First, this cycle is very difficult. But the fact is, each cycle is more difficult than the last. You have to compete with a larger crowd, and the number of experienced participants is also increasing. If you didn't hold most of your BTC or SOL during the bear market, then you may not have made any money and are in a mess. So why is this cycle so difficult?

First, this cycle is very difficult. But the fact is, each cycle is more difficult than the last. You have to compete with a larger crowd, and the number of experienced participants is also increasing. If you didn't hold most of your BTC or SOL during the bear market, then you may not have made any money and are in a mess. So why is this cycle so difficult?

1. Post-Traumatic Stress Disorder

We have two examples of major Altcoin cycles where most crashed 90-95%, and due to the liquidations of Luna and FTX, the entire industry was infected, with prices potentially falling even lower than they should have. This post-traumatic stress disorder has deeply impacted the crypto natives. No one wants to hold anything long-term because they never want to lose a big chunk of their portfolio again. Participant emotions are more volatile, and everyone is constantly looking for the top of the cycle.

The psychological impact is not limited to trading behavior, but also affects the way the entire ecosystem is built and invested in. Projects now face stricter scrutiny, and the trust threshold has doubled. This has both positive and negative impacts: while it helps filter out obvious scams, it also makes it harder for legitimate projects to gain attention.

2. Innovation

There is more iterative innovation, and the infrastructure is constantly improving, but there hasn't been a 0->1 and mind-blowing breakthrough like DeFi. This makes it easier for people to argue that crypto hasn't progressed, leading to more "crypto is going nowhere" narratives. The innovation landscape has shifted from revolutionary breakthroughs to incremental improvements. While this is the natural evolution of any technology, it poses challenges for narrative-driven markets. We still lack the breakthrough applications that are necessary to bring crypto to hundreds of millions of on-chain users.

3. Regulation

The corrupt SEC has caused severe damage. They have hindered the development of the industry and prevented certain sectors (such as DeFi) that could have had more PMF and wider adoption from further developing. They also prevent all governance tokens from passing any value to holders, thus creating the narrative that "all these tokens are useless", which is true to some extent. The SEC has driven away builders (see Andre Cronye's description of how the SEC forced him to resign), prevented TradFi from interacting with the industry, and ultimately forced the industry to raise funds from VCs, causing unhealthy supply and price discovery dynamics where value is captured by the few.

4. Financial Nihilism

All of the above factors have contributed to financial nihilism becoming a major factor in this cycle. The "useless governance tokens" and the high FDV, low float dynamics caused by the SEC have led many crypto natives to turn to memecoins in search of "fairer" opportunities. In today's society, where asset prices are soaring, fiat currencies are constantly depreciating, wages can't keep up, and young people have to gamble to get rich, memecoins lotteries are very appealing. Lotteries are always appealing because they offer hope. Because gambling has PMF in crypto, and we have better technology for gambling (e.g. Solana and Pump.fun), the number of tokens being issued has skyrocketed. This is because many people want to engage in super gambling. There is a demand for this. "Degenerate" has always been a term in crypto, but in this cycle it has become a widely understood term. This nihilistic attitude manifests in the following ways: - The rise of a "degenerate" culture becoming mainstream - Shortening investment horizons - Increased focus on short-term trading rather than long-term investing - Normalization of extreme leverage and risk-taking - "Whatever" attitude towards fundamental analysis

5. Experience from the Previous Cycle is a Hindrance

The past few cycles have told you that you can buy some Altcoins during the bear market and eventually get rewarded by outperforming BTC.

Almost no one is a great trader, so this has been the best choice for most people in the past. Overall, even the worst alternatives had a chance. This cycle is a trader's market, with sellers better suited than holders. Traders have even made the biggest gains in this cycle through HYPE airdrops. The first hype cycle of the AI Agent is an example. This may be the first time people felt "this is the new thing we've been looking for". It's still early, and the long-term winners may not have emerged yet.

6. BTC Has New Buyers, but Altcoins Mostly Don't

The divergence between BTC and everything else has never been more pronounced. BTC has unlocked bids from TradFi. It now has an incredible new source of passive demand, with central banks around the world discussing adding it to their balance sheets. Altcoins are having a harder time competing with BTC than ever before, which makes sense, as BTC has a clear target market cap comparable to gold. Altcoins don't have new buyers. Some retail has returned at BTC's new highs (but they bought XRP), but overall, the flow of new retail is insufficient, and crypto still has a reputation problem.

7. The Changing Role of ETH

The decline in BTC's dominance has been largely driven by the growth in ETH's market cap. Many believed that "Altcoins" were triggered by the rise of ETH, but this heuristic approach has not worked so far in this cycle, as ETH has performed very poorly due to fundamental reasons.

I still believe fundamentals will ultimately prevail in the long run, but you have to truly understand the projects you're supporting and how they will genuinely outperform BTC. There are candidates, but currently, there are only a few. Look for projects with the following characteristics: - Clear revenue models - Actual product-market fit - Sustainable token economics - Strong narratives to complement the fundamentals (for me, AI and RWA are suitable) I believe that due to the relaxation of US regulation, those with stronger fundamentals and PMF can ultimately add value to their tokens, which are lower-risk investments. Revenue-printing protocols have now been established and are working well. This is very different from the "greater fool" theory that dominated many token models previously. You can choose to become a better trader, try to develop an edge, and focus on doing more short-term trades, as this market does provide many consistent short-term setups. On-chain will provide larger multipliers, but the tolerance for downside risk will also be lower. For the majority without a clear edge, a barbell portfolio is still a viable approach. 70-80% in BTC and SOL, and allocate a smaller portion of your funds for more speculative investments. Rebalance periodically to maintain these ratios.

You need to understand how much time you have for cryptocurrencies and adjust your strategy accordingly. If you are a regular person with a job, it is not feasible to compete in the trenches with a Zoomer who sits there 16 hours a day. This time, passively holding underperforming Altcoins and waiting for your turn is not going to work.

Another strategy is to try to combine different fields. Have a solid asset-based investment portfolio, then consider farming airdrops (now more difficult, but opportunities with lower risk still exist), or identify emerging ecosystems and get prepared early (HyperLiquid, Movement, Berachain, etc.), or focus on the selected category.

I still believe that the Altcoin market will grow this year. The current situation has been determined, and we are still related to global liquidity, but only a few industries and a smaller number of Altcoins will surpass BTC and SOL. The rotation speed of Altcoins will continue to accelerate.

If we print money crazily, then we may see a situation closer to the previous traditional Altcoin season, but I think this is unlikely, and even in this case, most Altcoins will only provide market average returns. This year, we will still see the launch of some major Altcoins, and liquidity will continue to diversify.