Why is it getting harder to make money in the crypto world?
The core reason is that there is less money and more coins.
There are two major backgrounds for this bull market: one is that the Federal Reserve started raising interest rates in 2022, maintaining rates above 5%.
Meanwhile, the global capital markets from 2020 to 2021 entered a crazy bull market, with A-shares, U.S. stocks, and the crypto world seeing countless hundredfold and thousandfold returns, largely due to the pandemic in 2020 and the Federal Reserve lowering interest rates to nearly 0.
Different levels of funding interest rates led to completely different market outcomes.
When there is fundamentally no money in the market, whose money can you make?
So, this is the fundamental reason why making money in the crypto world during this bull market is so difficult.
The Federal Reserve cannot possibly maintain such high interest rates for the long term.
A major influx of liquidity is an inevitable outcome for the future.
Therefore, I believe that the crypto world will have better profit-making effects in a year or two.
Another major background is that the assets in the crypto world are currently in a severe phase of overproduction.
In 2017 and 2021, how many coins were there in the crypto world? Last year, it was reported that there are already 35 million coins in the crypto world.
Too many monks and too little porridge; lacking funds inherently means poorer profit-making effects when distributed among specific coins.
This is the reality of the crypto world today.
My coping strategy
First, strictly select high-quality coins, choosing the best among over 35 million coins.
Either choose Bitcoin or have the ability to filter out the top coins from altcoins.
Second, preserve strength and minimize losses. Hold on until the next major liquidity influx cycle, when macro improvements will bring profit-making effects back into play.