Crypto Assets Market Outlook and Investment Strategy Analysis

Recently, I have had more time to think, and I would like to share some thoughts on the market.

The overall trend of the Crypto Assets market may only become clear after September. Considering factors such as macroeconomic resistance, summer liquidity constraints, and quarterly position adjustments, the true market dynamics will only manifest when market participants return after the August holidays. Recent market activity shows that the rise in most altcoins is mainly due to short squeezes. Traders are influenced by previous rebounds to chase the price, but there is a lack of support from long-term holders. Many coins have experienced a process of rapid rises and falls.

Ethereum has experienced an unexpected rebound, led by AI-related assets and some coins in this surge. On the other hand, tokens with real use cases, strong fundamentals, or buyback mechanisms have shown greater resilience, with smaller declines and quicker recoveries. From this, we can draw the following insights:

1. The demand for Bitcoin continues to exist

Traditional capital is gradually entering the market through regulated channels such as ETFs. The nature of the capital supporting BTC is different from previous periods, which makes large-scale BTC liquidation unlikely to occur unless impacted by significant macro events.

2. The differentiation of altcoins intensifies

In the future, funds may flow back to certain altcoins, but a widespread increase is unlikely. Only tokens with clear use cases and real-world applications are likely to attract funds. This is one of the reasons Ethereum may outperform other public chains. The clarity of regulation, the increase in DeFi usage, the deflationary structure, and the demand for staking together create a strong growth momentum.

3. Tokens Supported by Venture Capital Face Structural Risks

Token unlocks will continue to exert pressure on prices. In conditions of insufficient liquidity, the ongoing selling pressure from validators and early investors limits the upward potential. Tokens from certain ecosystems, in particular, face persistent selling pressure related to their validator reward structures.

4. Some tokens have structural advantages

Tokens that do not have the pressure of venture capital unlocking and are fairly issued may have advantages. This type of hype mechanism, purely based on attention, performs well in early cycles.

However, this phase may be coming to an end. The issuance and launch of certain tokens may mark the peak of attention for the related coins. Subsequently, interest in such coins begins to wane. In the future, only those tokens with strong narratives and market recognition may have real speculative value.

Interestingly, the fatigue surrounding venture-backed tokens has created opportunities for fairly launched Web3 projects, which may become the next wave of wealth accumulation. To seize these opportunities, it is essential to actively participate in on-chain activities. Significant opportunities often arise when information asymmetry exists.

5. Future Market Trends

If popular coins are no longer the main opportunity, then what is the next focus?

My point of view is: the integration of AI and Crypto Assets.

Just like the early DeFi craze, many early AI projects may fail after the hype. However, some truly practical projects are quietly developing during this downturn. We have already seen some projects emerging on-chain.

As the hype in certain areas fades, market attention will naturally shift to new narratives. AI, with its clear practicality, is likely to become the next hotspot. Many projects that combine AI with Crypto Assets adopt a fair distribution model, echoing the characteristics of early successful projects.

This is why I have recently taken the time to study and position myself in this field ahead of time. While there is no need to rush to establish a full position now, I believe that if the market rises strongly again, this field will contain the greatest asymmetrical opportunities.