Why is this cycle so difficult, what should I do?

Author:Aylo

Compilation: Deepflow Techflow

First of all, this round of cycle is really difficult, don't let anyone pretend to tell you that it is not difficult.

But the reality is that each round of cycles is harder than the previous round. You are competing with a larger participant Chi Zi, more and more participants have become older, and there are more losers.

If you do not hold most of your positions in the bear market, you may not make money, and you may even tear your hair.

If I do not use SOL as the dependency unit, I will struggle myself. Yes, we do have some big individual winners, but I guess that if you speculate on these assets, you may eventually return part of or even a large part of the benefits. Especially because people do not retreat after a victory.

They would say "there is still time" and then think that they can continue to rise, which is how they return the income back. The truth of "playing stupid games, winning stupid prizes" will never fail. Sometimes this situation is only staged to traders and gamblers within a longer period of time.

So why is this cycle so difficult?

PTSD (post -trauma stress disorder)

We have two examples that most of the tokens have fallen by 90-95%in the large cottage cycle. Coupled with the collapse of LUNA and FTX, this has led to the chain response of the entire industry, and the asset prices may fall lower than the original.

Many big players have been swept out of the ground, and we have not seen the return of the cryptocurrency lending platform in this round of this cycle. This PTSD deeply affected the encrypted aboriginal people. In particular, the transaction method of the cottage market is mainly because "everything is a scam" has become the mainstream view of this cycle.

In the first two rounds, the belief of "this technology is the future" is even more common, but now this has become a minority point of view, or it is tied with "everything is a scam." No one wants to hold anything for a long time because they don't want to lose most of their investment portfolios again.

This creates a "maximum Jeet cycle". This emotion is also amplified on Crypto Twitter, because the participants are constantly looking for the top of the cycle.

This psychological effect is not limited to trading behaviors -it also affects the attitude of the entire ecosystem on the construction and investment. The project is now facing higher review standards, and the threshold for trust has also increased. There are both positive and negative sides: Although it helps to filter out obvious scams, it also makes it more difficult for legal projects to get attention.

Innovation

Although innovation is still continuing and infrastructure is constantly improving, it is no longer as dazzling as DEFI's 0 to 1 breakthrough.

This makes the arguments such as "cryptocurrencies have not made progress" and other arguments are more easily accepted, and it has also led to more narratives of "cryptocurrencies".

The pattern of innovation has shifted from revolutionary breakthrough to gradual improvement. Although this is the natural evolution of any technological development, it challenges the market -driven market.

We still lack breakthrough applications, and these applications are necessary to bring cryptocurrencies into hundreds of millions of chains.

Supervise

The corrupt US Securities and Exchange Commission (SEC) caused confusion. They have hindered the advancement of the industry and prevented some areas (such as DEFI) that can gain product market fit (PMF) in a wider range of audiences.

They also prevented all the value of governing tokens to the holders, so they created "all these tokens are useless" narrative, which is the fact to some extent. SEC drove away the developer (see Andre Cronje's description of SEC for his exit), preventing traditional finance (Tradfi) interacting with the industry, and eventually forcing the industry to raise funds to venture capital companies. This has led to a bad supply and price discovery, and the value has been captured by a few people.

However, now we have seen some positive changes, such as Echo, Legion and more public sales.

Financial nihilism

All the above factors have led to financial nihilism as an important factor in this cycle.

The high FDV (completely diluted valuation) and low circulation dynamics caused by "useless governance tokens" and SEC pushed many encrypted aborigines to Memecoin to seek "more fair" opportunities. It is true that in today's society, due to the soaring asset prices and the endless depreciation of wages without the fiat currency, young people have to improve their status through gambling, so the Memecoin lottery is very attractive. The reason why the lottery is attractive is because it provides hope.

Because gambling has a product market compliance (PMF) in cryptocurrencies, and we have gained better technology (such as Solana and Pump.fun, etc.), the number of tokens issued has increased. This is because many people want super high risk gambling, and there is supply if there is demand.

The "Trenches" has always been part of cryptocurrencies, but in this round of cycle, it has become a well -known term. This nihilism attitude is manifested in many ways:

• The rise of "Degen" culture and become the mainstream

• Short investment time cycle

• Pay more attention to short -term transactions rather than long -term investment

• 极端杠杆和冒险行为的正常化

• 对基本面分析的“无所谓”态度

前几轮周期的经验成了障碍

过去的几轮周期教会了人们可以在熊市中购买一些山寨币，最终通过跑赢BTC 获得回报。

几乎没有人是好的交易者，因此过去这是大多数人最好的路径。总体而言，即使是最差的山寨币也有机会。

But this round of cycle is the market of traders, which is more suitable for sellers rather than holders. Traders even obtained the biggest income of this cycle through Hype airdrop. The narrative duration of this cycle is not long, and there are very few convincing narratives. There are more sophisticated participants in the market. They are better at extracting value, so the mini cottage bubble is not particularly large.

The first speculation cycle of the AI ​​agent is an example. This may be the first time that people have felt "this is a new thing we have been looking for." But this is still the early stage, and the long -term winner may not have appeared.

Bitcoin has new buyers, and most of the cottage coins are not

The differentiation between Bitcoin and other assets has never been so obvious. Bitcoin has unlocked the needs of traditional finance. For the first time, it has an incredible source of passive demand, and even the central bank has discussed it to add it to the balance sheet.

Congzhan coins are more difficult to compete with Bitcoin, which is reasonable because Bitcoin has a very clear goal -the market value of gold.

There are really no new buyers in the cottage. Some retail investors returned when Bitcoin reached a new high (but they bought XRP 💀), but in general, the inflow of new retail investments was insufficient, and cryptocurrencies were still poor.

The change of the role of Ethereum

比特币主导地位下降很大程度上是因为以太坊市值的增长。 Many people have risen in Taigo as the trigger point of the "cottage season", but in this round of cycles, the law of experience has not worked, because Ethereum performs poorly due to fundamental reasons.

许多交易者和投资者难以接受以太坊未能推动更高的风险偏好，实际上，它持续扮演结束迷你山寨季的角色，这与过去的情况相反。

Although there is evidence that some narratives and sectors can run without Ethereum, many traders still believe that Ethereum needs to rise to usher in the real cottage season.

What should I do?

So, what should you do from here?

努力工作，或者更聪明地工作。 I still believe that in the long run, fundamentals will always work, but you must really understand the projects you support and how they actually win Bitcoin.目前只有少数候选者符合这一条件。

Find a project with the following characteristics:

• 明确的收入模式

• Actual product market fit

• Sustainable token economics

• A strong narrative that can supplement the fundamentals (I think AI and RWA are in line with this)

In my opinion, due to the unlocking of the United States, those projects with stronger fundamentals and product market fit (PMF) finally can finally make their token accumulation, and these projects have also become lower risk choices. Those agreements that can generate income are now ready to perform well. This has a significant change in the "Greater Fool Theory", which has dominated many token models before.

If your strategy is "waiting for retail investors to sell after entering the market", then I think you will encounter great trouble. The market has surpassed the cycle of simplicity driven by retail investors, and sophisticated participants are likely to be the first to be the first to be in this obvious strategy.

You can choose to be a better trader, try to cultivate your own advantages and focus on more short -term transactions, because this market does provide many consistent short -term opportunities. The trading on the chain may bring a larger multiples, but it will be even more ruthless when falling.

For most people who do not have a clear advantage, the "barbell -type investment portfolio" is still the best choice. 70-80% of funds are allocated to BTC and SOL, and then a smaller proportion is left for more speculative investment. Regularly balance to maintain these proportions.

You need to understand how much time you can invest in the cryptocurrency field and adjust your strategy based on this.

If you are an ordinary person with normal work, compete with young people sitting there for 16 hours a day . Passive holding of a copycat coin and waiting for your turn will not work in this cycle.

Another strategy is to try to combine different fields. Establish an investment portfolio based on stable assets, and then find some opportunities such as airdrop mining (more difficult now, but still low risk opportunities), or identify some new ecosystems that are rising , Movement, Berachain, etc.), or focus on a specific field.

I still believe that the alturge market will grow this year.条件已经具备，我们仍然与全球流动性相关，但能显著跑赢BTC 和SOL 的将仅限于少数几个板块和更少数量的山寨币。 Fast cottage currency wheels will continue.

如果我们遇到一些疯狂的货币印钞，也许会看到更接近以往传统山寨币季的情况，但我认为这种可能性低于我们希望的可能性。 Even in this case, most of the cottage coins will only provide average market return. This year we still have many important cottage coins are about to be launched, and the liquidity will continue to be diluted.

This is not easy, but I will give you some hope: I have never seen a person who has been seriously invested in the cryptocurrency field for many years and has not earned a considerable money.

There are still many opportunities for this asset category, and there are many reasons to be optimistic about its growth.

In the end, I don't know more than others. I just adapt to the situation I see in this round of cycle.

In addition, I want to add a little: we are not early in the cycle. This is clear. The bull market has lasted for a long time, and this fact will not change whether you make money or not.

"Control the downlink risk, and the upward income will naturally take care of yourself."

This famous saying will always be truth.