The author reviewed the birth of PumpFun, the Bitcoin halving, the differences between the scams of 2021 and the present, and how to adapt to the new market cycle, reminding investors to pay attention to limited liquidity, have a clear sell strategy, and follow the narratives in the market rotation to avoid excessive FOMO. At the same time, always keep some profits in stablecoins and continue to accumulate long-term quality assets like BTC.
The following is the original content (edited for easier reading):
This cycle is very difficult, worse than any previous cycle. Many even call it the "crime cycle" due to the constantly growing number of "rug pulls" and Altcoin projects.
The purpose of this article is to review the past and try to predict what our fellow small partners who just want to succeed will face next.
The Birth of PumpFun
On January 19, 2024, PumpFun was born, forever changing the face of meme coins. Everyone was given the opportunity to launch a token, regardless of their age, occupation, or nationality.
The hype was not high at the time, but PumpFun gradually gained momentum starting in March 2024, with the first projects being $MICHI and $FWOG. Anyone could launch a meme coin in just a few seconds, a phenomenon that changed the entire market.
As more and more tokens appeared, PumpFun became a fair issuance platform, with no insiders rug pulling. Although it looked very attractive, the withdrawal fees were huge.
Since its launch, PumpFun has earned over $2.86 million in $SOL, equivalent to $577 million. It may be one of the most successful startup projects ever.
This liquidity was permanently extracted and went into the pockets of PumpFun's developers. But I think this is an important reason that sets this cycle apart. We'll discuss this further later.
Bitcoin Halving
Next is an important moment in the current cycle. On April 20, 2024, the Bitcoin mining reward was reduced from 6.25 BTC to 3.125 BTC. Many believed that the approval of the first ETF on January 10, 2024 could be a "sell the news" event, but we actually saw new ATHs.
ETF + Halving is the strongest bullish combination for BTC, as many have been waiting for institutional liquidity to start flowing into the market. And that's exactly what happened. Fidelity, BlackRock, and MicroStrategy have been buying daily, constantly injecting liquidity into the market.
This gave people hope. They thought this bull run would be similar to the previous ones, but this time, everything was different.
The market is always fighting against the masses, meaning that if retail is bullish, the market is likely to go down, and vice versa. Perhaps that's what's happening here, and we're about to find out.
Your Expectations Are the Problem
Looking back at the 2017 and 2021 cycles, the situations were very similar. Making money was not difficult and did not require any special knowledge. At the time, there were 10-20 well-known mainstream coins that everyone was constantly accumulating.
First, BTC would rise, then ETH would follow as the cycle's Beta asset, usually with higher returns, and then we would move from ETH to other mainstream coins and then to some smaller coins.
This is also why many people in 2024 decided to skip the BTC stage and invest directly in ETH or other Altcoins, the logic being simple. If ETH can go up 5x and larger Altcoins can go up 10x, why wait for 2-3x returns on BTC?
This logic is very straightforward, however, the "masses" did not consider that this cycle could be different. The number of projects, tokens, and meme coins is 100 times more than before, and everyone rushed to buy familiar tokens like $DOT, $ATOM, and $ADA, waiting for the promised 10x returns.
As a result, when liquidity started flowing into Altcoins, the sheer number of new projects actually left the old projects behind.
The Scams of 2021 Are Different Now
I just saw @Overdose_AI raise an effective point, so I decided to include it here. Going back to 2021, the "rug pulling" scammers were quite creative, and as long as they weren't too greedy, they could almost let everyone jump ship.
Terra $LUNA was controlled by Do Kwon
FTX was controlled by Sam Fried
3AC invested for a long time before the collapse
Alameda pushed different narratives and manipulated the market
The scams back then were relatively difficult, requiring a certain level of intelligence. But now, people are just using big names, celebrities, and even rulers of major countries to promote their junk projects.
People have become accustomed to gambling, FOMO entering $TRUMP and $MELANIA, deciding to make up for the losses through $CAR or $LIBRA, and ending up losing all their money.
I know 10 to 15 excellent traders who have previously invested in $LIBRA through DCA, seized opportunities and waited for pullbacks, while insiders have made over $100 million on them.
It's time to adapt
It's time to understand that cycles will never be exactly the same, Altcoins are not just the Beta of BTC or ETH, they are a completely different niche market, bringing more risks and more opportunities.
You can't just continue to long $DOT or $ATOM just because BTC has retested new highs, as that was effective in 2021.
Don't get me wrong, I'm still bullish on BTC and believe it will remain one of the best compounding assets over the next 10 to 20 years, but the returns will be similar to stocks, no longer the easy 200% annual growth.
Conclusions to remember in this cycle
1. Holding and waiting for prices to rise is a fool's errand, if you don't sell at the right time, you're done. @MustStopMurad has been telling you to hold, and almost all of his meme coins have dropped 80%-90% from ATH.
2. You need to have a clear sell strategy. I know this may sound harsh, but that's how the market is, you have to determine when to exit before making a trade.
3. Narrative rotation, we've recently experienced crazy market rotations from meme coins to AI Agents, to $TRUMP and so on. If you didn't keep up at any point, you can almost guarantee that most of your gains have been wiped out. Always follow the market narrative and remember that liquidity is limited.
4. "Timely" is better than "early". Don't overthink, find the right time to enter, but don't be too anxious to wait.
5. Always convert a portion of your profits into stablecoins, no matter how much you believe in a protocol, continue to accumulate BTC, which is still better than most stock or real estate opportunities.
Honestly, I don't know if we'll go down or up next, I'm positioned on both sides. If the market goes down, I'll continue to buy more BTC and $ETH.
If the market goes up, I have enough Altcoins to avoid FOMO, and I know I can profit from trading and help my followers.
I hope this cycle hasn't ended yet, the current BTC consolidation will determine our direction for the next 2-3 months.
