Source: Talking about Li and other things
One of the hot topics these days is probably Ghibli. The reason is that two days ago (March 25), ChatGPT announced a 4o mapping function. In the GPT-4o dialog box, you can directly use the image generation function, that is, you can upload a picture and enter a simple command (such as inputting to turn this picture into a Ghibli cartoon style), and then GPT can generate a new picture based on the original picture and the command. As shown in the figure below.
The Ghibli style refers to the unique visual style of animation works created by the famous Japanese animation studio Studio Ghibli. Well-known works from Studio Ghibli include "Spirited Away" and "My Neighbor Totoro".
Originally, this was just an update of ChatGPT, but as some bigwigs shared their Ghibli-style pictures through social platforms, for example, the picture below is a Ghibli-style picture shared by Musk in X on March 27.
As a result, with the help of the big guys, the popularity of Ghibli soared, and then the Ghibli token of the same name appeared. As the topic and popularity continued to rise, and with the continuous shouting of some KOLs, the Ghibli token (Solana chain) increased by hundreds of times in less than a day. Today (March 28), two Ghibli tokens (Solana chain and BSC chain) were directly launched on BA (here refers to Binance, the same below) Alpha. As shown in the figure below.
Of course, it is not recommended to chase high prices now. Those who are interested can search for more about Ghibli’s story. We will not talk too much about MemeCoin here.
1. Is high-frequency listing of coins a way to save ourselves or the market?
Another thing that has attracted much attention today is that BA listed a lot of MemeCoins at one time, as shown in the figure below.
I remember that in an earlier article, we also expressed a point of view: screening projects that have the opportunity to be listed on BA is a potential opportunity to obtain better returns.
However, after the changes in this cycle, the previous method of selecting projects seems to have gradually become inapplicable, because the listing effect of BA has disappeared. Even if you buy projects listed on BA in advance, it does not mean that you can make money. On the contrary, you may be trapped. In the past, the listing of projects on BA could bring wealth effects, but now, listing means more of a harvest feast for retail investors.
Gradually, more and more voices of doubt against BA appeared... BA seemed to have become the cancer of the industry and an accomplice of the project party in cutting leeks in the eyes of some people.
Perhaps the CZ system has also begun to realize this problem. Therefore, in recent times, we can see that BA has started a series of frequent actions, such as frequently creating topics and shouting orders in the X platform, taking action against some market makers (killing the monkey to scare the chickens), activities targeting wallets (frequently conducting TGE to give users pork trotters), integrating Alpha with CEX, and so on.
At present, BA seems to be making a big gamble, trying to let the market decide the life and death of the project through massive listing of coins (or high-frequency listing of coins), including voting to delist coins (delisting tokens). It seems that some rules of the traditional bull market have changed. If there is a problem with the so-called DEX, it can directly turn itself into a CEX (Hyperliquid delisting JELLY tokens), and the largest CEX in the universe is trying to use some DEX methods to break itself out, but the current result is: DEX and CEX count a lot of money, and then say to users with a smile, dear, I have reshuffled the cards, let's see who runs faster, are you ready?
2.What are the core factors affecting prices?
In the last article (March 26), we mainly thought about the uncertainty and opportunities in the market. Some of the views we expressed were still optimistic overall. Then some friends read the article (or maybe didn’t read it) and left a message in the background asking: Is the market going to rise? What coins can I buy now?
I don’t know how this guy did his reading comprehension. He was able to ask two very difficult questions in a row.
Another friend left a message saying: The indicators you posted are all good. I have also seen the TOTAL2 indicator you shared before. I agree with you. I also think that altcoins will continue to rise in the future. The altcoin season is coming.
These messages left me stunned. What did I say?
We have always said that the market cannot be accurately predicted. Any so-called prediction behavior is just a guess by people, or a probabilistic conclusion based on certain dimensions. If you only read the title of an article, or a short paragraph of the blogger's own speculative remarks in a long article, and directly draw a 100% certain answer, then this itself may be a dangerous signal for investment.
Let’s take the TOTAL2 indicator mentioned by the friend above. Most people know that this is the sum of the market values of all tokens except BTC (but excluding most tokens on the chain, which we have explained in the article on February 3). From the weekly level of this indicator, there are indeed signs of continued rise in the past three weeks (from a market value of US$768.2 billion three weeks ago to the current market value of US$806.7 billion), but this does not mean that altcoins will continue to rise, because compared to changes in the overall market value, we should pay more attention to changes in market liquidity, and liquidity is the essence.
Another important point is that for a specific project, the market value is the result of multiplying the token price by the supply (Supply), which means that the token price is not proportional to the market value. It does not mean that the token price will definitely rise if the market value increases. Let's take the simplest example: Take Arbitrum (ARB) as an example. On January 12, 2024, the price of ARB token was $2.3 and the market value at that time was $2.89 billion. On December 7, 2024, the market value of ARB token was $4.82 billion, but the price of ARB was $1.1.
Therefore, although TOTAL2 is often used as a price indicator, its role is more to reflect the overall market sentiment. The specific price is more determined by the supply and demand relationship of the corresponding token. In plain words, only buyers and sellers can determine the price of tokens, not the market value of the tokens.
Let's take another simple example: the market value of Ghibli (Ghiblification) we mentioned above is currently $32 million and the price is $0.03. So, if Ghibli wants to rise to $0.06, does it mean that people need to buy another $32 million to achieve this goal?
The answer is of course no.
The core reason here is the liquidity we mentioned above. Liquidity can be simply understood as the actual amount of funds in a trading pool, that is, the liquidity funds that can generate or complete orders in real time. It indicates how many corresponding tokens people can buy or sell.
That is, if the price of Ghibli doubles from $0.03 to $0.06, the amount of money required will be much less. Currently, the Pump pool of Ghibli is about $970,000, as shown in the figure below, which means that you may only need to spend about $500,000 (or even less) to buy Ghibli to raise its price to $0.06 and its market value to $64 million.
Of course, there is also the issue of trading volume. For example, as shown in the above picture, Ghibli’s 24-hour trading volume is 5.5 million US dollars. This trading volume is more indicative of the trading activity or turnover frequency. A large trading volume does not mean that it will directly raise the price of the token.
To sum up, most people may pay more attention to market capitalization (including trading volume), but in terms of factors affecting prices, liquidity may be more important, especially for tokens with low liquidity. Don’t be misled by their high market capitalization or high trading volume, because their prices can easily be manipulated by whales (big players or project parties).
3. Let’s talk briefly about Pendle and related topics
In the previous article (March 26), we mentioned Pendle, and then some friends continued to leave comments asking: Why do you care about Pendle? Can I still buy this coin now?
As for why we pay attention to Pendle, this is actually not a problem, because if you have been following Hualihuawai for a long time, you will know that we have paid attention to many projects before, and we have mentioned the Pendle project many times in our historical articles, as shown in the figure below.
As for whether the Pendle coin can still be bought now, I cannot provide specific buying and selling advice (no specific buying and selling guidance at the transaction level). If you have the urge to participate in the Pendle transaction, then one of the simplest ways is to refer to the ideas in our article last year (November 12, 2024) to do some necessary research and then decide whether to participate. In that article, we took AAVE as an example and listed several simple ideas and methods for quickly selecting projects. As shown in the figure below.
In fact, leaving aside the price factor, I have always believed that projects such as Pendle and AAVE belong to the category of good projects, because they can generate sustainable income on their own and maintain relatively active construction, rather than projects that rely solely on hype to maintain operation (such as most MemeCoins).
As for the current market development trend, or the hot topics that everyone is paying attention to, they can be roughly divided into two types:
One is the ultra-short-term narrative, such as the speedrunning projects like Ghibli we mentioned above.
One is the medium- to long-term narrative, such as DeFi, Stablecoin and RWA mentioned in our article two weeks ago, as shown in the figure below.
So, why do we recommend that you pay more attention to opportunities in DeFi and RWA? In fact, there is a major supporting logic here, which is Stablecoins.
Many people are paying attention to the price changes of a specific token or tokens, but if we think about it carefully, we can find that there is another difference in this cycle: we seem to be experiencing a Stablecoins Bull. According to the latest on-chain data, the current scale of stablecoins has reached 234 billion US dollars. It has been developing rapidly since October last year and continues to refresh historical records. As shown in the figure below.
Currently, Stablecoins is a very large industry, not only in the crypto market, but even many indescribable industries are using Stablecoins for settlement.
I don’t know how many people still remember the White House Crypto Summit some time ago (March 8). Although the results of this meeting disappointed the market, we cannot ignore an important message revealed by Trump at the meeting: Trump hopes to sign stablecoin legislation before August.
In fact, the US government has been calling for a strategic reserve of cryptocurrencies on the surface, but one of the things they want to do more may be stablecoins. To put it bluntly, the United States is actively promoting stablecoin legislation, and essentially hopes to use it to continue to expand the dollar's dominance in the world.
Recently, we have also found through some news that some American institutions are actively promoting their own stablecoin strategies, such as: Fidelity Investments is planning to launch its own stablecoin, Wyoming plans to launch a stablecoin called WYST in July this year, and World Liberty Financial, supported by the Trump family, will launch a stablecoin USD1...
It can be foreseen that if friendly legislation on stablecoins is implemented in the United States in the future, it will inevitably further promote the global adoption of stablecoins, and the US dollar can continue to become the world's universal currency in new fields.
If this is the case, then under this premise, what chances do we have?
There are roughly the following possibilities:
The first is to participate in the affiliated institutions or projects that issue stablecoins.
For example, we all know that USDC is issued by Circle, a company jointly established by Coinbase and other companies. Although we as individual investors cannot directly participate in Circle, if we look at it from another perspective, indirectly investing in Coinbase's stocks seems to be a theoretically feasible method.
For example, there are stablecoins such as USDE and DAI. We can also participate indirectly by investing in Ethena and MakerDAO (MakerDAO was renamed Sky last year, and Dai was renamed USDS) tokens.
The second is to participate in on-chain projects such as DeFi and RWA.
For example, AAVE is more representative in the lending field, Pendle is more representative in the yield field, and so on. A large proportion of the TVL of such DeFi protocols is composed of stablecoins, and TVL is one of the important reference indicators for measuring the development of a DeFi project (in other words, as stablecoins increase, the TVL of the protocol will increase, and this will continue to prompt the protocol to generate more Fees and Revenue, that is, income and benefits, which is a positive cycle).
That is to say, if stablecoins continue to thrive, protocols such as AAVE and Pendle will also benefit and may be reflected in token prices to some extent.
Similarly, RWA is also an area that some institutions are actively deploying. Stablecoins are also an important component of the current RWA category (other components are U.S. Treasury bonds, private credit, real estate, etc.)
Of course, all of the things we mentioned above are definitely risky. For example, the stock prices of COIN and other stocks will fluctuate due to other factors such as company performance and macro conditions, and the same is true for tokens such as MKR and AAVE. Don’t make large investments (or even speculation) in related projects just because of the trend of stablecoins. Before making any decision, do more comprehensive research and investigation.