Recently, there has been a lot of activity in the cryptocurrency market, so today let's have a good discussion. I have summarized some viewpoints to share with everyone, provide a detailed interpretation, and finally discuss what we ordinary investors should do in such a market.
Let's first talk about Bitcoin. I believe Bitcoin has clearly entered a long-term slow bull phase. Why do I say this? Look, Bitcoin has a high level of recognition globally, and there is a strong consensus around it, much like gold in reality, possessing unique value. The total supply is fixed and cannot be arbitrarily increased, and as more people recognize it, demand gradually increases, thus providing long-term support for price increases. On the flip side, 99% of altcoins are struggling, feeling like they have fallen into a slow death trap. Most altcoins lack unique technology, and the recognition and trust in them are insufficient, making it unlikely for funds to flow into them. How can they compete with Bitcoin? Gradually, they will lose their market.
Now let’s talk about the market for altcoins. Although altcoins occasionally experience a so-called “altcoin season,” this market trend is like a gust of wind, only blowing in certain areas, and it comes quickly and leaves even faster. For example, sometimes a new hot concept suddenly emerges, and the altcoins related to that concept might experience a surge. However, this heat lacks any substantial value support, like a bubble that quickly bursts. Moreover, the performance of different altcoins can vary drastically; some may rise with the heat, while most can only stand by and watch, leading to severe secondary differentiation.
Now, with a large influx of institutions into the cryptocurrency market, significant changes are occurring. Institutions possess substantial capital, professional investment teams, and broad information channels, and their entry immediately alters the market landscape. Consequently, the dividend period for cryptocurrencies is rapidly disappearing. In the next market cycle, speculative funds will likely be much scarcer, and it will no longer be a playground where retail investors can easily navigate and make money. Previously, retail investors could rely on some insider tips or personal insights to occasionally earn a bit of money, but it won’t be that easy anymore.
Moreover, the cryptocurrency market has become severely influenced by the stock market. Just like the stock market has pre-market trading, the cryptocurrency market is particularly sensitive to news; any policy changes or actions by large institutions immediately impact the market. This requires us investors to constantly monitor industry dynamics, rather than waiting until events occur to react. If we are not well-informed, we can easily be left behind by the market.
As a result, the survival space for retail investors will definitely become smaller, and in the end, we might not even have a foothold. Institutions are much stronger than retail investors in terms of capital, technology, and information, making it impossible for us to compete. The difficulty of making money in this market is increasing, and market share will gradually be taken away by institutions.
Additionally, with institutions buying up Bitcoin in large quantities, there is a hidden crisis. As the stock of Bitcoin in exchanges dwindles or even runs dry, a collapse of Bitcoin may not be far off. With institutions hoarding coins, the available Bitcoin for trading on exchanges decreases. If the market sentiment suddenly worsens or there is significant negative news, and everyone rushes to sell their Bitcoin, but there isn’t much available in the market, it could easily trigger panic selling, causing Bitcoin prices to plummet like a roller coaster.
On the Ethereum side, the last bull run was driven by the DeFi boom, but this time the momentum has been completely overshadowed by the meme coin hype on the Solana chain. Ethereum currently lacks new appealing stories or innovations, making it difficult to attract new capital and users. It seems unlikely for its price to keep up with Bitcoin. Without new highlights, it cannot retain old users or attract new capital, and it will inevitably lag behind in the competition with Bitcoin.
There's another point that must be mentioned: ever since the Trump couple launched their coin, the entire cryptocurrency chain has become a chaotic mess. A bunch of scam coins have emerged, taking advantage of this hype to raise funds, draining a significant amount of liquidity from the market and worsening the environment. Many people have been scammed due to their inability to distinguish these fraudulent coins, leading to devastating losses, and the market order has been thoroughly disrupted, eroding everyone’s trust in the market.
So what should we ordinary investors do? For Bitcoin, if you are optimistic about its long-term slow bull trend, you can buy a bit and allocate some assets, but be sure not to bet all your wealth on it, and control your position well, as market risks are still significant. As for altcoins, unless you have a particularly deep understanding and thorough research on them, it’s best not to touch them lightly. If you really want to play, remember to enter and exit quickly, take profits when you can, and never be greedy; otherwise, you could easily get trapped.
It is essential to pay attention to industry dynamics and policy news regularly, and find ways to establish our own channels for information. We can read more professional financial media, join some reliable investment groups, and understand market changes in advance so that we can position ourselves or avoid risks early. If you feel overwhelmed in this complex market, you can collaborate with other investors or join some professional investment communities to exchange information and share resources, which can enhance our competitiveness in the market.
Furthermore, when investing, it is crucial to be cautious and not easily participate in coins that have unclear origins and lack fundamental support. Always stay alert to protect your principal, as this market is quite treacherous; a small mistake could lead to total losses.