Reflect on whether you have made money in the past and think about how to make money next year.
Written by A Kong
2023 ends in two days. Today is also a good time to make a year-end summary and outlook for 2024.
It is not an exaggeration to say that 2023 will be a big bull market. This year, especially after the inscription craze started, from BRC20 to public chain inscription to NFT, the return rate will be dozens, hundreds, thousands (ten thousand) times. It seems It’s a myth, but everyone knows how much they actually earn.
For comparison, BTC has tripled from November last year to now. After participating in various hot spots, has the total position tripled, or is it just pretending to be big and making small money, and ultimately underperforming Bitcoin? If so, then you should reflect on the reasons for not holding BTC.
After exploring the investment market for so long, everyone should understand that the return on investment can increase significantly, that is, dare to take a heavy position at the bottom, and then hold it until the bull market reduces the position and make profits.
But the problem is that when market liquidity is at freezing point and trading sideways at low levels for a long time, there are only two projects that dare to take heavy positions, BTC and ETH. Many people always fantasize that they will be free in the 3.10 Stud Ordi, but this is just comfort. 99.99% of people don’t have the courage, so the only people who can make big money are BTC and ETH.
There is another issue worth mentioning: market value. A few days ago, I saw a big boss saying that this year’s A9 level must be doubled five times to be considered a passing grade. But is market liquidity that good? How many projects can support A9’s 5-fold increase and still be able to exit? From this perspective, this year’s bull market is a bull market for retail investors. Many projects have increased dozens of times, hundreds of times to a market value of tens of millions to hundreds of millions, and can still support the exit of hundreds of thousands or millions of funds. .
**So in this round of market conditions, everyone must have a clear understanding of position allocation. That is to allocate BTC/ETH with large positions and look for new trends with small positions. **
I said earlier that this is a bull market for retail investors because these new concepts, such as BRC20 and Inscription, do not have to be so high in the early stages, and the odds are very high. But there were very few people participating in the early stage. By the time everyone reacted, ordi had already increased ten thousand times, and ordirocks had already increased one hundred times.
It is often at this time that most people participate, and the ORDI also rises later, from 50 to 60. But it is not worth participating at this time. If you take earning 10WU as the limit, you only need to spend 10U to buy ordi on March 10th, 1000U to buy on April 10th, 10000U to buy on May 10th, and 10000U to buy on December 10th. You have to spend 25,000 U to buy it every day.
If you buy it on December 10, you have to resist a 20% drop, and a few days later you have to resist a 25% drop. Think about it, if you take out the money you have saved for several years and lose 20% in one day when you buy it, few people can bear this kind of psychological gap, let alone dare to hold it for a long time.
Don’t bear such risks and pains. Change your thinking. Why not get up early and actively participate in new concepts? Many people knew about it early, but did not participate, because they just thought it was troublesome. But if they are not willing to bear this kind of trouble, they deserve to lose money and deserve to take over the market at a high position.
Having said this, I would like to emphasize once again that it is best to allocate BTC/ETH with large positions, use small positions, and spend more energy to participate in new concepts as early as possible. And follow this direction to improve cognition. **
After talking about positions, let’s talk about the industry.
As of November this year, the Ethereum ecosystem was not performing very well ----- this only refers to the currency price. The problem causing such a situation is that the Ethereum ecosystem does not continue to emerge with new concepts, but rather consolidates infrastructure.
The focus of Ethereum this year is around layer 2, but the core problem is that the core function of layer 2 is to enhance Ethereum, not to develop it. This has resulted in not many new concepts in infrastructure construction. Repeated talk about cars and wheels without making substantial progress makes it difficult for the market to pay for it.
Active retail funds have been silent for too long and need a breaking point. Therefore, after the Oridnals protocol led to the emergence of BRC20 on March 10 this year, the market began to be restless, and then the inscription effect in turn opened up Ethereum and public chains.
Bitcoin miners are also happy to see this happen, and even contribute to it. Because the inscription transaction fee already accounts for 20% of the total income. CEX also began to become active. Binance was troubled by the lawsuit. OKX came from behind and took the lead in deeply exploring the inscription market. At its peak, there were 50,000 new users a day.
However, the current function of the inscription is limited. Its biggest significance at present is to awaken the activity of the BTC ecology. Thanks to the raproot upgrade, the Bitcoin network has gained infinite approximation to Turing completeness. After that, the BTC network can get off to a better start. Make something else.
Once the BTC network begins to enrich the ecology, layer 2 will have more strategic significance. This significance is even greater than that of Ethereum, because layer 2 is a development for Bitcoin and only an expansion for Ethereum.
So I believe that next year, layer 2 of the BTC network will usher in explosive growth. You must know that the current Bitcoin ecosystem is only a few billion US dollars, while the Ethereum ecosystem is a full 200 billion US dollars.
At this point, another question arises. That is the inversion of the primary market and the secondary market. The Ethereum ecosystem, especially layer 2, is easily valued at more than ten to two billion US dollars, including other public chains.
The stragglers in the secondary market do not have that much power to take over, and the first-tier giants also know that they are deceiving small institutions to take over in the primary market, and exit in the primary market. A16Z and Ploychain are doing these things.
When it is the turn of small institutions to take over, the valuations are sky-high, and investing in the secondary market basically becomes the peak from the start. It will not leave room for retail investors to move.
That’s not to say that there aren’t opportunities, there are opportunities. Only when there are airdrops and large-scale industry slumps are there opportunities for low-priced chips for retail investors. More and more people will understand, and the opportunities will become less and less, but they will also become more and more certain.
Only new models and applications can create ripples in the public chain and Ethereum layer 2. In the past, we relied on airdrops, and we continue to innovate on airdrop models. From ordinary interactions to various conditions and restrictions, to pure financial resources Blast, it is becoming more and more difficult for retail investors.
But you still have to do the airdrop. If you don’t roll it up, there is no chance at all. If you roll it up, you still have a chance. You just need to weigh a lot of things and travel during off-peak hours.
The rest is the application, or Social, GameFi. Xpet, a small pet game, has succeeded the inscription craze and has become the hottest Dapps on the market.
Before Xpet, there was Friend. Speaking of which, in such a bleak time the year before last, the chain gaming circuit, which received the most financing, did not make many achievements. Instead, some small games created an out-of-circle effect.
I have long believed that crypto games should not follow the old path of traditional games, and there is no point in trying to compete in AAA. More games that require small but beautiful games, or strategy games that don’t require configuration, are easier to launch.
This is also an essential engine in every bull market. Now the public chain does not have the ability to become the engine of the bull market, only DAPPS can. Because the story has been told, the market is not pulling. On the contrary, DAPPS is easier to achieve super multiples due to its low market value, and it is easier to attract market traffic. Then major public chains promote the ecological process by seizing such hot spots.
Solana shines in this round. The big guys in the Solana ecosystem have indeed underestimated them in the past. Their speed in following hot topics and their strong technical performance are commendable.
This year, Solana, as a representative of the resistance, did have a big impact on Ethereum. Even the leading company MakerDAO expressed its intention to set up Maker-Chian on Solana. Unfortunately, it was suppressed by Emperor Vitalik. After angrily selling 500 MKR, it ended with MakerDAO making a negative comment.
The above discussion is more about industry development related to retail investors, but among the mainstream, the resurrected concept of Depin has been repackaged and resurrected in the Solana ecosystem.
Don’t underestimate these concepts of “new wine in old bottles”. It’s very simple. If the wine is useless, it has no chance to be repackaged. DeFi, which was in the last bull market, was called “new wine in old bottles” when it first came out. What’s the result? It has become the greatest wealth code.
The same goes for Depin. In the past, HNT and IFPS also told such stories, but they only ended at the end. Without DAPPS and without a more convenient entrance to access, they were all anticlimactic and ineffective. Even HNT has been delisted by top CEXs such as Binance and OKX, which shows the lack of market attention.
But it’s different now, Hnt comes out again around Solana. BitTensor (TAO) has increased tenfold, Render Network (RNDR) has a market value of nearly 1.7 billion, eight times a year; the remaining IOTX, FET, Honey, Dimo, MOBILE, and HNT have basically increased four to five times.
Here are some very subjective opinions. Messari did go a bit too far in boasting about the Depin track. This was the same as Ifps at the time, taking out the traditional giants for a round of competition, trying to show their competitiveness, and arranging a 100-billion-level track.
This is all false. The encryption industry has no direct competition with traditional giants, and they will certainly not be able to defeat them. This is true for cloud storage, and so is Depin.
**Encrypted things are encrypted, and it is difficult for the traditional world to intervene. The subversion we are talking about is not to come up with something to defeat the giants in their fields. This is too funny. Instead, start the game again, make your own pile bigger, and eliminate those things. **
Messari is the mouthpiece of top institutions. He said that these are not deceiving insiders, but outsiders, and they are trying to lure new capital into the market. In fact, it has nothing to do with retail investors, and it is even a good thing.
On the one hand, we continue to add narratives to Depin to attract capital to enter the market and increase the market value. On the other hand, we promote the market in the secondary market to attract the attention of retail investors. At the same time, we also create some Dapps to attract the followers.
What should be noted here is that if the new VC adopts this method, the Depin primary market will be boomed, and the secondary market will not have much space. Either they will seek early projects on the Depin track such as Theta, ar, etc., or they will Go do airdrops.
**These airdrops are likely to cost a few thousand dollars at zero cost. Be sure not to let it go. **
All in all, the crypto cyclical trough has passed. Those who did not open a position at that time should be more cautious and bold. Opportunities in the future will no longer be given all the time like last November, but opportunities will be given at every opportunity.
It is prudent to avoid FOMO for the bulk of the short position, and it is bold to dare to seize every big plunge to add to the position.
Finally, let me announce my positions, including BTC, ETH, Sol, ordi, arb, ido, sats, grt, and the bottom positions of the last round of blue chip DeFi.
Focus areas of focus: Bitcoin second layer, Ethereum second layer (airdrop), Depin, GameFi, intra, socialFi.
Oh, by the way, I’ve written about it on the Depin track, but I haven’t fully explored it. I’ll write an article next month. I’ve written about it sporadically on Twitter, but I haven’t compiled it because it has increased a lot.
that’s all.
