We may be standing at the threshold of an era where valuation models are completely ineffective!

Andrew Kang @Rewkang, co-founder of Mechanism Capital, presents a very radical but serious judgment in this article:

We are in one of the most extreme asymmetric moments in history.

The only correct strategy now is to extend the time perspective and completely abandon short-termism.

The reason worth reading this article is that it does not discuss a specific asset but redefines how the world changes in the AI era and the changes in the investment paradigm itself from a higher dimension.

1️⃣ He believes: We are currently in an extremely asymmetric moment:

The so-called "asymmetry" does not refer to high risk and high return, but rather:

The upside potential far exceeds the downside risk, and the two are not on the same scale.

The downside is limited, while the upside may grow exponentially.

This means that operating with traditional "volatility control" and swing trading thinking may actually cause one to miss the most core sources of returns.

2️⃣ The change is not in the results, but in "time density"!

The time density of technological progress has undergone a structural change: the number of technological breakthroughs per unit of time × the speed of maturity is experiencing a structural leap.

Moreover, this leap is not a single point but involves multiple main lines accelerating in parallel: simultaneously accelerating in AI / robotics / energy / healthcare, and other main lines.

This is a change in the production function itself, not a cyclical fluctuation.

3️⃣ In the next 3–10 years, historical distributions may become ineffective.

He refers to the fact that historical experience, mean reversion, and valuation anchors will all become ineffective; the statistical tools we use to understand the world are becoming obsolete.

The world has entered a new range that old models cannot explain.

4️⃣ The expectation gap between trading and investing will widen sharply.

In this context, his conclusion is very clear: short-term volatility will certainly exist, corrections will certainly happen, but in the face of exponential trends, these are more noise.

Therefore, the expectation gap between trading and long-term investing will be greater than at any stage in history. In other words, using trading to counteract exponential trends is inherently a negative expectation endeavor.

In summary, Andrew Kang believes:

In the era of exponential growth, the real risk is not volatility, but that you are still using linear world methods to understand a civilization that has already begun to grow out of control.

However, there are several premises for his predictions:

1) Premise A: Technological diffusion is not a single point but systemic;

2) Premise B: The capital system will not obstruct this diffusion;

3) Premise C: You can "survive" and "hold on";

So I actually cannot know what is right under the rapidly advancing AI, but I think I can say what constitutes "wrong operations" under this logic:

1️⃣ Treating BTC as a short-term trading target;

2️⃣ Using "previous cycle valuations" to understand AI × Crypto;

3️⃣ Frequent rebalancing and constant timing.

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