The experience in the crypto world has led me to summarize that Altcoins can be roughly divided into four different levels, and the characteristics of each level determine their market performance and the holding mentality of investors.

First-tier projects: Positive spiral growth, with value and market capitalization coexisting

This type of project has both market operation and practical application, forming a positive feedback loop of "doing business and doing market-making". The project not only has a successful application to support its valuation, but the rise in its market performance will also further strengthen the belief, allowing holders to obtain continuous positive feedback, thereby promoting more long-term "diamond hands" holders. Typical cases include BNB, SOL, ETH, etc. Even if ETH has underperformed in this round, it still has a large number of die-hard holders who firmly believe in its future potential, because the huge gains brought by ETH in the previous bull markets have already given early holders enough confidence and returns.

Second-tier projects: Pure speculation, pump and dump

This type of project does not focus on construction, but focuses on market speculation, relying entirely on "market-making" to drive price surges. For example, DOGE, SHIB and some of the hot meme coins in this round. There are also many old Altcoins in 2017, such as Qtum, Neo. These projects often experience dozens or even hundreds of times the surge, but often lack substantial support, and value investors usually find it difficult to recognize their long-term value, so even if they participate, it is mostly short-term speculation, and it is difficult to hold firmly.

Third-tier projects: Short-term harvesting, no long-term planning

This type of project neither does business nor deeply participates in market operations, with the sole purpose of "selling out as soon as it goes online". Although these coins are essentially junk projects, the harm is relatively limited, because they will not create long-term illusions for investors. Investors often recognize the reality after a round of plunge and cut their losses in time, without being trapped for a long time. The project parties usually make a profit and run away, ending up with the result of "only killing people but not their hearts". Although there will be some losses, at least the opportunity cost of investors will not be delayed for a long time.

Fourth-tier projects: Pseudo-value coins, chronic harvesting

This is the most dangerous type of project, because they "do business" for a long time but never pump, making investors mistakenly think they are value coins, and thus falling into a long-term trap. The most fatal point of this type of project is that it conforms to the logic of value investment, making holders constantly deepen their sunk costs and miss the opportunity of the entire bull market. For example, EOS, BTM, the former was once touted as the "Ethereum killer", and the latter was once the leading domestic public chain. However, these projects have accumulated a group of believers in the early stage, but ultimately let them get stuck in it and unable to extricate themselves. Especially for EOS, after the hype period, it entered the "doing business" stage, and with the advancement of various node plans and technical development, the coin price has remained sluggish, making investors constantly struggle whether to give up.

Summary

The Altcoin ecosystem in the crypto world is complex and changeable, from real value projects (such as ETH, SOL) to pure speculation capital pools (such as DOGE, SHIB), to projects without sincerity to harvest, and even pseudo-value coins that slowly harvest, different levels of projects are attracting different types of investors. For ordinary investors, recognizing the essence of these projects and avoiding being influenced by market emotions is an important rule for survival in the crypto world.

Professional creates value, and details determine success or failure.

If you feel helpless or confused in the crypto world at the moment, I hope my sharing can bring you some inspiration and help!

Finally, there are still many things that have not been written in, such as specific opportunities and specific decisions, which are often not something that can be summarized in an article.

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