Whether in the U.S. stock market or the cryptocurrency space, the market structure has shifted from "public growth" to "private development," with capital dividends being front-loaded.

Author: Xiaoshouchuanfeng

Let's discuss why the cryptocurrency space will no longer see the same kind of "copycat season" as before, and how to respond to the future market.

In a nutshell: The cryptocurrency space is increasingly resembling the U.S. stock market, and the current U.S. stock market is not what it used to be.

What was the U.S. stock market like before, and what is it like now?

Before 2010, the typical path of the U.S. stock market was: **Startup - Growth - IPO - Retail Participation in Growth - Long-term *Compounding* (companies buy back their shares through profits, ultimately buying themselves back).**

Duan Yongping has also mentioned: The only true buyer of a company is the company itself, which relies on its profits to eventually buy itself back. However, there are many derivative states, so as long as the company makes money in the end, when it earns enough to be neck-deep, it has no choice but to buy back.

For example, Tesla's IPO price was $17 (June 2010). Considering the 5-for-1 split in August 2020 and the 3-for-1 split in August 2022, the total return today is approximately 354.7 times, in the U.S. stock market, retail investors can participate in the process of a company growing from tens of billions to trillions.

The "Seven Sisters" of the U.S. stock market all conform to this logic ↑ Retail investors only need to focus on understanding the company's business logic and its core culture, then buy in and hold long-term to generally benefit from the era's dividends in the U.S. stock market. Buffett-style success is also a result of the times.

After 2010, the path of the U.S. stock market changed to: Startup - Losing Money - Long-term Financing - Continuing to Lose Money - New High Valuation - IPO as Peak - Capital Recovery Costs, Profits & Retail Investors Taking Over (even if it can eventually break even, it requires first shedding a layer, incurring huge opportunity costs).

After 2010, with the massive increase in VC, PE, and sovereign fund sizes, the phenomenon of "long-term privatization" emerged. For example, leading AI companies today, OpenAI is valued at $500 billion before going public, and Anthropic is valued at $180 billion.

Round after round of financing has allowed companies to reach valuations in the hundreds of billions before going public; by the time they go public, the most "plump" growth space has already been consumed by the primary market, and ordinary investors are left with "being watered down," rather than "making friends with time."

Popular stocks may offer an early FOMO, short-term multi-fold opportunity, but just like new coins on Binance, some may rise for a couple of days after listing, but if you hold on, you are likely to be the one left holding the bag. A typical example is Circle (CRCL), which on its first trading day, the stock price jumped from the issue price of $31.00, opening at about $69, soaring to nearly $300, and then continuously declining, with the current price now at $70, a rollercoaster ride back to the opening price of the first trading day.

The current cryptocurrency space is quite similar; previously, there were many new coins with market caps in the tens of millions, offering numerous opportunities for hundreds or even thousands of times returns. Now, any new coin casually comes with valuations in the hundreds of millions or even billions, and most peak upon listing, with market caps often larger after several years of decline.

Whether in the U.S. stock market or the cryptocurrency space, the market structure has shifted from "public growth" to "private development," with capital dividends being front-loaded. In the current cryptocurrency space, many institutions participating in primary market investments are also starting to incur losses, and the atmosphere within the circle is progressively transmitting, leading to both upstream and downstream markets becoming eager to harvest, not daring to expand their vision. In this context, it has become increasingly difficult for retail investors in the cryptocurrency space to make big money through copycat coins during a copycat season.

Additionally, don't just focus on the U.S. stock index and the Seven Sisters; first, ask how many people have been trapped by CRCL. Since the beginning of this year, more than half of the stocks in the S&P 1500 have declined, resembling the majority of altcoins in the cryptocurrency space.

How to respond:

1. In the cryptocurrency space, large funds can only focus on major coins like BTC, ETH, BNB, XRP, etc. (Criteria: maintaining a top ten market cap through more than three bull and bear cycles), rather than dollar-cost averaging into old altcoins or new altcoins you think have long-term potential in this bull market. Remember, even if this round of new altcoins allows you to achieve financial freedom, the fate of old altcoins will eventually catch up with them.

The same goes for the U.S. stock market; if you can't beat the market, just buy Berkshire Hathaway or the S&P 500 index, or dollar-cost average into the Seven Sisters (Apple, Microsoft, Amazon, Alphabet/Google, Nvidia, Meta, Tesla). Looking long-term, you are basically guaranteed to profit, but making money does not mean you understand it; however, if you do this, it actually indicates that you do understand.

2. For short-term operations, when new coins are launched, regardless of the background, either don't believe or believe early, resolutely do not hold long, do not bottom fish, only participate in the first wave of short-term trading.

No matter how good the fundamentals or story are, do not hold long. Trump Coin and Circle (CRCL) have already taught everyone a good lesson. Don't be afraid of missing out on "the next Nvidia"; the probability is high that you won't hit the next Nvidia, and your principal may already be lost. Moreover, having bought does not mean you can hold; most people would be better off recognizing themselves clearly sooner.

3. Stay away from contracts and leverage, especially in a market like cryptocurrency that is overly centralized and weakly regulated. Retail trading data appears to exchanges and market makers as if they are running naked; in a situation of severe information asymmetry, you may win in the short term, but you will inevitably lose in the long term.

(The results of the trading competition organized by Synthetix have come out recently, inviting many top traders in the industry; you can search for the specific results yourself.)

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