Insights from the Review of Crypto Assets Other than Bitcoin in Previous Bull Markets

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1 month ago

How to Survive the Bull Market "Trap"

Author: Plain Language Blockchain

As we approach 2025, it is customary to reflect on the past and look forward to the future during this transition period.

Looking back at the past of the crypto industry, we can observe an interesting phenomenon: there is a "Altcoin Season" every four years. During this period, everything in the industry tends to rise, and you might even hear that your alcoholic uncle made a fortune buying some animal-themed meme coins, possibly even while intoxicated.

By 2025, the true Altcoin Season has yet to fully arrive. While no one can predict how wild this Altcoin Season will be, I want to remind everyone that the trends of Altcoin markets can often spiral out of control and may suddenly come to an end. Once a crash occurs, the decline could be more than -99.99%, and it might even lead to a complete collapse.

However, before that happens, everyone is immersed in an atmosphere of prosperity and entertainment. So, let's take a moment to review past Altcoin Seasons and see how they developed, and whether we can draw some valuable lessons from them.

01
2012-2013 Altcoin Season: Early Enthusiastic Investors Market Cap Peaked at $15 Billion

We know that those who blindly follow trends in the market are likely to appear again. This situation occurred in 2013, and the trends became quite interesting.

During the "Altcoin Season" of 2013, Bitcoin was still in its early development stage, with a total market cap of about $1 billion, and a typical whale transaction was around $100,000. At that time, CEX Mt. Gox was still operational, and most investors were those who frequently participated in trading card events for "Magic: The Gathering" (this was also the backdrop for the Mt. Gox incident).

At that time, people proposed ideas to improve Bitcoin's transaction speed, believing that reducing block time could accelerate transactions, which was seen as a significant innovation.

Litecoin: Still exists today, and the entire concept (proposed by Charlie Lee) was to reduce the block time from Bitcoin's 10 minutes to 2.5 minutes.

Litecoin's price rose from about $0.10 to $48, an increase of approximately 47,900%. It experienced another significant rise in 2017, after which Charlie Lee sold all his holdings at the peak, claiming "the Bitcoin network is doing just fine without him" (everyone knows what it means when a founder sells 100% of their holdings).

Namecoin: This is a fork of Bitcoin aimed at creating decentralized network domains (similar to the concept of ENS with ".eth"). Its price once soared to about $13 but quickly fell to a low. From its lowest point to its peak, its price increased by about 30 times. In fact, it still exists today, with a current trading price close to $1.

Peercoin (PPC): One of the earliest Proof-of-Stake tokens (this mechanism is now used to secure ETH), it experienced two major surges. The first was in 2013, and the second was in 2017 during the ETH ICO frenzy. Its price once soared to about $7, with an increase of 60-70 times. Naturally, it did not achieve mainstream adoption and eventually fell to $0.42. (However, the conclusion to draw here is that, aside from pure Ponzi schemes like Bitconnect or LUNA, nothing else in the current market is likely to truly go to zero.)

Frenzy: Bitcoin eventually reached $1,200, and these cryptocurrencies surged due to increased interest in crypto. Any project that posted on BitcoinTalk could quickly rise purely on speculation. The closest thing to this today might be a Memecoin promoted by a celebrity or a Memecoin named after a celebrity.

Mt. Gox Collapse: When Mt. Gox collapsed, the party ended. This collapse was due to a major hacking incident, leading to a significant drop in Bitcoin's price, which fell by about 85-90% (depending on how you view the bottom), while Altcoins experienced declines exceeding 99%.

02
2017 Altcoin Season: ICO Frenzy and the Rise of Ethereum Market Cap Peaked at $800 Billion

Subsequently, many interesting events occurred during the bear market. Ethereum was born as a smart contract platform with the aim of creating programmable money. This was a true innovation, as it not only allowed people to transfer tokens but also to create smart contracts, fundamentally changing the entire game.

Like many things in the cryptocurrency space, Ethereum also came with some common risks. The Ethereum DAO (Decentralized Autonomous Organization) was hacked, resulting in losses exceeding $100 million, ultimately leading to a blockchain fork that created both ETH and ETC chains. To this day, some believe that the fork decision at that time was wrong, but we do not intend to discuss this today; we simply review this part of history.

By around 2016, people realized that new tokens could be issued on the Ethereum blockchain, which gave rise to Initial Coin Offerings (ICOs). In ICOs, project teams directly sold tokens to investors. In 2017, the ICO frenzy officially erupted, and many scam projects you can think of emerged at this time.

Ethereum (ETH): The issuance of these tokens required ETH, which drove the price of ETH to skyrocket from about $8 to $1,400 in January 2018, an almost unimaginable return at the time. Currently, ETH's trading price is around $3,650.

Ripple (XRP): Ripple is still regarded as the "banker's coin," with the theory that Ripple would overnight replace SWIFT (the international funds transfer system) and become the de facto financial standard. Although Ripple is centralized (which most people do not mind), it still attracted millions in funding. Ripple's price surged from about $0.01 to $3.80, with a current trading price of $2.41.

Strangely, the investor base for Ripple remains primarily retail investors. In the recent wave of price increases, a similar phenomenon can be seen—Ripple dominated discussions on TikTok, attracting a lot of attention, with some even asking, "What if its market cap reaches the same level as Bitcoin?" This discussion about a "four trillion dollar market cap" is somewhat mind-boggling.

Litecoin: As mentioned earlier, Litecoin saw another rise, with its price once soaring to $360. Although Charlie Lee sold all his Litecoin, it still surged again to $384 in 2021!

EOS: EOS raised $4 billion through its ICO, claiming to be the "Ethereum killer." Its price once soared to $22 but has not reached new highs since.

NEO: Another project that claimed to be an "Ethereum killer," it was referred to as "China's Ethereum," with NEO's price rising from $0.20 to $200, achieving a 1,000-fold return.

Bitcoin Cash (BCH): Roger Ver was a well-known figure in the Bitcoin community, involved in the big block debate and supporting Bitcoin Cash. At block 478,559 in August 2017, users holding 1 Bitcoin received 1 Bitcoin Cash. Due to Roger Ver's support, Bitcoin Cash's price soared to about $3,800 but gradually faded from public view.

Other Ethereum Killers: During this time, other tokens were also promoted as "Ethereum killers" (such as ADA, Tron, etc.). If a token had a "white paper," it seemed to propel its price to surge by 10 times or 100 times. Other tokens, such as Filecoin and Tezos, also launched during this period.

Yield Scams: If you think BlockFi, LUNA, Celsius, and Voyager were the first yield scams, you are mistaken! In fact, the first large-scale yield Ponzi scheme was Bitconnect, which caused many to lose millions of dollars.

Regulatory Intervention: Just like in the 2021 cycle, regulatory intervention and the outbreak of Ponzi schemes once again devastated the entire industry. The U.S. Securities and Exchange Commission (SEC) began investigating projects like EOS, and the market experienced a solid 85% correction, with Bitcoin's price dropping to around $3,500 by March 2020.

During that period, most tokens were merely scams, leading to an almost -99.999999% crash in the Altcoin market. At that time, if your token appeared in a Super Bowl advertisement, its price could instantly quintuple. For example, VIBE is a typical case.

VIBE's price soared from $0.04 to over $2, but ultimately its total market cap fell to just $262.

03
2021 Altcoin Season: DeFi, NFTs, and Memecoins Market Cap Peaked at $3 Trillion

In 2021, due to well-known reasons, everyone was working from home, staring at their computers and phones idly. The U.S. government printed $10 trillion, and that was just the government spending.

DeFi projects drove liquidity mining, NFTs brought JPEG images into the mainstream (selling for millions of dollars), and the valuations of Memecoins reached absurd levels. Bitcoin broke through $69,000, ETH reached $4,800, and the total cryptocurrency market cap surpassed $3 trillion in November 2021.

Dogecoin: Initially just a joke, its price began to skyrocket parabolically with Elon Musk's interest in the coin, becoming a hot topic on the forum platform Reddit. Today, it has almost become Elon’s meme coin, representing government efficiency. The price surged from about $0.005 to $0.74, an increase of about 15,000%.

Solana: Marketed as the next "Ethereum killer," it attracted a lot of attention with its fast transaction speeds and low fees. This was primarily promoted by SBF (now imprisoned). The price soared from $1 to about $260, an increase of 26,000%.

Shiba Inu: A meme coin mimicking Dogecoin, it created a large number of millionaires. From an almost zero market cap, its increase reached 500,000%.

DeFi Tokens: DeFi tokens like AAVE, UNI, SUSHI, and YFI saw increases ranging from 10 to 50 times, with Total Value Locked (TVL) in decentralized finance (DeFi) surpassing hundreds of billions of dollars. Today, many DeFi projects have a TVL even higher than at that time!

NFTs:
CryptoPunks: Sold for millions of dollars, with the cheapest CryptoPunk priced over 100 ETH.
Bored Ape Yacht Club (BAYC): Became a cultural phenomenon, with minimum prices reaching unbelievable levels.

Airdrop Frenzy: For some long-time users of certain projects, simply owning a $100 .eth domain could yield a $40,000 airdrop. You could even earn 2% returns in a day or a week by crossing a bridge (completing certain actions). NFT projects like BAYC also airdropped a large number of other high-value NFTs, with the total airdrop amount reaching billions of dollars.

Even crazier… almost all tokens were rising, with tokens like SAFEMOON being endorsed by figures like Dave Portnoy. Celebrities like Snoop Dogg and Paris Hilton were also endorsing various projects. Tom Brady and Stephen Curry were promoting cryptocurrency trading platforms. Even the now-defunct FTX spent money to buy the naming rights for the Miami Heat. FTX (now defunct) even purchased the naming rights for the NBA's Miami Heat.

Ponzi Schemes: A large number of Ponzi schemes emerged. While some accused us of being involved with these scams, the truth is we did not participate. Fortunately, many successfully avoided significant losses. Investing in these products and entrusting your assets to others has never been a wise move.

Death Spiral: As liquidity began to dry up (the funding support previously provided to these projects ceased), we witnessed the collapse of the aforementioned Ponzi schemes. Additionally, FTX collapsed due to the theft of user funds, followed by renewed regulatory actions from the SEC. Various large-scale scams and rug pulls ultimately led the cryptocurrency industry into a strict regulatory period.

 

 04
Key Lessons

1) Take Profits in a Timely Manner: The market changes rapidly, and you are likely to feel greedy. If you find yourself saying, "I really wish I could buy 2x more of a certain token," then what you should probably do is sell half of your position and contentedly take your profits. It doesn't matter whether you sell Bitcoin, Ethereum, or stablecoins; the key is not to be greedy.

2) Hype Cycles Are Repetitive: Each altcoin season has a narrative theme: Bitcoin forks, ICOs, DeFi, NFTs, or Memecoins. If you find a theme, it's best to stick with it, as the knowledge you accumulate in that area often disappears quickly by the end of the cycle. Instead of jumping around, focus on a specific area and reap the ultimate victory.

3) Risk Management is Crucial: The returns can be substantial, but everyone's situation is different. You are not the same as me, and I am not the same as my neighbor. Create a suitable plan for yourself and stick to it; don't constantly adjust your goals just because someone with $100,000 says, "Ten million dollars isn't enough to retire."

4) Survivors Will Thrive: Altcoins come and go, but Bitcoin and Ethereum dominate in every cycle. If a project has been around for a long time, its risk of going to zero is relatively low. If Solana can find practical applications beyond Pump.fun by 2025, it may also reach this level.

Have we learned anything from Ponzi schemes? Actually, no. From what we see, people still do not understand the concept of "Not Your Keys, Not Your Coins." You can buy crypto stocks or other leveraged crypto assets through brokerage firms, but understand that if you hold these stocks or crypto ETFs, you do not actually own any cryptocurrency. You will also never know how these companies or projects will handle the assets you invest.

In a bull market, we are often criticized for not participating in the hype of the latest Memecoins. While these speculative behaviors may seem hot right now, if you observe closely, you will find that those who stick to their strategies and remain calm have gradually begun to accumulate.

In contrast, those who only think about getting rich quickly through "10x returns," while they may attract market attention in the short term, their capital and strategies are far from comparable to those anonymous whales who consistently invest and accumulate wealth every month. These whales typically have a more solid financial foundation and clearer long-term plans. Ultimately, the market's performance and data will prove what strategies are key to success.

Finally, I wish everyone good luck in 2025.

Original Title: History of Black Out Drunk Nonsense Alt Seasons
Original Link: https://bowtiedbull.io/p/history-of-black-out-drunk-nonsense?utmsource=%2Finbox&utmmedium=reader2
Original Author: BowTied Bull
Translation: Baihua Blockchain

Article Link: https://www.hellobtc.com/kp/du/01/5627.html

Source: https://mp.weixin.qq.com/s/IQKXQEMo3BGEqRCOZDGvGA

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