Today, there have been several visible changes in the industry:
(1) The number of arbitrage and scalping traders has increased significantly. Previously, people could only trade coins in the secondary market, but now about 1/5 of users have shifted towards arbitrage and scalping in the semi-secondary market. These traders have a characteristic of being reluctant to buy coins in the secondary market. They prefer scalping, staking, donating, and pledging, but they avoid buying. With this increase in proportion, the number of coin buyers in the secondary market has decreased significantly, while the number of low-cost sellers has increased.
(2) The hotspots have become more scattered. Restake, staking, NFTs, the Solana ecosystem, modularization, and layer 2 networks. This bull market is different from before because there is no single hotspot that everyone participates in. The funds and users are not working together but rather playing individually and in a disorderly manner. This is due to the development of the industry, which has become large and wide, making it nearly impossible for one person to fully explore the entire industry. Additionally, the industry lacks truly imaginative transformative products. Instead, it focuses more on incremental innovations based on previous innovations.
(3) The market value of many projects has been prematurely exhausted. Now, everyone has their own judgment on what projects are good and what projects are just hype, making it difficult to find something good and cheap. For example, Ethereum’s two layer 2 networks, Optimism and Arbitrum, have reached their peak, but their current prices are similar to or even lower than when they were first launched 1-2 years ago. Good things are not cheap, and making money from good things has become a separate matter.
(4) Funds have not flowed into the cryptocurrency market. Institutional investors in the past understood Bitcoin and Ethereum and actively invested in various innovative coins. However, this time is different. After the introduction of ETFs, the funds invested in Bitcoin are not directly circulating on the blockchain but are staying in other markets thousands of miles away. These funds are only circulating within the Bitcoin market and have little interest in innovative coins or investments outside of Bitcoin. In other words, the institutions that entered in the previous rounds understood the industry and invested in the industry, while many of the new institutions in this round are only interested in Bitcoin as a hedge. Therefore, whether Ethereum can successfully pass the ETF is quite important as it will determine whether it can attract a large amount of new capital for investment. Without the ETF, it won’t be easy to significantly increase Ethereum’s market value and price with the existing institutions in the market.
(5) Intense competition. The competition has intensified in two aspects. First, there are a large number of new competitors, and second, these new competitors are very strong. As soon as there are signs of on-chain derivatives and restaking, a large number of competitors swarm in. This year, there have been many situations that go against previous experiences. The playing field is expanding, but the market share of early advantage players is shrinking. This is happening in every field, not just derivatives. The result of this change is that buying and holding the top player does not guarantee a significant price increase because market share and imagination have not increased accordingly. In fact, under the pressure of some new competitors, the top player’s position may become precarious.
This change in the industry has come faster than I expected, happening at a cycle earlier than I anticipated. I originally thought we would have to wait for this cycle to pass before it truly arrived, but it turns out we are already in this moment.
While we look up at the stars, we must also remain grounded; while we hold onto our dreams, we must also respect reality.
In this new development cycle, transitioning from a period of dividends to stable development, it will test our wisdom. If we handle and adjust well, we can continue to grow our wealth during the dividend period, although it may slow down. If we continue to use old logic to handle future investments and speculation, we may gradually lose our profits and experience a wealth daydream that lasts for many years.
The adjustment I have made for myself in this bull market is to lower my expectations and increase the proportion of reducing positions after six months.
Tags:
MEME
SOL
Solana
Ethereum
Bitcoin
Bull market
Source Link:
https://twitter.com/sdcrypto123/status/1782692111940542512
Disclaimer: The opinions expressed in the tweet are solely those of the author and do not constitute investment advice.
Original Article Link:
https://www.bitpush.news/articles/6638432
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