Counting 5 visible changes in the crypto industry

Author: Sandao Source: X, @sdcrypto123

Today's industry has undergone the following visible changes:

(1) The number of people who engage in arbitrage and profiteering has greatly increased. In the past, everyone could only hold their own coins and speculate on them in the secondary market, but now about 1/5 of the users have switched to arbitrage and profiteering in the semi-primary market. This group of people has a characteristic that they are relatively averse to buying coins in the secondary market. They can profiteer, fight (inscriptions), donate (memes), and pledge, but they just don't buy. If this ratio increases accordingly, it means that there will be fewer people buying coins in the secondary market, and more people who want to unload coins at low cost.

(2) Hotspots are scattered

Restake, inscriptions, NFT, Solana ecology, modularization, and second-layer networks. This bull market does not have a hotspot that everyone participates in, which is very different from the past. Funds and users have no joint efforts at all. Everyone plays their own games, and there is no order. The reasons for this are, firstly, the development of the industry. The industry has become so large and wide that it is basically impossible for one person to play all the games in the industry.

Secondly, the industry lacks revolutionary products that can really arouse imagination again. It is more of an improved bull market (micro-innovation based on previous innovations).

(3) The market value of too many projects has been overdrawn in advance

Now everyone has their own judgment on which projects are good and which projects are bragging. It is difficult to buy good and cheap things. For example, Ethereum's two second-layer networks, OP and ARB, have reached their peak since their debut. The current price is basically the same as when they were first launched 1-2 years ago. In fact, ARB is even lower than the price when it was launched.

Good things are not cheap, and good things and making money are two different things

(4) Funds have not flowed into the cryptocurrency circle. In the past, investment institutions in the industry were all knowledgeable people. In addition to understanding BTC, they also understood Ethereum. In addition to understanding Ethereum, they would also actively invest in various innovative coins.

But this time is different. After the ETF, the funds invested in BTC did not directly circulate on the chain, but stayed in other markets thousands of miles away. This money only circulated on BTC, and had basically no interest in innovative coins or investments outside of BTC.

It can be said that the institutions that entered the last two rounds all understood the industry and brought money to invest in the industry, while many of the new institutions in this round are only interested in BTC (as a hedge configuration).

So whether Ethereum can successfully pass the ETF this year is actually very important, which determines whether it can have a large amount of new funds to invest in it. If there is no ETF, it is really not that easy to rely on the existing institutions in the market to violently push the market value and unit price of Ethereum

(5) Extremely intensified competition

The intensified competition is manifested in two aspects: one is that there are a lot of new competitors, and the other is that the strength of new competitors is very strong. In 2023, when the on-chain derivatives and restake just showed signs, a lot of competitors swarmed in. This year, many situations that go against past experience have occurred: the track is getting bigger, but the share of early players with advantages is shrinking. This situation can be said to have occurred in every track at the same time, not just derivatives. The result of this change is: buying the big boss and holding the big boss, but the price may not necessarily rise smoothly and significantly, because the market share and imagination have not risen accordingly, and it is even possible that the position has become shaky under the pressure of some new competitors.

This change in the industry is one cycle faster than I expected. I originally thought that it would not really come until this cycle is over, but I didn’t expect that we are already at this moment.

Look up at the stars, but also be down-to-earth; have dreams, but also respect reality.

In such a new development cycle (transition from the bonus period to the stable development period), each party needs to test their wisdom. If it is handled well and adjusted well, the wealth of the bonus period can continue to grow smoothly (but it will become slower); if it is not handled well, or the old logic is still used to deal with future investment and speculation, it may gradually give up profits and have a wealth daydream that has lasted for many years.

The adjustment I made to myself in this bull market is: after half a year, I will try to lower my expectations and increase the proportion of reducing my positions