Source: Talking Li Talking Outside
Time is the fairest existence; everyone has time, but many people only realize that time is their greatest wealth when they lose it.
At the beginning of the year (January 3), we published a topic article on the 16th anniversary of Bitcoin, listing the price changes of Bitcoin over the past decade in a chronological manner as shown in the figure below.
I remember some friends commented after reading, lamenting that they missed the golden period of Bitcoin's surge. If they had randomly bought dozens of Bitcoins ten years ago and held onto them until now, they would have at least 300 times the return.
Theoretically, it can be said that buying Bitcoin ten years ago and holding it until now is a very difficult thing because, for most people, it is impossible to have such extreme patience.
1. The market is an expression of emotions.
Time is everyone's greatest advantage, but this advantage requires enough patience to be fully utilized.
Especially in the matter of investing, never harbor any luck mentality, and do not think you can always defeat the market with your intelligence and talent. The market actually does not care how smart you are. Ultimately, the market is merely an expression of emotions. Only by overcoming our emotions as much as possible and being able to reasonably hedge our reckless behaviors can we have the opportunity to maximize the advantages of time.
In the previous article (August 5), we mainly discussed the topic of 'opportunities' and mentioned that the market never lacks opportunities. From my perspective, I believe waiting for opportunities is a good thing because the market provides us with composite opportunities, which can continuously accumulate and generate compounded growth.
For a simple example, let's take Bitcoin. As long as we can effectively utilize the advantages and patterns of cycles, identify the extreme situations in the market, remain calm, and patiently wait for some opportunities, not trading frequently or casually leveraging, after sticking to a few cycles, we will likely achieve good results.
Of course, there is a premise here: choosing the right goals and systems is more important than short-term efforts. To put it more plainly, if you find an investment opportunity with an average annual return of 10% and stick with it long-term, the returns after several decades will definitely be considerable, and assets like Bitcoin remain one of the best choices.
I remember in the first two years after entering this field, I, like most newcomers, often liked to stare at the exchange backend and wallet balances, focusing on changes in trading profits (floating income). The result was that I often emotionally forced myself to execute various trades to earn more income every day. However, this led to inner restlessness and increasingly irrational trading, sometimes even resulting in losses.
As I later began to change my strategy and shifted the focus of my trading to accumulating coins, transforming from a frequent swing trader to a cyclical swing trader (making only a handful of trades each year), my mindset also gradually improved. At the same time, I gained more time and energy to engage in new thoughts and summaries.
As for me now, in terms of trading operations, if I don't trade for several months or can't make money, or if my wallet account experiences significant changes (floating losses in US dollar terms) due to market volatility, I don't care at all because I believe this market will still rise in the long term. What I value are still the opportunities in the next 5, 10, or even 20 years, as long as I keep maintaining my patience.
If we truly understand that the market is just an expression of emotions, then what we need to do is relatively simple. When people feel fear, we can act against fear, and when people start to become optimistic or FOMO, we can begin to sell in batches (and continue waiting for new low-buying accumulation opportunities).
Just like the classic saying by Buffett that many people know: I am greedy when others are fearful, and I am fearful when others are greedy. The core of Buffett's statement is not just the literal reverse thinking; it also tells us the importance of self-emotion control in investing, that is, investment needs to be rational, not just following the crowd.
But the reality is often that everyone understands the principles, yet many people still cannot live well. In terms of investment, perhaps experiencing losses or setbacks is the best teacher. This may also be an interpretation of 'losing is a blessing,' so there is no need to fear a temporary loss. Experiencing losses early on is not a bad thing, but one should timely conduct necessary reviews, reflections, and summaries after losses to avoid falling into continuous losses and ultimately being ruthlessly eliminated by the market.
Being able to earn more money is definitely a happy thing, but we can also change our perspective. When making money no longer excites a person, perhaps they are really not far from successfully profiting. Conversely, when someone is still excited about making money from a particular trade, they may make greater mistakes in new trades.
In summary, we need to learn to be calm investors, find the balance point of our risk preferences, and maintain focus and patience based on a higher time frame to achieve sustainable preservation and appreciation of our investment portfolio.
Of course, if you still believe you are the chosen one, capable of defeating the market, and can even seize opportunities for overnight wealth, then you can continue to gamble or play. I won't stop you because I can't, nor do I have the obligation to stop you.
2. Rate cut = bull market?
In terms of the current emotions, although Bitcoin remains at a high of $110,000, achieving about a 60% increase since April, from the perspective of retail investors, it seems that people are still in agony.
Because many retail investors believed in 2023 that Bitcoin at $20,000 was too expensive and wouldn't buy, in 2024 they thought Bitcoin at $50,000 was too expensive and wouldn't buy, and similarly, this year they believe Bitcoin at $80,000 is too expensive and won't buy. Thus, many people holding a large proportion of altcoins while waiting, and the waiting slowly turned into agony, with the goal gradually changing from the initial 100 times or 10 times to just breaking even. These people wander in the comments of various KOLs, watching KOLs shout that the altcoin season is still ahead, and thus continue to hold onto the fantasy of making money in agony.
As for the topic of altcoin season, we have discussed it quite a bit in our previous articles, so we won't elaborate further here. What we want to emphasize is a basic principle: if the market allows everyone to make money, then where will the money you earn come from?
In simple terms, the money you/ I earn is also the money others lose. The essence of the market lies in liquidity, as we mentioned in previous articles: if you do not know where the market's liquidity comes from, then you are the one providing liquidity.
Currently, people's fantasies can be roughly divided into several types, such as:
- Fantasizing that the Federal Reserve can quickly cut rates and then bring more liquidity to the market, thus promoting the arrival of a comprehensive altcoin season.
- Fantasizing that the altcoin king Ethereum can quickly break its historical high in price performance, thereby triggering a new round of comprehensive altcoin season.
But there is still a problem to face: have you considered the worst-case scenario (i.e., setting a Plan B for yourself)? Suppose the Federal Reserve lowers interest rates as expected this year, and ETH also breaks its historical high, but the market still does not welcome the comprehensive altcoin season you are hoping for. What will you do if your heavily loaded altcoins still cannot break even or make a profit?
Take the interest rate cut for example. Recently I have seen many comments shouting: Rate cut = bull market. Strictly speaking, I believe this statement is debatable.
Through the Federal Reserve observation tool, we can find that currently, the probability of interest rates being lowered to 3.5%-3.75% this year is 51%. As shown in the figure below.
In other words, this seems to be some distance away from the market neutral rate of 3%-3.5%, and this result should not be considered an optimistic signal, as a rate cut does not necessarily lead to the immediate arrival of a new bull market.
I remember in our article on March 2, when discussing interest rate cuts, we also mentioned: since last year (2024), the market has been paying attention to expectations of interest rate cuts. But to be honest, in terms of the current crypto market itself, it is at most just a small market. We may receive liquidity from the spillover of stock and other financial markets due to interest rate cuts, but do not expect liquidity to flood into the crypto market in large amounts.
Later, in the article on March 16, we continued to elaborate on the topic of rate cuts, stating: in the last bull market, it was precisely because of extreme rate cuts in 2020, extremely low borrowing costs, and greater liquidity that nurtured the process of a new bull market. However, if we look back at historical price trends, we can also find that the effects of rate cuts at that time did not manifest immediately in the crypto market; the bull market did not explode until 2021. At the current stage, the crypto market is mainly enjoying 'excess liquidity,' meaning that the large-scale liquidity brought by rate cuts will first flow into traditional markets like US stocks before the excess liquidity flows into the higher-risk crypto market. However, this situation will gradually change as more large institutions begin to deeply participate in the crypto market in recent years, making the crypto market increasingly synchronized with the US stock market. Once there is large-scale liquidity in the market, some funds may choose to flow into the crypto market in advance.
At that time, we also mentioned in the article that the interest rate cut in 2020 is different from that in 2025. Apart from the difference in starting rates, the biggest difference is the speed of the rate cuts. The previous round of rate cuts was relatively large in speed and magnitude, while the current round (2025) seems to be a slow and gradual process. Therefore, for the current state of the crypto market, it may continue to be a gradual market.
In addition, in the article on April 14, we again mentioned the topic of interest rate cuts and stated: don't simply think that as long as the Federal Reserve cuts rates, the market will keep rising. The relationship between interest rate cuts and market rises is not as simple as we imagine. For example, once the market clarifies the expectations of rate cuts, even if the cuts have not formally occurred, there is a high probability that there will be a wave of speculation in the short term. For another example, when the formal rate cuts come, although the policy has loosened, the market may also experience a new round of declines or peaks and falls in the early days of the cuts. Rate cuts are definitely good for the market, but don't directly equate rate cuts with price increases because the market is inherently dynamic and volatile.
Many people tend to view issues from a single perspective. They hope the Federal Reserve can quickly cut rates because rate cuts will bring new liquidity, which can drive up the prices of risk assets. But looking at it from another angle, if the probability of rate cuts increases, it also means the economic situation in the US (and globally) is further deteriorating. If someone pays attention to macro data, they will know that current US employment data is not optimistic, the real estate market is struggling, PMI is below the boom-bust line (50), and the fiscal deficit continues to expand... These data and phenomena all indicate signs of economic contraction.
If we combine the market's trends with these macro conditions, it is not an exaggeration to say that this is the important reason for recent market fluctuations. However, these conditions seem difficult (if not impossible) to change in the short term.
Of course, it is precisely because the market is volatile and there are various uncertain factors that some special demands or speculations can bring about price increases in assets in the short term. For example, recently some listed companies have started to crazily accumulate and reserve ETH, directly contributing to a rapid rebound in ETH prices. However, from a long-term perspective, if the macroeconomic situation does not undergo significant changes, the overall market may still remain in a relatively chaotic and volatile state, making it difficult for us to directly welcome a comprehensive and widespread bull market (the kind of crazy bull market people idealize).
In summary, for risk assets, rate cuts are indeed something people should look forward to because rate cuts mean more liquidity. However, we should not be overly optimistic just because we will see the arrival of rate cuts. Rate cuts themselves are merely a key condition to catalyze the price increases of some risk assets, not the result. From a long-term perspective, the market will not continuously rise simply because of direct rate cuts but should see sustained increases as signs of economic recovery begin to appear.
Rate cuts occur because the economic situation is deteriorating, not improving. In the short term, the market may cheer and experience a peak due to rate cuts, and smart money may also utilize the cuts for short-term speculation and push up some asset prices. However, in the long run, smart money will not take excessive risks. Rate cuts are not just a blessing for increases; they can also serve as a wake-up call. If the reason behind the rate cuts is a worsening economic situation, then this issue might be more serious than it appears on the surface.
Therefore, we must maintain calm thinking, and in addition to steadfastly holding BTC, we should also try to retain enough liquidity (cash/U) positions.
