Original Title: "EP33: My Experiences and Lessons in This Cycle (Episode 2)"
Original Source: Mint Ventures
· Host: Alex, Research Partner at Mint Ventures
· Guest: Colin, Freelance Trader and On-Chain Data Researcher; On-Chain Nomad, Professional On-Chain Investor
· Recording Date: July 17, 2025
Disclaimer: The content discussed in this podcast does not represent the views of the institutions of the guests, and the projects mentioned do not constitute any investment advice.
Hello everyone, welcome to WEB3 Mint To Be initiated by Mint Ventures. Here, we clarify facts, explore realities, and seek consensus in the WEB3 world through continuous questioning and deep thinking. We aim to elucidate the logic behind hot topics, provide insights that penetrate the events themselves, and introduce diverse perspectives.
Alex: Today we have two guests, both of whom are our old friends. The first is Colin, who is a well-known on-chain analyst and has experience in both the US stock market and the crypto space. The other is an on-chain nomad and my friend. He previously participated in our episode about Memes, sharing many thoughts and insights on the topic. Could you both introduce yourselves again?
Colin: Hello everyone, my name is Colin. My Twitter account is called Mr. Beig. I'm glad to be invited back to the show by Alex to share some of my opinions, thank you.
On-Chain Nomad: Hello everyone, I am the On-Chain Nomad. I entered the space in 2023 and have been focusing on the primary market since then. The profits from the primary market during the first half of the bull market were mostly converted into Bitcoin, and in the second half, into USDT, roughly following that rhythm. In this cycle, I have been paying attention to and participating in almost all the major hotspots in the primary market. Throughout this process, I have also summarized and learned some experiences and lessons. I look forward to sharing them with everyone today.
Judgment and Response Strategies for the Current Stage
Alex: Let's move into the formal discussion. The first question is closely related to our current investment operations: what are your views on the current cycle stage? What stage do you think the current crypto bull market is in, whether for Bitcoin or other assets? Based on this judgment, what are your current strategies and positions?
Colin: Okay. Personally, when defining the so-called Bitcoin cycle, I mainly use some indicators or signals from on-chain analysis, which I am more skilled at, to determine whether we are in the early, mid, or late stages of the cycle. I remember the first time I participated in the show was in mid-February this year, and I shared some of my views on this topic then, so today is a good time for a review. First, from the end of last year to the beginning of this year, I felt that BTC was very close to the end of this cycle. The reason is that signals that historically appear at every peak had already emerged.
I know that many people may disagree with this logic because, according to the normal four-year cycle, the peak should occur at the end of this year, around September to December. However, I previously wrote an article explaining this matter. If we go back to 2021, which was four years ago, the so-called first peak actually appeared in April that year—because there were two peaks that year. Almost all peak signals occurred in April 2021, not in November during the second peak. Currently, this cycle has played out a similar situation again. I dare not say that there will definitely be a second peak soon, but the current situation is almost identical to that year.
In other words, we triggered almost all the peak signals I monitor in on-chain analysis at the beginning of this year. At that time, it dropped from about 110,000 to 74,000 in March and April, then rose to the new high we see now. During the second peak in 2021, some signals also appeared. Those signals were quite special because most of them had already triggered at the first peak. This includes divergences in capital inflows, vertical rises, trends that do not pull back or consolidate much, as well as indicators like AVIV overheating, concentrated realized profits, and RUP divergences, etc. If we compare the current situation with the second peak in 2021, all these signals have reappeared. Of course, every cycle is completely different. A significant difference in this cycle is the structural change in participants. Simply put, many institutions have entered the market. Many companies are following MicroStrategy to build Bitcoin reserves, and even recently, strategic reserves for Ethereum have started to appear. If I define the current cycle stage based on my previous on-chain analysis, I still tend to believe that we are nearing the end and are currently echoing the second peak of 2021.
With this premise, I will answer the second question regarding my current position and strategy. I mentioned before that I have a relatively conservative view for the entire year of 2025. Whether from conditions within the circle or the overall macro market, such as tariffs imposed after Trump took office and the talk of firing Powell, the operational difficulty will be much greater than in 2024. In terms of positions, I currently divide them into two parts: first, the Crypto part. At the beginning of the year, when BTC reached 103,000, I had already liquidated my position and hedged with a 1x Bitcoin short position to earn an annualized return of about 7%–10% in Funding Fees. Now the price has reached a new high, surpassing my previous exit point, and some bottom signals are starting to appear, but they are not fully formed yet. My current strategy is to adopt a low-leverage short plan, with leverage controlled between 1.15 and 1.25 times. The other part is the US stock market. I have taken a more relaxed approach to the US stock market, having fully invested back in April this year. I remember mentioning this when I was on the show in May; currently, I have no plans to change this position. That’s my overall view at the moment.
Alex: Alright. Colin just reviewed his previous judgment logic regarding the current stage and shared his latest situation. Essentially, he maintains his previous judgment. I want to add a note that the reason we invited these two guests today is that their operational styles are completely different, and the types of assets they focus on vary greatly. Next, the on-chain nomad will speak, who is more adept at discovering primary market opportunities. Let's hear from him.
On-Chain Nomad: Okay, as the host mentioned, my trading style tends to focus on sentiment and the market. I mainly share from a primary market perspective because Colin's previous sharing on the secondary market was quite professional, and I don't have much experience to share on that front. From a primary market perspective, I can make a broad judgment: it is definitely not a primary market bull market right now. Since entering the space in 2023, I have experienced events like the BTC ecosystem hype around inscriptions or the Meme coin hype at the beginning of this year. It was very clear to see external traffic entering this market; not only was there internal capital speculating, but there was also external capital flowing into the primary market. That feeling is very evident. However, I believe the current market is quite quiet and far from the feeling of a primary market bull market. From the secondary market perspective, not just me, but many primary players, including those trading altcoins, share a common sentiment: in this cycle, BTC and altcoins, or the primary market, are quite disconnected. BTC is rising alone, while sometimes altcoins and the primary market do not follow BTC's upward trend. Therefore, my analysis and judgment regarding the primary market bull market are as follows. Regarding my position, I currently have about 90% of my position converted to USDT, leaving only 10% of BTC for long-term holding and not moving. I also do not plan to buy back at this position. Based on the information I have received, including from very skilled traders in the secondary market or some OGs from the past, the overall sentiment is shifting from taking risks to a defensive stance. My current state is similar.
Alex: As a very active primary player, what is your current work state or daily time allocation like?
On-Chain Nomad: It still depends on the market. I pay close attention to on-chain liquidity. In the past week or two, on-chain liquidity has warmed up a bit, so my working hours have increased accordingly. For instance, during the recent period when the on-chain market was very quiet, I spent only one or two hours a day checking information to see if there were any significant opportunities to participate in. Like a few days ago during that pump, I was paying attention and participated. However, for other on-chain PVP opportunities, I chose to pass because I believe that in the primary market, one must consider the return on investment, meaning cost-effectiveness. Sometimes, if the market trend or timing is not right, investing more energy can lead to losses.
Alex: Is this also the basic state of those top players around you or the on-chain experts currently?
On-Chain Nomad: Yes, as 0xsun famously said, "Main players do not play during garbage time," which conveys a similar meaning.
Changes in Investment Difficulty in This Cycle
Alex: Understood, let's discuss the second question of today. I know Colin has experienced several rounds of crypto cycles as an investor. Compared to past cycles, do you think the difficulty of investing in this cycle is higher or lower? What are the underlying reasons?
Colin: Okay. I personally feel that if we evaluate the entire market comprehensively, the difficulty hasn't changed significantly. Because making money in financial markets is inherently very difficult, especially when we want to earn excess returns, or Alpha. As we just discussed, I believe the most unique aspect of BTC in this cycle is its independent upgrade, meaning it stands out on its own. It seems like it is the only one rising, even ETH is being overshadowed. Another strange situation is Trump's election, which has led to a tariff war in 2025. These two events will have a significant impact on anyone operating in the market. As the market matures, many immature assets—those that can be heated purely by capital—will gradually be eliminated. Therefore, I am not too surprised by BTC's independent upgrade. As for the tariff war, many people may pay attention to it, but I think if you are a long-term investor in BTC, this matter is just noise.
For example, if you are a holder who has held BTC since 2022, 2021, or even earlier without selling, you would feel particularly satisfied in this cycle. Because in the past few cycles, you might have held BTC while watching others' altcoins rise by dozens or even hundreds of times, which could be psychologically disturbing. However, if you are a holder today and have not sold at all in this cycle, you would feel very content. For you, the difficulty might be lower. This is because the BTC you hold has been continuously rising, while other coins have not performed well, and some have even been in a downtrend. If we must talk about difficulty, it will certainly increase with the entry of institutions. Our opponents are no longer those old OGs or whales, but rather hedge institutions or quantitative funds that have been active in traditional financial markets for decades. Their entry promotes a more mature market, and the maturity of the market further attracts more institutions to participate, creating a cyclical process. The result of this process is that the volatility of BTC will decrease significantly, making it harder to hunt for Alpha. But as I just mentioned, if you simply want to earn BTC's Beta, which is just to buy and hold, I believe the current market's difficulty will not significantly increase for you.
Alex: Understood. In fact, this episode is the second part of the theme "My Experiences and Lessons in This Cycle." In the last episode, I also invited two friends to discuss this topic, and their feedback was that this cycle is clearly more difficult. Colin's feedback was that it is okay, not significantly more difficult. Between these two answers, we can compare and see that Colin's statement contains a small hidden premise: if you are a BTC holder, you might find this cycle not so difficult, or even easier. This is because most of the capital attention and fundamental improvements in this cycle are actually focused on BTC. However, for many investors seeking higher Alpha, especially in the first half of this cycle, many still placed their hopes on altcoins, but the performance of altcoins has not been good. So, I would like to ask the On-Chain Nomad to share his thoughts on how the difficulty of this cycle compares to when you first encountered crypto assets in the last cycle.
On-Chain Nomad: I think this is a particularly good question, especially for primary market players. Sometimes when engaging in the primary market, you hear many different voices: some say the primary market has become more difficult, while others compare it to the past. At this point, a very important term comes into play—bias. For primary market players, bias can be very detrimental. If you look at the market with bias, you will distance yourself from opportunities to make money. Because in the primary market, you can always see those who are creating hype on Twitter, regardless of the market conditions. Even during a volatile market, like when BTC was not showing a clear upward trend recently, there were still many people on Twitter creating hype. For example, Aoying was a relatively popular secondary market player who achieved good results even in a volatile market. I have also tracked some of his trading logic or his trading system. Not to mention the opportunities in Memes or inscriptions from earlier. You will find that at different stages, the primary market always has opportunities that can earn you many multiples of Alpha, and there are always people who can seize these opportunities. Recently, I gave an example in a small group: the primary market is very much like a cart carrying a whole load of gold bricks to the heavens. And we players are like citizens by the roadside, picking up the gold bricks that fall from the cart as it ascends. These Alpha opportunities and Memes are initially covered by a cloth on the cart. As it gradually ascends, the cloth slowly slips off, the market cap continues to increase, and the gold bricks keep falling. And we primary market players are there to pick up the gold bricks. There will always be such a cart ascending in front of us, and what we can do is to get as close to it as possible, to get as close to market opportunities. So I believe that whether in a bull market or a bear market, regardless of the stage, there will always be good opportunities in the primary market that you can seize. Since I entered the space in 2023, I have experienced some transitions between bull and bear markets. But I have always believed that new opportunities will continuously appear in front of you in the primary market. I still hold the view that the primary market is a place that can help people grow from 100,000 to 100 million.
Alex: You just mentioned in your analogy that the opportunities in the primary market are like a cart, initially covered with cloth. For players wanting to seize opportunities, most people initially cannot identify whether the cart covered with cloth contains gold bricks or worthless junk. You also mentioned that in the past cycle of the primary market, there were opportunities like inscriptions, Memes, and many others. From your perspective, has the difficulty of approaching these carts and identifying them to pick up gold bricks changed?
On-Chain Nomad: I think this change should be viewed in conjunction with the narrative. For example, if the heavenly realm hopes to requisition a batch of goods from the lower realm, the number of carts heading to the heavenly realm will increase. Just like the BTC ecosystem and the Meme ecosystem recently. When a narrative emerges, its wealth creation effect and opportunities will increase. If ten carts pass by you instead of just one, you will have more chances to pick up gold bricks, and it will be easier. This goes back to what we discussed in the previous question about timing and trends, which is also quite important in the primary market. When a trend comes, you need to invest more energy, be more focused, and work more efficiently to earn more money. When there is no trend, you should be more stable and cautious. Even if you don't pick up more gold bricks, at least you shouldn't let the ones you have already picked up fall to the ground.
Alex: Let me summarize your answer briefly. First, your mindset is very optimistic and open, believing that opportunities in the primary market always exist. Therefore, you maintain continuous attention to the market. Second, even though the forms of these opportunities and the narratives behind them are constantly changing, you believe that the possibility of identifying, approaching, and profiting from them always exists. Even if their forms vary, there are still opportunities for ordinary people to seize. So you do not negatively perceive that it has become more difficult now.
On-Chain Nomad: Yes, I think especially for players in the primary market, we should not give ourselves such psychological hints. We need to distinguish between taking risks and playing defensively, but regardless, we should maintain an open attitude towards opportunities and reject bias. Bias is a big taboo in the primary market. Once you look at the market with bias, opportunities to make money will definitely drift away from you.
The Most Correct Operation in This Cycle
Alex: OK, let's talk about the third small question. In this cycle, from 2023 to now, we can consider that it is not completely over. What was the most correct investment operation or strategy you made during this cycle? Can you share the thought process and background at that time?
On-Chain Nomad: I have summarized two major directions for the most correct operation and strategy in this cycle. The first, which I just mentioned, I categorize as the "Leading Strategy." We first talk about narratives that emerge, such as the BTC ecosystem, Meme ecosystem, etc. We need to participate as much as possible in those leading assets within these sectors, engaging with those that have strong consensus, and try to allocate our positions accordingly. For example, in inscriptions, some leading assets like ordi and sats, or leading assets of new protocols, have higher multiples, liquidity, and market cap ceilings. When we trade Memes, some leading platform tokens and leading tokens in AI narrative have the highest multiples, market caps, and liquidity. Therefore, in this round of the primary market, a more valuable or correct operation for me has been to seize more leading opportunities and participate less in second or third-tier projects. There is a classic saying: "The first tier is solid, while the second tier is fluid." The second tier is very variable, but the leading assets that everyone agrees on and are favored by the market have greater potential. You can participate in other new opportunities, but when the narrative begins to trend upward, I personally will reinvest some of the profits into leading assets. When it reaches a satisfactory stage in my mind, I will then cash out overall.
The second point is something a senior taught me when I participated in the primary market, which I find very valuable: dynamic rebalancing. This is really important for primary players. You can think of it as the first half and second half of a bull market. When I participate in these primary market opportunities in the first half of the bull market, whether it is on the BTC chain, Ethereum chain, or SOL chain, I will periodically handle the profits brought by the primary market. For example, every week or every two weeks, I will perform dynamic rebalancing to reallocate my primary positions. For instance, I initially set that during each rebalancing, BTC should account for 50% of the total position, primary positions should account for 30%, and liquid USDT should account for 20%. Through such periodic rebalancing, I can keep the position structure healthier and reduce drawdowns. By the time the second half arrives, you can gradually reduce your BTC position and allocate more to USDT, while also reducing your primary positions. In this process, your primary profits will continuously convert into BTC and USDT, thus avoiding significant drawdowns due to market volatility. Therefore, when trading in the primary market, it is essential to perform dynamic rebalancing. Because many times, you think the K-line is soaring, and you have made a floating profit, but in reality, it involves three things. Dynamic rebalancing can keep your positions healthy in the primary market and allow you to make more rational decisions.
Alex: Understood. Essentially, we set a discipline to manage some of our human weaknesses through this discipline. Next, let's hear from Colin.
Colin: I think at the very beginning of this cycle, around September to December 2023, I started to build my BTC position in batches. At that time, I was operating based on my own spot cycle system, which involves some on-chain signals. Although I did not buy at the very bottom, I was still influenced by market sentiment, feeling some hesitation and fear to act. However, I still followed the signals and my trading plan, investing in BTC at a slightly later point in time. This trade has been held since then, and I liquidated it from the end of last year to the beginning of this year. This trade has brought me the largest returns over the past one to two years because Bitcoin has been a standout performer in this cycle.
If I had to say, I cleared my Bitcoin position at the beginning of the year. Although looking back now, I missed out on the rise from 103,000 to the current level, I actually reviewed it carefully and found that during that time, my returns were only from the funding fee. Even if I hadn't cleared my position at the beginning of the year, I might not have achieved better results. The reason is that, as another guest just mentioned, if we put more effort into trading at the wrong time, we may not necessarily make more money; in fact, we might lose money. I strongly agree with this viewpoint. My system and judgment had already indicated to me at the end of last year that 2025 would be a difficult year to operate in, with a hellish level of difficulty. So, at that time, I chose to clear my position and instead adopted a strategy to earn funding fees, which actually helped me adjust my mindset significantly. Otherwise, if I had still held my position, especially if I had been fully invested in BTC like before, I might have made more poor decisions due to the increased difficulty of the external environment. Therefore, regarding this trade, although I did miss out on the rise at the top, if I were to go back to the beginning of the year, I would still make the same choice; otherwise, my mindset and operations might have become distorted.
Another operation I think was quite good was at the beginning of April this year. At that time, the market was experiencing severe panic due to tariffs, not only in the Bitcoin market but also in the U.S. stock market, which showed similar conditions. I observed an interesting phenomenon that I can share with everyone. Usually, when we look at the three major U.S. stock indices, their fluctuations are typically very stable, with daily changes of 1-2% within a small range. However, during the workdays from the first week to the second week of April, the fluctuations in the stock indices at the market open became exaggerated to the point where it seemed like the market was broken. For example, the index might rise by 3% and then drop sharply, with a decline of up to 5%. Just looking at the index itself, one could already sense that there was excessive panic in the market. So, I decided to buy back all the U.S. stock positions I had previously cleared. There was also an interesting observation point: in Taiwan, we have a national security fund that announces its entry into the market under specific circumstances.
If you review history, you will find that every time the national security fund announces its entry, it is almost always at a relatively good position for the Taiwan stock market, with a high historical win rate. Interestingly, the timing they choose not only corresponds to a good entry point for the Taiwan stock market but also for the U.S. stock market. I don't know the specific reason; maybe they are really good at it. But at that time, besides observing the abnormal fluctuations in the indices, I also saw this news, so I decided to fully reinvest in U.S. stocks on April 9. It turned out that I indeed caught a good low point, and the subsequent market has been rising ever since. I believe this was my best operation this year; although it doesn't belong to crypto, this part is worth sharing. In the future, if you see similar situations, such as exaggerated fluctuations in stock market indices, you can observe whether the market has entered a stage of excessive panic. This is an extreme situation that should not occur, and once it does, it can be worth paying attention to.
Alex: Understood. I feel that Colin's mention of the huge fluctuations in the stock market and the entry of the national security fund both indicate that emotions have become chaotic and prices have deviated significantly. This is not only true in the stock market; during the last bear market cycle, like in May 2020 when Luna collapsed, and in November 2022 when FTX collapsed, Ethereum could drop by 20% in a single day. These were times of extreme emotions. At that time, as long as the relative position was at a historically low level, the long-term results would generally be good.
Mistakes and Lessons in This Cycle
Alex: Let's move on to the next question. So far in this cycle, what do you think is the biggest mistake you made in your investments? What are your summaries and reflections on it?
Colin: Okay, I actually touched on this question a bit in my last episode with Alex. I think the most painful experience in this cycle was my excessive trust in Ethereum's second-tier status. Although ETH is still second-tier now, I had already started building my Bitcoin position during the early to mid stages of the bull market. At that time, I thought I could earn some Alpha through ETH. My logic was that ETH and BTC are highly correlated, and ETH's volatility is greater. Since the bull market had just begun, ETH's upside potential should be greater than BTC's. So, I exchanged part of my BTC spot for ETH, effectively going long on the ETH/BTC exchange rate. In hindsight, this operation was a significant failure. Although I didn't lose money, I missed out on substantial potential returns.
If I remember correctly, in the first half of last year, the ETH/BTC exchange rate fluctuated around 0.05, and after the big drop on August 5, it continued to decline. At that time, I lost potential returns, which is the opportunity cost. I believed that Ethereum was a second-tier asset, which was incomparable. Its market cap was significantly different from the third and fourth places. At that time, Bitcoin had passed the so-called ETF, and Ethereum was also speculating on this expectation, which later indeed came true. I was a bit overly FOMO, thinking that if Bitcoin's performance was so beautiful after passing the ETF, then Ethereum would likely have a similar performance. But the reality did not go as I wished; after the ETF was launched, it became a channel for old funds to exit. I think this lesson is something everyone should recognize and keep in mind: in our current cryptocurrency market, apart from Bitcoin, you really cannot have too strong a belief in any other coin.
Belief is a double-edged sword. For example, if you believe in and hold a certain coin, you might make a huge profit, multiplying it by hundreds, thousands, or even tens of thousands of times. But because its odds are very good, it inevitably leads to a very low win rate. This is a mutually exclusive relationship. If you encounter a trading opportunity today with high odds and high win rates, there will definitely be another problem: it occurs very infrequently. It is impossible for all three conditions to be met simultaneously. Another issue with belief is that it can lead to a significant maximum drawdown (MDD) in your asset curve, meaning the drawdown is too large. If the MDD is too large, it is a significant taboo in the trading field. Even if it rebounds sharply afterward, what if it doesn't? Because your win rate is very low, once you fail, for example, if your assets lose 80%, you would need to multiply it by five times to break even.
This is a lesson I learned. I believe that at the current stage of this market, apart from Bitcoin, there is no other coin in which you can truly have a strong belief and then buy and hold it indefinitely; Ethereum is not an exception. I cleared this batch of Ethereum at around 4000 in December last year, when Trump was elected, based on some events and data. At that time, I was actually quite reluctant because it hadn't even touched its previous high. I was still wondering if Trump's election would push Ethereum to a new high, but it didn't happen. After all, the signals and some data had already supported my decision to sell, so despite my reluctance, I executed the sale. In hindsight, this operation was correct and compensated for the opportunity cost I had previously lost.
On-Chain Nomad: This question is really paved with money; every point behind it is an experience of losing quite a bit of money. The first point I want to share is: do not bet on price movements in the primary market. The core of the primary market is to seek asymmetric opportunities, which are those with high win rates and high odds. If we gamble on whether it will rise or fall during the process of judging opportunities, or bet on what the market maker will do, the more you gamble, the lower your win rate for that opportunity will be. Looking back at my past experiences of losing money, it often stemmed from too much gambling rather than being based on my trading logic or judgment. If you are gambling or guessing the future trend, that is often unreliable.
The second point is a fatal issue for new players: not having strict stop-losses, or not setting stop-losses at all. This issue is not only critical when building positions but also very important when selling or taking profits. For example, during the Trump coin period, I participated in trading with several accounts, some of which were constantly selling, while others were set up to be more strategic. One of those more strategic accounts rose about 20 times from the purchase to the peak, yielding very considerable profits. However, due to a lack of firm concepts regarding stop-losses or not executing them well, the profits experienced a significant drawdown, which was really painful. Therefore, for new players in the primary market, it is essential to pay attention to stop-losses, not only for cost stop-losses but also for profit stop-losses.
The third point is inadequate research, which is also a very fatal issue. Sometimes you think you have done your research, but looking back afterward, you realize it was very superficial and incomplete. For example, before buying an asset, have you clearly defined your reasons for buying it? Have you decided how much to buy? How long do you plan to hold it? What is your expected return on it? Have you systematically browsed through the information sources, influential traders, and KOL groups related to this project, as well as public information on Twitter? Or before selling, did you conduct sufficient research and repeat the previous steps? I think this is crucial; sometimes, we deceive ourselves into thinking we have done research when we actually haven't. Not conducting thorough research can also affect buying and selling actions.
These are the three main points I believe are crucial. There are also some smaller points: for instance, when bottom-fishing or averaging down, you must control your position and not keep adding to your position as the price drops, as that can also be fatal; do not participate in trading while doing other things, such as shopping outside or playing games and then seeing an opportunity to participate; trading efficiency during such times is often very poor and can easily lead to losses. These are some of the painful experiences.
Alex: Alright, the sharing is very detailed and good. Originally, our next question was about the most critical experience or investment insight you gained in this cycle. Is there anything you think can be reused as a core takeaway for the next cycle? But actually, both of you have already mentioned many similar insights in your previous answers. So, aside from what has been discussed, if you had to summarize your most important takeaway or insight from this cycle in one or two sentences, what would it be?
Colin: I think another point worth sharing is a phenomenon I observed in March last year. At that time, BTC had risen to 73,000 and 74,000, marking the first wave of the main upward trend. However, if you compare the sentiment in the crypto market with that in the U.S. stock market, you will find a very interesting phenomenon: the U.S. stock market had actually gone sideways at that time, lacking enthusiasm, unlike a genuine upward trend where it steadily rises. But the sentiment in the BTC market was extremely hot. Another peculiar situation was that, at that time, the expectations for interest rate cuts in the entire macro environment were actually being suppressed quite severely. The U.S. stock market had already reacted to this, but the Bitcoin market showed no reaction at all. So, I felt a bit strange at that time. Therefore, in April, I actually sold a significant portion of my altcoin positions. The subsequent trend is known to everyone; Bitcoin went sideways from March until October, while altcoins chose to enter a poor bear market during the same period.
In this observation, I want to make two points: First, we don't necessarily have to focus only on information or sentiment within our circle. We can try to compare the sentiment within our circle with other markets, such as the stock market, commodity market, or bond market. I think this is a pretty good perspective. The second point is, assuming we believe the bull market has not ended but want to take some protective measures, aside from partially taking profits, we should first ensure that we keep our Bitcoin; secondly, we should eliminate some relatively weaker assets. For example, if you originally allocated five altcoins, you can first remove the weaker ones. We can prioritize the elimination of high-risk, weak assets. This is also a way to reduce overall risk. These two points are what I think are good perspectives to observe.
On-Chain Nomad: I actually have another very important point to share regarding this question. If I had to mention just one, it would be that you must solidify your trading system. I believe this is a very key, if not the only, issue that distinguishes whether a first-tier player can reach A8 or even A9. I have a very deep feeling about this point. Whether it's myself or those impressive traders I observe, like 0xsun, Dayu, Lengjing, and Aoying, they all have very strong trading systems. You can clearly feel their trading logic. When we see an opportunity, we often find some investment opportunities from emotions or logic, and then react using our past accumulated trading habits to validate our previous trading logic and system, ultimately locking in profits. This process is very experience-dependent.
For example, when I entered the market in 2023, I had already observed that 0xsun, Lengjing, Laser Cat, James Monkey, and Wang Xiaoer were not always that impressive. They were also very PVP when they were trading dirt dogs at the beginning of 2023, and it was a makeshift team. But why were they able to seize significant opportunities during the Trump coin or the subsequent meme wave? Because they had already solidified their systems beforehand. When liquidity comes in and the floodgates open, with more opportunities, they can better seize those opportunities and expand their victories. I think this is the biggest difference between A8, A9 first-tier traders and PVP first-tier traders. If we lack such experience in the past, is there a way to make up for it? I believe there is. For example, take the Pump coin as an example; it has a very short reaction time after opening. If you don't have a solid trading system and can't react quickly, what should you do? There is also a solution: you can fully anticipate different scenarios in advance.
You can think through various possibilities and prepare contingency plans, so when you participate at the opening, you are better prepared and more targeted. This can somewhat compensate for the lack or imperfection of a trading system. I think improving is also very simple: after each trade, thoroughly review your actions. I recently realized that writing daily reports is very important for first-tier players. I see some first-tier players, including host Alex, have the habit of writing daily reports. In this process, you are actually honing your ability to summarize and review events and trading actions. Those validated correct logics will stay in your mind, and those validated mistakes will also form lessons that remain in your memory. Therefore, I believe these two points are very important.
I also want to share a quote that I think is closely related to this topic, which I saw in an article before. It consists of four sentences, and I find it very classic: Risk, whether from changes in the era, policies, or uncontrollable events, is something everyone must face. The risks we face ourselves, such as chasing highs, selling too early, or hesitating, often stem from our lack of systematic training, which exacerbates losses. Whether you can make money actually depends on whether you have trained a reflexive response mechanism. The biggest enemy of retail investors is not the market, but their own emotions and lack of trained habits. I think these sentences summarize this topic quite well.
Alex: Very good. The first point is the continuous refinement and solidification of one's trading system. When the system is not yet perfect, at least you should have a well-prepared trading plan in advance to supplement it.
Judgment on Altcoin Season
Alex: Next, let's talk about a topic that everyone is very concerned about but has also been quite painful—the issue of altcoins. In this round, even with some rebounds and improvements in the last couple of days, altcoins have still significantly underperformed BTC and ETH. In your upcoming trading plans, do you still include assessments and preparations for altcoin season? Are you still looking forward to altcoin season? Do you think it will still see large-scale trends and good wealth effects? Of course, altcoin season includes not only some secondary assets, including smaller altcoins than Ethereum, but also some on-chain opportunities that On-Chain Nomad is particularly focused on.
On-Chain Nomad: Alright, I will only talk about the on-chain part because I am not very familiar with secondary market altcoins. I believe the primary market has very obvious cyclicality. You can think of it as "harvesting crops"; it indeed requires such a process. After a period of accumulation, the retail investors in the market may have grown taller or stronger, and liquidity has accumulated quite well. So when some narratives emerge, whether it's inscriptions or memes, retail investors flock in, and the market's liquidity will improve, leading to a bull market in the primary market that attracts outside traffic to push the market up. However, after the recent round of harvesting in the meme market, I believe the retail investors have been largely harvested, and it actually requires a period of rest and recovery before the "distant water" of the primary market can flow again. Therefore, my attitude towards participating in the primary market going forward is still cautious. However, I have also observed a change in this process: recently, it has become evident that the primary market is now more focused on whether there are market makers involved. For example, in the recent popular PUMP and BONK platform PK, it is very clear that BONK has market makers entering, pulling typical moves to attract people to play in the market. So if you still want to participate in primary opportunities recently, you must follow the market makers and avoid playing those with high retail investor content. The lower the retail investor content, the greater the potential of that project, which is a significant change I have observed.
I also have a question for Alex and Colin. Recently, there seems to be a renewed fantasy about Ethereum, and I've seen many voices suggesting that Ethereum could achieve a twofold increase after reaching new highs, roughly a 10,000-point increase. I would like to hear your thoughts on this.
Alex: Okay, we will discuss this as a separate topic shortly. Now, returning to what On-Chain Nomad said about being in a waiting state for on-chain opportunities, waiting for the retail investors' recovery to end before striking when new narratives emerge. If we had to operate, it might be relatively better to participate in projects where market makers are active and have clear strategies; while those purely driven by consensus, community, and emotions currently carry greater risks. Colin, what are your thoughts on altcoin season?
Colin: I have two main points to share regarding the topic of altcoin season. The first point is that we are all here to make money in this market. As long as we can make money, no one really cares whether there is an altcoin season or not. Even if there is no altcoin season, if you can make a lot of money, I believe everyone would accept that. Therefore, I think before discussing altcoin season, we need to return to a more fundamental question—when you choose to buy or even trade altcoin contracts, you must first recognize one thing: altcoins are highly volatile. Most retail investors want to buy altcoins because they believe they might rise more than Bitcoin.
Of course, they will also fall more than Bitcoin when they drop. But I think regardless of your strategy, you must recognize one thing: the decisive factor for every purchase or every trade is still its expected value. For example, like a lottery, you can win a lot of money once, but the winning rate is very low. This is the relationship between odds and win rates. If you want to execute a so-called buy and hold strategy on altcoins today, I believe that is not okay because their expected value should not be positive. Suppose you bought an altcoin at the beginning of 2024, and then it experienced a period of Bitcoin's sideways movement, causing the altcoin to drop by 80%. Even if it later rises fourfold, you are still losing money, and your cost cannot be recovered. This is a very simple mathematical problem. Regardless of whether altcoin season will come or whether you look forward to it, I believe this proposition itself is not fundamental enough. Returning to the first principles of the market, for altcoins to rise, there needs to be an influx of capital. If there is to be an altcoin season, it means that capital must flow significantly into all current altcoins to be called a season. But given the current number of altcoins, achieving a so-called broad rise is very difficult.
Now, moving on to the second point. Some people may have noticed that during the first wave of the main upward trend in 2024, at the beginning of the year, the altcoin market actually rose alongside Bitcoin. However, it then went through a painful period until November, which was around the time Trump was elected, when altcoins saw another wave of increases. But this increase was very different from the one at the beginning of the year. The altcoin rise at that time was characterized by sector rotation. For example, DeFi might rise today, platform coins tomorrow, and oracles the day after, very distinctly. Today, one sector might surge by dozens of points, and two or three days later, another sector takes over. This is no longer the broad rise we saw at the beginning of the year. At that time, I realized that a president who was at least perceived as crypto-friendly was elected, a major event that brought Bitcoin to over 100,000, yet the altcoin market was only showing a rotation in rises. I found this very unreasonable. Logically, it should have risen more sharply; the rotation indicates a lack of funds.
We can imagine a group of smart funds taking profits from sector A after it rises and then moving to sector B, and then to sector C, which is why we see this rotation. Since I observed this phenomenon, I have maintained a pessimistic attitude towards the upcoming altcoin market. Because under the influence of such a significant event, if only a rotational rise occurs, the direction in which funds favor has become very clear. After all, the entire year of 2024 is Bitcoin's stage, and with such a rotational rise signal at the end of the year, I personally feel very pessimistic about altcoin season from that time until now. The recent improvements in the altcoin market have basically been driven by significant rises in Bitcoin or Ethereum, which have pulled them up. The key is not whether they have risen, but whether they can maintain that rise afterward.
Maintaining does not necessarily mean continuing to rise; at the very least, it should hold its original position. Suppose an altcoin rises by 80% and then slowly falls back down; this is very painful for holders and may be a process with negative expected value. So, returning to the first point, essentially, if you want to trade altcoins today, you need to realize one thing: you are playing a "timing" game. What you need to consider is not whether it can rise more than Bitcoin in the future, but rather that when it falls, if the retracement is too large, even if it later rises several times, you may still not be able to return to the cost line. This situation was evident from April to May last year, when many of my friends thought altcoins had dropped enough and began to buy heavily. However, many couldn't resist cutting losses and had to bear the losses. So I think this experience needs to be shared: be aware that the upside potential is large, while the downside is at most 100%. However, in reality, if you drop by 80%, you need to rise five times to break even. So it is about "timing"; in other words, when buying altcoins, not only do you need to buy at the right position, but you also need to choose the right timing. Altcoin trading is not just about betting on volatility; timing is also a very critical factor.
Alex: Understood, that was very comprehensive. Regarding the question of altcoin season, I actually discussed it with the other two guests in the last episode. At that time, I shared our team's internal views, and our current perspective has not changed since then: we are not optimistic. The conclusion is very simple; even though altcoins have rebounded recently, our judgment remains pessimistic, especially regarding the sustainability of altcoins. The reason is straightforward: the fundamentals of altcoins are generally very poor. As Colin just mentioned, the disillusionment with altcoin valuations in this round is typical and has changed in cycles. Around February and March 2024, altcoins experienced explosive performance, and everyone felt like they were back in 2021, asking about targets in the group every day, with everything surging, feeling like money was about to be thrown out. After that bubble burst, when Trump was elected in 2024, Bitcoin surged first, and altcoins began to follow, but this round of following was clearly weak and hesitant. Altcoins were quickly replaced by the meme coin craze. Liquidity disappeared, and enthusiasm waned. This round could be considered the third small rebound of altcoins in this cycle, but I personally feel it is even weaker. For example, we saw Ethereum rise by 22% in the past week, but its market cap is far smaller than that of its Layer 1 and Layer 2 counterparts, most of which did not rise by 22% and did not outperform Ethereum. This performance can only be described as trying to keep up. Some altcoins that appear to have larger gains often have also experienced significant past declines, such as Algo and projects like Story that focus on IP chains, which have risen over Ethereum, recently gaining 30% to 40%, but they also fell more significantly before. Therefore, our team's current judgment on altcoins remains: the fundamentals are weak, the narratives are weak, and the valuations continue to collapse. This can also be understood as a sign of the market maturing, a process of investor maturation. From this perspective, it is quite reasonable.
Preparation for Cross-Industry Investment
Alex: Next, we will move on to the last question we originally planned for today, after which we can discuss Ethereum-related topics. This question is about many people around us: currently, many crypto investors and even practitioners believe that opportunities in the industry are rapidly decreasing, so they are starting to look at employment and investment opportunities outside the industry, such as in the US stock market, Hong Kong stocks, or even A-shares. A-shares have actually performed quite well recently. Do you have any specific views on this matter, or have your own practices changed? Are you considering opportunities outside of crypto? We know Colin is investing in US stocks, and I remember you mainly focus on buying indices. Do you have plans to start researching some individual US stocks? And On-Chain Nomad, do you have any preparations in this regard?
Colin: Yes, I am indeed investing in US stocks, primarily focusing on indices. Regarding whether opportunities in the crypto industry are becoming fewer, I think, as we mentioned earlier, this market is gradually maturing. It is entering the public's view in various forms and through more channels. More and more people are starting to see Bitcoin and even want to participate. The market cap of BTC is indeed growing at a visible speed. This process is akin to Bitcoin evolving from a primitive era into a modern technological society. The first thing is that the volatility of the Bitcoin market will significantly decrease. At the same time, large institutional funds from traditional financial markets, such as "crocodiles" and "sharks," will also enter. Whether it is arbitrage opportunities or high-frequency trading opportunities, they will want a piece of the pie. Once they come in, the dividends will become fewer. This is similar to game theory; as opponents become stronger, the pie is gradually divided, and the dividends will naturally decrease.
Many people are starting to feel that the crypto market is becoming increasingly difficult to navigate, feeling it is no longer as pure as before. For example, the altcoin season has not materialized in this cycle. As Alex just mentioned, the rise of Ethereum compared to some Layer 1 and Layer 2 altcoins in its ecosystem is not significantly different; Ethereum even slightly outperforms. This can actually be viewed from the perspective of the influx of funds from traditional financial institutions. If a large amount of capital flows into crypto from the outside world, their first choice of assets will certainly not be some old altcoins. They will at most be played for a while before moving on to something else. If today, funds are truly to be invested in a market for investment purposes, it is unlikely they would choose assets outside of Bitcoin. Speaking of Ethereum, it now has ETFs and can be traded in the US market. Although it cannot be traded directly, there are at least dedicated ETF products available. Therefore, it may experience significant gains, even surpassing traditional altcoins, because if this bull market is led by institutional funds, then besides Bitcoin, their second choice of asset will certainly be Ethereum. This statement may induce FOMO, but I do not mean to say that I am very bullish on Ethereum right now, as I still have great respect for the top signals of Bitcoin.
What I want to say is: if the Bitcoin market continues to evolve in the future, there will be a situation where the strong get stronger. Now Solana is also almost getting an ETF; there is one that, although not yet formal and is relatively niche, has already passed. If in the future Solana has a complete ETF purchasing channel like Ethereum, I still believe that when external funds consider investment allocations, their first choice will be Bitcoin, and the second will be Ethereum; currently, there is no third option. This is my personal bias. Will opportunities become fewer? From the perspective I just described, of course, they will. But to express it more precisely, it should be said that the difficulty of obtaining excess returns in this market will increase. If you are still a believer in Bitcoin and a holder, as long as you hold Bitcoin steadily, with continuous inflow of external funds, they are actually helping you lift the price and take over; you are, in fact, the most secure type of person. However, if you hope to earn excess returns through Bitcoin or even other cryptocurrencies to outperform Bitcoin's performance, the difficulty will certainly increase vertically. Because your opponents are a group of experienced traditional financial players who have been operating for decades; these are "crocodile" and "shark" level opponents. Competing against them will be very challenging. This is where the real difficulty lies.
That said, the Bitcoin market has not yet reached twenty years; compared to traditional stock markets, foreign exchange, commodities, and raw materials, it is still a very, very new market. So while opportunities in the crypto space may decrease, compared to other mature markets, it still has many opportunities, and the dividends still exist. You can imagine that when the Bitcoin market exceeds one hundred years, it will still be a relatively young asset compared to the stock market, which will be more mature. Of course, as time goes on, volatility will decrease, and opponents will become stronger; this is inevitable. At this current stage, being under twenty years old, there are still many opportunities compared to other markets.
On-Chain Nomad: I think this issue really depends on the size of the capital. The smaller the capital size, the higher the growth efficiency in the crypto space. I also plan to allocate in three directions: crypto, US stocks, and Hong Kong stocks, mainly for two reasons: first, to reduce my own risk, as concentrating all funds in the crypto space certainly carries risks. Second, I hope to expand my trading strike zone, meaning I want to be better positioned to participate when opportunities arise in the US or Hong Kong stock markets.
Still bullish on Ethereum?
Alex: Finally, let's discuss the question about Ethereum that On-Chain Nomad just raised. Ethereum has recently seen a significant rebound; from its recent low, it has risen from below 1400 to over 3400 now. Recently, the discourse around being bullish on Ethereum has become very dense, and the number of publicly traded companies buying Ethereum as a reserve is increasing daily. Can Ethereum's subsequent gains fill the gap in the Bitcoin exchange rate? Can it rise to 8000 or even 10000? Let me first share my personal view.
First of all, I believe that Ethereum's fundamentals have not improved significantly at this point. It is different from Bitcoin; Bitcoin's fundamentals have clearly improved in this cycle compared to the previous two cycles, including the expansion of compliance pathways and the consensus around it as a leading non-sovereign asset, electronic gold, which has been further strengthened at both institutional and national levels. More sovereign institutions are buying, and there are state-level reserve funds being established. Although the number of these reserve funds is lower than our expectations from last year, and the anticipated establishment of federal-level reserve funds in the US to buy Bitcoin has not materialized in this Trump policy cycle, the marginal improvements are evident. I think it is quite reasonable for Bitcoin to have risen to this stage, nearly doubling from the last cycle. However, I believe Ethereum's fundamentals are weaker than in the previous cycle. In the last cycle, Ethereum, as a smart contract platform, was essentially a computing system that can be understood as a platform providing on-chain computing resources. The value of the system is predicated on the number of applications and ecosystems running on it, and the demand for the system's resources must be sufficient to support its valuation. However, in this round, all public chains, including SOL, which has performed relatively well, have applications that are much weaker than in the previous cycle. The trading volume and activity of memes in this round have surpassed those of the last cycle, which may be one reason why SOL has performed relatively well, as it is indeed the main battlefield for memes.
However, Ethereum's resource demand and business data in all aspects are not as good as in the previous cycle, and this time there are many Rollups, which have diverted a large number of users and applications to Layer 2. After the Cancun upgrade, the consumption of Ethereum's resources has further weakened, so these are the main reasons for its poor fundamentals. Of course, a significant portion of the purchasing funds comes from the US stock market and Wall Street, especially after the introduction of ETFs. The recent surge in Ethereum is primarily driven by funds from the US stock market and Wall Street. But I believe that even with the same source of funds, their long-term views on Bitcoin and Ethereum are still quite different. The fundamentals of Bitcoin have already been discussed; it is electronic gold, and this positioning will not waver in this cycle. In contrast, Ethereum is essentially a computer system, more like a tech company. Its fundamentals have not improved even when the price rises. We see that Ethereum has risen so much in the past few days, yet its average on-chain Gas price remains at 1-2, which is very depleted, even lower than during the bear market in 2022, but this has been the norm for Ethereum this year. Therefore, I believe this fundamental aspect has long-term traction on the price. With such a fundamental background, it is difficult to expect it to rise as much as Bitcoin. Because if it reaches 10,000, it means it has doubled, which is comparable to Bitcoin. If Ethereum reaches 10,000, Bitcoin cannot remain at its current 120,000; it is likely to rise to 140,000-150,000, meaning both would have doubled.
However, in terms of fundamental improvement, Ethereum is not as good as Bitcoin, so I find it very difficult for it to reach 10,000 and hard to achieve a twofold increase compared to the previous cycle. But that does not mean I am not optimistic about Ethereum's future rise. The main driving force behind Ethereum's current rise is still the so-called flywheel of coin-stock companies. The reason it can rise so much is that the flywheel of coin-stock companies themed around Ethereum is still turning. A hallmark event that allows this flywheel to turn is that many people originally thought only recognized large companies like MicroStrategy could raise enough money from the secondary market to issue more stocks and then buy Bitcoin, completing this cycle, which has been validated through multiple rounds. Many people initially did not see that Ethereum reserve companies could also achieve such a flywheel. Currently, this flywheel seems to have been operational from late June to mid-July. Projects represented by SharpLink (code: Sbet) can raise hundreds of millions of dollars weekly, and this money can be used to buy Ethereum. Once the flywheel starts turning, Ethereum rises, and the company continues to rise, forming a positive cycle of wealth effect. The purchasing funds in the US, including many retail investors, are also "dumb money"; as long as they see the price rising, they will think the strategy is good, the company is good, and will further buy and provide funds for these companies to buy Ethereum. This flywheel is currently in motion. As for what price level this positive cycle can reach before it ends, it is still unclear.
But personally, I think it is quite difficult to rely on this flywheel to rise to 8,000 or 10,000. However, Ethereum does have some expectations for fundamental improvement. Currently, it can only be called expectations; Vitalik actually mentioned over a month ago that an important goal for Ethereum this year is to achieve a tenfold expansion in performance, with a clear timeline set for before the end of this year. I believe the overall slump in applications is an issue for all public chains; one company cannot change that. But if it can achieve a tenfold performance expansion, it can at least reclaim some of the market share lost to SOL, BNB Chain, and some high-performance chains, including some market share from Layer 2. It can reclaim some users, trading volume, and developers, which will definitely be beneficial for stabilizing the overall valuation. Based on this point, about a month ago, I switched a portion of my Bitcoin position to Ethereum, but not a significant amount. At that time, I was concerned about the fundamentals, and I did not expect Ethereum to rise. I might have guessed it would rise, but I did not expect it to do so in this manner and for this reason. This is my current view on Ethereum.
Colin: I think Alex's description and research on Ethereum's fundamentals have been shared in great detail. I don't have as detailed an understanding of Ethereum's fundamentals as Alex, but I think there is a perspective worth considering. As Alex just mentioned, companies like SharpLink have been continuously buying; if I remember correctly, their current holdings should be around 300,000 coins. I think this purchasing volume is already quite exaggerated. They keep raising funds, trying to replicate the MicroStrategy model. However, the reason that model has a strong effect on Bitcoin, and more and more companies are trying to emulate MicroStrategy by treating BTC as their corporate reserve, is predicated on the fact that Bitcoin is limited in supply. I think this is very important. Because it is limited. If more companies like MicroStrategy buy and then indicate they will not sell, just hold onto it for a long time until they are forced to sell, this action effectively locks up a portion of the limited supply in the market. For Bitcoin, this is certainly a positive, as the supply decreases, which is naturally good news for the price.
But Ethereum is different. Ethereum has a so-called evaporation mechanism; it has an inflation rate. I think this matter must return to the fundamentals that Alex just mentioned. If today Ethereum does not have a novel or revolutionary application, and if its Gas fee remains at that low level, then Ethereum will continue to increase in quantity. Even if these companies keep buying, they cannot raise an unlimited amount of money to buy all the Ethereum on the market, leading to a situation where Ethereum cannot be purchased. This situation will not happen because Ethereum will continue to increase; it is not like Bitcoin. Therefore, I think the distinction between limited and unlimited supply has a significant difference in effect when these companies are making so-called treasury reserves or strategic reserves.
Returning to the previous question, I think 10,000 is already quite far from the current price. I personally do not tend to call prices because, first, it is too far to see. We are currently around 3,400; to see 10,000, we need a clear valuation model or a clear reason. We at least need to assess the inflow of funds or have data support from some other aspects. But if right now it is purely because of some news, or because everyone is optimistic and buying Ethereum, leading to the possibility of reaching 10,000, I think this cannot be quantified, the basis is insufficient, and it is not very convincing to me. I do not accept the voices in the market calling for 10,000. As long as this asset rises, there will be people calling for higher and higher prices. I think it is important for each market participant to judge Ethereum's rise without being swayed by emotions. Has the existing fact disappeared? Or has something new emerged? This goes back to the fundamentals that Alex mentioned. If its Gas fee remains the same low, does that mean there have not been any revolutionary developments or new inventions on-chain that justify burning more ETH? If not, then this wave of increase is entirely a simple supply-demand principle: more buyers, fewer sellers, and those companies keep buying, especially like SharpLink, which has been buying at an astonishing rate. In just a few weeks, they have already bought 300,000 coins. If the reason for the rise is truly this, then there is no fundamental logic supporting it. We can use a more exaggerated description to say that this might just be a bubble.
Of course, a bubble does not necessarily burst, but it is at least not a completely healthy rise. It is not due to fundamental improvement leading to value enhancement, but rather price enhancement. If the value has not changed, then it is a bubble. The probability of a bubble bursting is always higher than the probability of a healthy rise experiencing a decline. Therefore, I think for us, especially if you have not reduced your Ethereum position, or if you see Ethereum continuously rising with some calling for 8,000 and others for 10,000, you need to be particularly cautious. It is not to say that it will not rise in the future; I also agree that we cannot accurately assess how high it can go. But FOMO or emotions should absolutely not be a reason to buy. I think this is something everyone needs to remind themselves of, including myself. In fact, when I see Ethereum rising, I also feel tempted, but discipline is key. I cannot regret missing out on Ethereum's rise and impulsively buy in. I think all of this is noise and will not increase your trading expected value. I will not make trading decisions based on this emotion.
Alex: Let me add a small point. I actually think it is reasonable for Ethereum to rise to four or five thousand. We know that the previous peak for Ethereum was around 4,600-4,700. If it rises to four or five thousand, it would just return to the previous peak. Bitcoin's previous peak was 69,000, and it has now reached a new high of around 120,000. As we just mentioned, Ethereum's fundamentals in this cycle are inferior to the previous cycle, while Bitcoin's are superior. Therefore, it is reasonable for Bitcoin to reach a new high, and it is also reasonable for Ethereum to be slightly higher than the previous cycle. Because in this cycle, Ethereum has risen from 1,400 to over 3,000, and the larger driving force is not the fundamentals but rather the repair of valuation. The core points behind this valuation repair are: first, institutions represented by SharpLink, which is backed by the founder of Consensus, one of Ethereum's co-founders, have formed a consortium to purchase Ethereum. Another point is that during our internal track meeting this morning, a former colleague mentioned that when SharpLink was first established, its stock price skyrocketed from a few dollars to over 100, then fell back to the 30s or 40s, and eventually back to a few dollars, going up and down in that manner, with a period of consolidation.
However, in late June, they began to raise funds; although the initial amount was not large, only around 20-30 million dollars, the premium was not high, unlike now where they can raise hundreds of millions a week. The breakthrough in this situation was due to a very influential figure on Wall Street, Tom Lee. In June, he became the chairman of Bitmine, an important purchasing company for Ethereum. He has been bullish on Ethereum and has been vocal about it this year. Because he is a prominent figure on Wall Street and serves as the chairman of a company focused on accumulating Ethereum, this symbolic event ignited expectations for the revaluation of Ethereum's value among Wall Street funds and retail investors in the US. As a result, ETH surged from over 1,000 and 2,000 to over 3,000. This is the cause-and-effect background. Without Tom Lee, the flywheel of SharpLink might not have started turning, and its stock price could still be hovering around a few dollars. This rise has many preconditions. Our understanding of this matter can actually help us consider other investment opportunities. Now I see many people talking about how the Ethereum flywheel has started turning, and Bitcoin has also run through, so should we consider laying out other cryptocurrencies' coin-stock flywheels? For example, should we buy SOL? Should we buy hype? Recently, there have been more companies accumulating BNB; are these opportunities? Then we need to see if these tokens have the preconditions for a flywheel to start turning like Ethereum.
I think the first premise has already been mentioned: do these listed companies have the ability to smoothly raise funds in the secondary market, and can they raise tens of millions or even hundreds of millions to buy coins? Currently, companies accumulating SOL or hype are not raising large amounts of money from the market to buy coins. They do not have such strong financing capabilities; they are more likely to rely on private placements or targeted issuances rather than purchasing from the relatively liquid secondary market. The second point is whether these assets have influential figures like Tom Lee on Wall Street to ignite their revaluation. We need to realize that Ethereum dropped from over 1,000 and 2,000 dollars and then rose back. However, tokens like BNB, SOL, and Hype are currently at relatively high price levels and are not in a state of significant decline. Therefore, whether they can surge again at these high price levels is, in my opinion, much more difficult than the valuation repair logic for Ethereum. So when we discuss this issue, we need to specifically analyze whether these assets have the preconditions for the Ethereum flywheel to start turning. We also need to pay attention to the price levels they are currently at, which are different from Ethereum. As you can hear, our judgment on the investment opportunities in derivative coin-stocks is relatively cautious. They may be able to attract some attention that spills over from Ethereum coin-stocks and gain some short-term incremental funds. Thus, we have also seen that companies related to SOL have risen quite a bit in the past few days, gaining several points. But that may be more due to the effect of attention and capital outflow. As for whether these coin-stocks can form a systemic rise like Ethereum, I am personally cautious.
Today, our podcast recording has been quite long, exceeding the topics we originally set, and we have also discussed some situations regarding Ethereum. Thank you to both guest speakers for their sharing today.
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