Although the cryptocurrency space is filled with stories of wealth, the vast majority of people have not made money and many have lost their entire investment.
Through my insights, I discovered an counterintuitive reason: The cryptocurrency space is not fundamentally for making money, but for becoming rich. With this understanding, it becomes easier to make money.
In recent years, 99% of cryptocurrencies have not outperformed U.S. stocks like Tesla. So if you want to make money, why not just buy U.S. stocks? Coinbase's stock has increased tenfold in recent years, performing even better than Bitcoin.
So is it still worth participating in the cryptocurrency space? I think there is an opportunity in the cryptocurrency space that is hard to find in the stock market, which is to make a fortune. However, such opportunities are very scarce, so if you immerse yourself in the cryptocurrency space every day trying to make money, most of the time you won't make much, but you should seize a few opportunities to become rich.
Where are the opportunities for wealth in the cryptocurrency space? I think every time there is a paradigm shift, it is the time for redistributing wealth or re-pricing assets.
For example: The paradigm shift of 2016-2017: from centralized to POW, participating in ICOs basically resulted in hundredfold or thousandfold gains.
Paradigm shift of 2020-2021: From POW to POS, because POW is too slow, some businesses can't even run at all. After the transition, both DeFi and the metaverse have seen hundreds of times growth.
From 2022 to now, there has actually been no paradigm shift. Whether it is L2 or modularization, it is just an optimization of the last paradigm shift, solving scalability and performance issues, which is why there has not been a super bull market.
I believe there are two more inevitable opportunities for wealth creation in the cryptocurrency space:
The first is RWA + Metaverse: The driving force behind RWA is that the U.S. keeps extending the life of U.S. Treasury bonds while solving the internal circulation problem of the metaverse economy. The combination of virtual and real, and the unity of chain and stock, as the ultimate product of technology, I think it's fine.
The second is POW + POS: Just yesterday, the SEC made a clear statement that staking counts as network activity, and further staking counts as a securities action. There is a huge paradigm shift opportunity hidden behind this. The future hope for ETH is modular blockchain, where it only does consensus or settlement, while execution and verification are handed over to L2 or external systems. Because it is guaranteed by POS, the security of execution and verification needs to be ensured by the re-staking mechanism. Therefore, the future of ETH is full of obstacles, which will promote the paradigm shift of Bitcoin's second layer, because Bitcoin's second layer can be guaranteed by native staking, forming the consensus architecture of L1=POW and L2=POS.
I believe this second paradigm shift is happening. Regarding the investment issues in the cryptocurrency space, if a project does not have an imagination space of over 30 times, it is really better to buy stocks; otherwise, the risk-reward ratio is too poor.
