Coin World News Report:
Author: Mu Mu, Plain Blockchain
Recently, the cryptocurrency market has been unpredictable, and many people have started to believe that this is a strange bull market, where no one is making money. Many people even complain that this is the most difficult bull market to make money in Bitcoin history!
As a result, those who have always followed the mindset of “when the market is good, everything looks like the future, and when the market is bad, everything looks like junk” began to doubt their lives and the value of the entire cryptocurrency industry. They believe that the bull market is about to end…
01
It has always been difficult to make money in a bull market
Although this bull market is strange, after experiencing so many bull markets, it should no longer be surprising. This point was analyzed in the previous article “The Logic of the Bitcoin Bull Market has Quietly Changed, Many People Still Can’t Make Money?”
In fact, it is not that it is not profitable in this bull market, but that it is not easy to make money in any bull market. You should know that most of the people who made money in the past few rounds did not enter the market during the bull market. Only those who came in later realized that they were providing money for others to make. Those who can survive the bull and bear markets without any damage are the real winners.
In the years of Bitcoin and the cryptocurrency market’s ups and downs, many famous gold diggers have emerged, including Wall Street genius trader SBF and “Korean Musk” Do Kwon, etc., have all failed in the cryptocurrency market. The lessons learned from them are very simple: in addition to being impatient and not fearing risks, the most important point is the wrong “cryptocurrency value system.”
All along, many traders, including SBF, have claimed to be “smart people” entering the cryptocurrency market, not because they recognized the value brought by Bitcoin and cryptocurrency assets, but because they believed that there were many “fools” in this market who bought Bitcoin at low prices. They thought they could sell it to these fools. However, what they didn’t expect was that in this highly free market, they could never escape the fate of “big fish eat small fish.”
In any industry, those who enter with the mentality of “cutting leeks” without pursuing the correct industry values, without recognizing the industry’s value, are destined to not do well in this business. Even if they taste the sweetness at the beginning, they will soon be counterattacked by the market.
Perhaps many people have forgotten what the original intention of Bitcoin and the cryptocurrency industry is, and the distorted values may result in serious judgment errors.
02
What went wrong with value projects?
In this bull market, it is obvious that many “value projects” that have been highly sought after by VCs and the old-established cryptocurrency value projects that have been built in the cryptocurrency market, such as Ethereum, Layer2, Metaverse, and DeFi, seem to have not gained market recognition as people expected. Instead, people seem to be more willing to participate in NFTs and Memes. This makes people reflect on what went wrong with so many years of “cryptocurrency value projects”.
Actually, we cannot blame the market for not accepting “value projects”, but the “value projects” themselves have indeed encountered problems!
Recently, we have observed that the Ethereum GAS price has even dropped to 1, and some Layer2, Metaverse, DeFi projects with low daily active users, as well as newly listed VC projects, have skyrocketing market capitalizations even before they have made any progress. With such poor data and such high market capitalizations, it gives people a strong sense of highly overvalued bubbles. Of course, no one would like to foolishly buy in. It is better to directly invest in Memes with low market capitalizations and reject all kinds of PUA.
All along, many people have focused too much on the surface and ignored the underlying reasons. In fact, it is not that value projects have lost their value. The valuation of many value projects is not only measured by the number of active users because they carry tens of billions or even hundreds of billions of TVL, and these amounts of funds cannot be ignored.
Of course, the most important point is that the prevailing “farming” movement in recent years has not only bred a large number of false users but also made it difficult for new VC projects to be valued and difficult to focus on their work. This has developed into a problem for the entire Web3 industry, as a large amount of false traffic and users have to some extent hijacked these projects.
There are even some organizations that customize highly tailored projects to deceive VCs, create seemingly star-studded teams on the surface, and create “value projects” for the “farming” people. Nobody cares about technology, nobody cares about whether it solves real needs and problems. Such value-oriented abnormal VC projects can be imagined to end up with a bleak outcome.
Therefore, people have found that impurities have been mixed into both new and old “value projects”. Even a small mouse droppings can ruin a pot of porridge, not to mention that this is a common phenomenon… So since it is difficult to determine whether there is value, not participating becomes the best strategy.
Of course, even so, we cannot completely deny the majority of projects that adhere to the original values of cryptocurrency. Bitcoin has brought transparency and self-custody of assets, realizing the sanctity and inviolability of personal property. Ethereum, including Layer2 and other smart contract platforms, has brought a “trusted” operating environment for Internet applications, pushing the Internet from online to on-chain. After going through the baptism, I believe they can still stand tall in the continuous self-“rectification” of the cryptocurrency market.
03
The logic of the bull market has changed, but it hasn’t changed
The logic of the bull market has not really changed, even though people say it has changed.
All along, most altcoins have just been recipients of Bitcoin’s value overflow after it reaches a high price. It is difficult for many new narratives and low-market-cap altcoins to rise when the price of Bitcoin enters the high range. People find that many low-market-cap altcoins with new narratives seem to be “value pockets”. Therefore, driven by FOMO sentiment, some capital chooses to rush into these peripheral altcoins “small reservoirs”. Since the pool is small, a small amount of capital can achieve several times or even dozens of times in gains. People gradually realize this logic of the bull market.
However, this year, in addition to various new and old altcoins with different concepts, Meme projects have blossomed everywhere. The market has discovered that FOMO sentiment can also be collected and contained. Since FOMO sentiment can be directly embodied in Memes, why waste energy on altcoins that are full of “mouse droppings” and are prepared for retail investors everywhere? As a result, Memes have directly diverted the funds that should have flowed into altcoins, and the logic of the bull market has changed, but it has not changed. It’s just that a circle of Meme pools has appeared next to the altcoin pool to intercept the overflow funds from Bitcoin.
04
Has the bull market really ended? Most people may have lost their direction
Many people are entangled and contradictory about whether the bull market has ended, whether there is still an altcoin bull, etc. However, what I want to say is, since we have known for a long time that for most people, “bull markets don’t necessarily make money, and bear markets don’t necessarily lose money,” then why do we care so much about whether it’s a bull market or not?
Taking history as a reference, let’s take a look at the price trend chart of gold in the past 100 years. You will find that Bitcoin, this digital gold, and gold have many similarities in their price trends, except for some attributes that are similar. If the timeline is extended:
1) Regardless of whether it is a bull or bear market, the early price trends have almost become a straight line.
2) Prices fluctuate, have cycles, and always maintain a long-term upward spiral channel.
Therefore, we can easily draw a highly probable conclusion that, like gold, the best long-term strategy for Bitcoin is to buy on dips within 100 years.
The trend of gold is positively correlated with the scale of US government debt
Represented by the United States, the world has long entered the path of creating huge debts through currency creation, and the method of resolving the constantly rising debt can only be to print more money…
05
Conclusion
Recently, factors such as the debt liquidation in Mentougou and government sell-offs have brought significant negative impacts to the market. But the good side is that these “swords of Damocles” hanging over the cryptocurrency market have also disappeared. If we extend the timeline, the bull will always be there, so there is no need to worry. Just quietly embrace the original intention of cryptocurrency and patiently welcome the new era.
