clock that day, I told a good friend of mine to liquidate all his coins except ENA and switch to U to participate in Binance's new listings.
However, after the market really plummeted, I suddenly felt that participating in new listings was not as attractive, because there are so many good projects everywhere. At this time, it's better to bottom fish some high-quality coins.
In short, don't do the same thing as everyone else.
Buy when everyone is very desperate!
Buy when everyone is very afraid!
The chart below is the nth reminder of the bull market in November last year when Bitcoin was just over 30,000. The market was quite desperate at that time.
Sell and reduce your position when everyone is very FOMO, and switch to some U to earn interest and arbitrage.
Today, as I write this article, the main point is that if you don't study and dare not take action when it drops, you will wait until it rises again to ask, "Can I still buy in?"
Many principles are simple to say, but executing them is counterintuitive.
From zero to a billion, there are quite a few in the coin circle— although most are very secretive, to reach tens of billions or hundreds of billions, you need to pay more attention to the underlying logic.
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