In the past year, I have invested a lot of energy into the colorful world of cryptocurrency and have achieved certain asset returns. However, deep down, I always have a question: what exactly supports the cryptocurrency industry to get to where it is now?
Today, Bitcoin is no longer the obscure niche investment it once was. Professor Lang Xianping's meme of 'I wouldn't want it even if you gave it to me' is widely circulated in various Web3 groups, and last year's news of Bitcoin breaking $100,000 exploded on social media. With Trump back in power, the cryptocurrency industry seems to be back in the spotlight, but behind this bustle, I am increasingly confused: where is its actual application?
The cryptocurrency industry appears glamorous, but actual practical applications remain scarce. Although there is the narrative of Bitcoin as digital gold, with its market value squeezing into the top ten global assets and ETFs pushing institutional entry, its core function still relies on value storage, and the penetration rate in payment scenarios is insufficient.
The so-called GameFi is expected to become the next gaming era, yet 99% of the projects merely replicate Web2 functions with poor user experiences. Nowadays, it only attracts those looking to make a quick profit. Currently, GameFi and most DApps remain at the surface level of token incentives; those so-called new games have no essential differences from ordinary games, except for the layer of issuing tokens, and they are often disappointingly low in quality, failing to attract players with genuine gaming needs.
Looking at the entire market, 99.99% of the projects seem like air tokens or garbage projects, with such severe homogeneity that it is jaw-dropping. Clearly, there are convenient, fast, and cheap applications in the Web2 era, yet they insist on starting over in Web3, resulting only in changing the packaging without changing the content; many crypto applications seem lively, but in reality, they are heavily inflated.
On Twitter, project parties seem to have thousands of followers, but only a few dozen or a hundred are truly active. Entering the X chat room, it is filled with numerous bots; the current state of cryptocurrency applications is really laughable.
Then there are those KOLs (Key Opinion Leaders), who shout every day about the next hundred-fold or thousand-fold coin about to be born, and contracts with tenfold or hundredfold opportunities constantly tempt you. The altcoin market resembles a crazy game of hot potato, with speculators and project teams having their own agendas. Some run away, while others collaborate with VCs, and when ordinary investors genuinely make money, withdrawing and depositing becomes a big issue. The number of frozen accounts is countless, significantly affecting normal lives. This market is filled with the temptation of instant wealth, yet it is also full of investors' wails.
So, how can one make money in the cryptocurrency industry? Based on my experience, I would like to share a few points:
First, only invest in mainstream currencies. In the blockchain industry, it is essential to invest in currencies that have actual applications. Don’t always think about getting rich quickly; you should know that even if a currency has hundred-fold or thousand-fold profit opportunities, the probability of losing everything is also very high. Just like Buffett, who invests in the most valuable real assets of his time with an annual return of 25%, relying on the power of compound interest. We should also invest in cryptocurrencies in this way, steadily and cautiously. You can refer to the rule of controlling positions: 50% in mainstream coins, 30% in stablecoin finance, and 20% in sector rotation.
Second, resolutely avoid leverage and contract trading. In 2024, the amount of contract liquidation exceeded $12 billion, with the maximum drawdown in spot trading at 47% versus 97% in contracts. One can choose to do medium-term swing trading or long-term value investing. Time is a good friend of value investors. The cryptocurrency industry is highly volatile, with frequent extreme market movements. Even if spot trading drops by 30%, the coin is still there. However, if a contract encounters an extreme market condition, it could lead to total loss. It might be wise to be a coin hoarder.
Finally, consider some DeFi projects or financial products from exchanges that steadily generate coins. Currently, this field is still in a project dividend period, with returns similar to fixed-income finance, which are higher than conventional dollar or renminbi finance. However, one must remain vigilant; the dark forest rule of the cryptocurrency industry is omnipresent. Be careful not to fall for the project's tricks; for the sake of those little interests, you could lose your principal.
The cryptocurrency industry is transitioning from a casino economy to an infrastructure economy. The true value capturers will be the compliant channels that connect fiat and the crypto world, the technological foundation that lowers user thresholds, and the scenarios that create real demand.
When Bitcoin's computing power exceeds the total of all global bank IT systems, we may be witnessing a silent financial revolution—there are no myths of overnight success here, only the long-term visionaries' vast seas and stars. Only by maintaining rationality and caution can one find their own way to make money in this complex market.
#理性投资 #投资策略 #Defi风险
