What has happened in the crypto market and what will happen?

Author: 0xTodd, Source: Twitter @0x_Todd

In the past week, many friends have called me to inquire about the market. I feel it is necessary to publicly share my thoughts and disclose my views on the current market situation.

[What has changed]

[Future Process]

My family, who have been paying attention for a long time, knows that I am a long-term investor. Therefore, starting from 2019, I have an annual strategy that is updated every year, and this one is probably for 2024-2025, for discussion and communication with my family.

1. DeepSeek Burst the Bubble

Once DeepSeek comes out, you don't care whether it really used 5 million dollars to train such an AI, but the narrative is like this: [Algorithm Improvement] has at least temporarily defeated [Computational Power Improvement].

Don't get caught up in whether this thing is real or not—since the market unanimously recognizes 5 million as a fact, you should treat it as if it is real.

As we reach the end of 2024 in the crypto industry, besides memes, I don't want to admit it, but objectively there is indeed only one narrative left: AIAgent, which can be said to be the hope of the entire village.

However, no one anticipated that AIAgent would be ruthlessly defeated by DeepSeek from the adjacent true AI track.

The people in the DS team are all truly IQ 200, fresh graduates from Qingbei, and there are many Olympiad medalists.

In contrast, in our industry, the ones being idolized are the second-tier programmers who are idle at home, and the AI engineers who have been laid off by big companies or are secretly working on side projects, which sometimes forces us to have an IQ of 50.

So..

On January 27th, I tearfully took profits on all my AI token positions. I didn't sell at the peak and had to sell after a significant pullback. It would be a lie to say it didn't hurt.

But the colder truth is that this thing has turned our entire AIAgent track into a joke, and this is likely true.

The reason why "narrative" has "narrate" before "event" is that this "event" has not yet materialized and can only rely on "narration". Once the story cannot continue, the decline of the track is truly irreversible.

2. The President and the Mob of the President

I don't know how everyone feels during the New Year, but my physical feeling is that many friends and relatives are asking how to register for BN or OKX, simply because they want to buy Trump coin.

The last time they were this crazy was during the National Day holiday, when they wanted to open accounts and rush into the A-shares.

Shanghai Composite Index Trend Source: Tencent Securities

If I remember correctly, the warriors who entered the big A on the 10.8 are still hanging at the top of that mountain.

After taking profits with AI, to be honest, I became more and more afraid, and then I saw this post.

Roughly speaking: the president seems to have lost a lot, but there are two possible reasons for this:

1. He doesn't make money in the way you can see.

2. He is a fool*

**Anyway, I know the answer definitely can't be 2. **

Yes! Meme has now become something the president is playing with, and he can also make money through channels that are unknown to us.

To be fair, can our meme match sit at the same table as Trump?

A hippopotamus from Thailand, a squirrel from the United States, a bottle of longevity medicine that extends the life of flies, can they really sit at the same table with Trump, who is firmly established in the Oval Office?

• It's New Year, adults at one table, children at another.
• Adults drink fine wine, while children only deserve to drink Sprite.

So, that day I basically sold off all the memes I had. My meme position once had a huge unrealized profit, but due to actively lowering my IQ to 50, I didn't complete the great retreat, but continued to join the great revolution.

The feeling of a dream.

3. A Top Signal: High School Brother Earns Millions

I believe that all the family members who play memes, even those who don't play memes, have heard about this legendary story recently.

A high school guy sat idle for a month and suddenly hit Jelly, making tens of millions with an ultra-low cost.

Of course, as it goes on, it gets more and more ridiculous, and the rumors keep increasing. I'm not sure if this matter is 100% true, but I know that the feeling is right.

Looking back at the historical peak of 69K in 2021, I was reflecting on the 1-3 days before it.

• Interns easily outperform fund managers in terms of returns.
• Base community contributors of ENS received tens of millions in airdrop.

At that moment

Just like

At this moment

I liked this post, a TIME editor ( could also be a hacker ) who can immediately harvest countless SOL with a fake tweet.

I ask you, what does this mean?

It's not that making money is impossible—experts can always make money, even at the bottom of a bear market.

But if the subject becomes an ordinary person:

Intern brother makes a lot of money, ENS contributor brother makes a lot of money, high school brother makes a lot of money, editor brother makes a lot of money.

Means: [At this moment, everyone's hands are particularly loose]

Friends who often play cards know that you can only relax your hands when the unrealized gains are extremely high.

This indicates that the greed index has reached a true peak.

This is a super top signal.

So, on the 30th, I liquidated almost all of my altcoins, keeping only BTC and a small portion of mainstream coins ETH/SOL/DOGE exchange tokens.

Although there are still losses, there are still some small victories left.

I admire the wonderful operations of the high school guy, and I also respect the market rules of this alternative investment.

4. Questions About BN and BN's Response

Sigh, to be honest, I don't want to talk about this topic.

As a former CEX practitioner, I have seen this set of consultant-listing-selling tricks too many times, from initial anger to gradually becoming numb, I am no longer surprised.

However, in the past, this thing was placed under the table, belonging to "small greed and small corruption are lubricants for development";

Belonging to the saying "If the water is too clear, there will be no fish", a slight murkiness beneath the surface is part of the game rules.

After all, we do not live in a utopia, nor do we live in a vacuum hometown.

However, the thing that is most taboo is to bring it up from under the table to the surface.

I have no intention of criticizing BN or the first sister, as this issue exists in almost every CEX.

If this were placed in the traditional world, to exaggerate a bit, it would be considered a huge scandal, capable of causing hundreds of people to lose their jobs and dozens to be imprisoned.

Perhaps Sister Yi should just refrain from responding, and learn from the celebrities to handle things coldly, giving the retail investors a bit of hope.

However, our industry is primarily made up of skeptics, and a huge scandal is like a heavy blow, striking hard on the heart of every holder.

It shattered the beliefs of many people.

Our industry really needs "gods" because it is maintained by consensus.

But when everyone realized that the "gods" and their servants were also trying to make a quick buck, faith suddenly vanished, and it quickly projected onto the related gods—all the altcoins on BN are currently facing huge doubts and scrutiny from retail investors. Since AI and HOOK are like this, could it be that other coins are really better?

5. Future Scripts

If we follow the perspective of carving a boat to seek a sword, this recent decline is very similar to 5.19. I suggest everyone review the market trends after 5.19 personally.

The trend after May 19, 2021, source: Bitfinex

If we follow the script of 5.19, what follows is a repeated two-month oscillation plot, until even the most loyal are shaken off, and then a new $Bitcoin ATH will arrive.

Of course, there are also doubts that this is the plot of 12.4, AKA the beginning of the bear market.

Starting from the inner inclination, I hope this is 5.19.

After all, the U.S. national strategic reserve for Bitcoin is becoming clearer, and never underestimate the huge impact of this matter, really.

Even if Bitcoin reaches 85K-88K, I am willing to increase my position further.

6. My Position Distribution

My current position:

40% BTC

20% mainstream coins ( ETH, SOL, DOGE, BNB/MNT )

40% stablecoin wealth management

Bitcoin is my eternal faith, and I think I will never sell BTC again, nor will I swing trade.

Reasons to Hold ETH:

To be honest, the faith in ETH is weakening.

However, objectively speaking, the president's DeFi project is buying ETH.

I don't know how many family members are trading U.S. stocks, but many people regret not following the trades of [Nancy Pelosi, the stock god from Capitol Hill].

Image source: 天下杂志

Once, Pelosi's highlight moment was as the Speaker of the House, which is only the third in line in the U.S. political hierarchy.

• And now Trump is the real president, this crypto president, is holding a large position in ETH( despite having already deposited it into the untraceable Coinbase custody ), this amount should not be underestimated.
• Secondly, ETH has dropped to today's position, and I feel it has reached the peak of FUD. There might be thoughts of a reversal. I can't buy when no one is paying attention, at least don't sell when no one is paying attention.

Reasons to Hold SOL:

There is a small probability of an ETF.

However, the cooling of AI narratives and the short-term sluggishness of MEME can be seen as two small clouds of gloom.

Reasons to Hold DOGE:

Grayscale has launched a Dogecoin trust, and there is also a small probability of an ETF for Doge.

In addition, Musk is working hard in the D.O.G.E department;

Being in the same car as the world's richest person and the "Director of the U.S. Development and Reform Commission," I think I can sleep well.

Reasons to Hold Exchange Tokens:

To put it bluntly, the exchange has no possibility of stepping onto a bigger stage.

Coinbase will not list BNB, and Binance will not list MNT.

However, exchanges are the only institutions in our industry that can make money and offer benefits.

If a bear market really comes, exchange tokens are relatively more resistant to decline, and occasionally an IEO can help recover losses; we can only rely on this to get through the bear market.

7. Harsh View: The Good Days for the Old Dengs Are Over

Apart from the above, I am unlikely to hold any large positions in altcoins in the short term - the reason is quite simple, inflation is too fast.

The speed at which new users and new funds enter the market simply cannot match the speed at which these token printing maniacs are churning out coins.

Source: Decrypt

A few days ago, there was a statistic that the best account on pumpfun issued 17,000 coins in 3 months.

Not 170, not 1700, but 17000! His contribution alone may exceed the total of all tokens issued during the entire bull market in 2017.

Why have the investment strategies of the old Dengs failed?

There are too many choices.

There are too many angles!

Even the same angle has N CAs.

Where can the imitation of old Deng's be used?

The strategy that the old legends love the most: buy a mid-level mountain race at the 100M and 200M positions.

Hold it for 2-3 months and bet that it will outperform Bitcoin.

However, it seems that now even ETH may not be able to outperform.

And the strategy that Marshal P likes the most: to buy a project with a valuation of 10K in the internal market.

Ran away after 30 minutes.

Real men never look back at explosions.

Clearly, in today's environment of massive token inflation, P Marshal far surpasses Old Deng.

I am not calling on everyone to become a P rookie, I just hope that everyone at least won't become an old Deng.

8. Optimal Position: 50% Bitcoin + 50% Stablecoin Investment

Additionally, I sincerely suggest that everyone hold a certain amount of U to get through the upcoming time.

You have to accept the fact that no one can really sell at the absolute peak.

The top of the mountain is one every 4 years, and you can find a day to sell in more than a thousand days, with a probability of 1/1000, there are very few natural things that can be done, and all of them are super lucky.

At this stage, a half position is the best choice.

You invest 50% of your principal in wealth management, we won't talk about which mines to rush or what arbitrage to do.

We are doing the simplest Ethena USDE, and now Pendle can offer an interest rate of 18%.

If Pendle is too much hassle, just throw it into AAVE or mainstream CEX for management, there's still 10%.

The other 50% is mainly in Bitcoin, quietly waiting for the day when the United States' Bitcoin strategic reserves arrive.

With interest cash flow,

With dreams and faith again,

You must be comfortable,

Packed.

Of course, you can allocate another 5% to the altcoins you truly believe in, whether it's ETH, SOL, DOGE, or any coin you have faith in.

It's fine to take out another 5% of the funds to play a couple of PVP matches; if you win, enjoy it, and if you lose, just consider it an expense to keep your skills sharp. Isn't that wonderful?

Finally, the distribution forms this Taiji diagram.

9. Conclusion

I am quite satisfied with my current position, after all, this is my 8th year in the ups and downs of the crypto industry, and after so long, I have gained some experience.

The only thing I feel a bit regretful about is that I spent the New Year days playing in Osaka and got lazy, not organizing these thoughts to share them in a timely manner.

The same strategy that could have helped many people a few days ago has now turned into a post-mortem analysis when mentioned a few days later.

It's never too late to mend the barn after the sheep are lost.

I hope that each family member can achieve their own great results in the crypto market.

Of course, if you can't achieve big results, then retaining some small results and earning more spiritual wealth and social wealth is still worth the trip.