In the past week, many friends have called me to ask about the market. I think it is necessary to make my thoughts public and disclose my views on the current market situation.
What has changed?
【Future progress】
My family members who have been following me for a long time know that I am a long-term investor. Therefore, starting from 2019, I have an annual strategy that is updated every year. This is probably the one for 2024-2025, for discussion with my family members.
1. DeepSeek bursts the bubble
Once DeepSeek came out, don’t worry about whether it really took 5 million US dollars to train such an AI, but the narrative is this: [algorithm improvement] has defeated [computing power improvement] at least in the short term.
Don’t worry about whether this thing is real or not - since the market unanimously recognizes the 500w thing, you should treat it as real.
At the end of 24 years in the crypto industry, apart from the meme, I am reluctant to admit that objectively there is only one last narrative left: AI Agent, which is the hope of the whole village.
However, no one expected that AI Agent would be ruthlessly defeated by DeepSeek, which is on the real AI track next door.
For example, DS's team is full of people with an IQ of 200, fresh graduates from Peking University and Tsinghua University, and winners of International Mathematical Olympiad medals.
In contrast, in our industry, we are courting unemployed second-tier programmers and AI engineers who were laid off by large companies or are secretly working on a side job, so sometimes we are forced to have an IQ of 50.
so…
On January 27, I took profits on all my AI token positions with tears in my eyes. I didn’t sell at the highest point, and I sold them after a big retracement. It would be a lie to say that I didn’t feel sad.
But the more cruel fact is that this thing has turned our entire AI Agent track into a clown, and this is probably true.
The reason why "narrative" is "narrated" before "events" is because the "events" have not yet landed, and can only rely on "narration". Once the story can no longer be told, the decline of the track is really irreversible.
II. The President and His Mob
I don’t know how everyone felt during the Chinese New Year, but my personal experience was that many friends and relatives asked how to register for BN or OKX, simply because they wanted to buy Trump Coin.
The last time they were so crazy was during the National Day, when they wanted to open accounts and invest in A-shares.
Shanghai Composite Index Trend Source: Tencent Securities
If I remember correctly, these warriors who entered the Big A on October 8th are still hanging on the top of that mountain.
After taking profit from AI, to be honest, the more I thought about it, the more scared I became. Then I saw this post.
In summary: The president seems to be losing money, but there are two possible reasons:
1. He doesn’t make money in the way you can see
2. He is a fool
Anyway, I know the answer cannot be 2.
Yes! Memes are now used by the president, and he can also make money from unknown channels.
To be fair, are the memes we play worthy of sitting at the same table with Trump?
Can a hippopotamus from Thailand, a squirrel from the United States, and a bottle of longevity medicine that prolongs the life of flies really sit at the same table with Trump, who is firmly in the Oval Office?
It’s Chinese New Year, and there’s one table for adults and one table for children.
Adults drink famous liquors, while children are only worthy of drinking Sprite.
So, I basically sold all the memes I had on that day. My meme positions once had huge floating profits, but because I took the initiative to lower my IQ to 50, I did not complete the great retreat, but kept joining the great revolution.
It feels like a dream.
3. A top signal: A high school student earns tens of millions
I believe that all my family members who play memes, and even those who don’t, have heard about this recent legendary story.
A high school student joined the game and sat there for a month. He bet on Jelly and won tens of millions at a very low cost.
Of course, as time went on, it became more and more outrageous and there were more and more rumors. I'm not sure if it's 100% true, but I know that the taste is right.
Looking back at the 1-3 days before the 69K historical peak in 2021, I was sighing:
- Internships, whose returns easily beat fund bosses
- ENS grassroots community contributors received tens of millions in airdrops
At that moment
Just like
Right now
I liked this post. A TIME editor (or maybe a hacker) can immediately gain countless SOLs with just one fake tweet.
I ask you, what does this mean?
It’s not that it’s impossible to make money - experts can always make money, even at the bottom of a bear market.
But if the subject becomes an ordinary person:
The intern brother makes a lot of money, the ENS contributor brother makes a lot of money, the high school brother makes a lot of money, and the editor brother makes a lot of money.
Means: [At this moment, everyone's hands are particularly loose]
Friends who often play cards know that they will only become loose-handed when the floating profits are extremely high.
This represents the true peak of the greed index.
This is a super top signal.
So, on the 30th, I liquidated almost all of my altcoins, leaving only BTC and a small portion of mainstream coins ETH/SOL/DOGE/exchange coins.
Although there are still losses, at least there are some small fruits of victory left.
I admire Gao Zhongge's brilliant operations, and I am also in awe of the market rules of this alternative investment product.
IV. Questions about BN and BN’s responses
Well, to be honest, I don’t want to talk about this topic.
As a former CEX practitioner, I have seen this consultant-listing-shipping drama too many times. From the initial anger to the gradual numbness, I am no longer surprised.
However, in the past, this thing was placed under the table and regarded as "petty corruption is the lubricant of development";
It’s like “when the water is too clear, there are no fish”, the water is slightly turbid beneath the surface, which is part of the rules of the game.
After all, we are not living in a utopia, nor in a vacuum hometown.
However, the most taboo thing about this thing is to bring it from under the table to the surface.
I have no intention of criticizing BN or Yijie, because this problem exists in almost every CEX.
If this happened in the traditional world, to put it in an exaggerated way, it would be a huge scandal that could cause hundreds of people to be laid off and dozens of people to be imprisoned.
Maybe it would be better for Yijie not to respond, learn from the celebrities to handle the situation calmly, and give retail investors some hope.
However, our industry is full of skeptics, and a huge scandal is like a heavy hammer that hits every holder's heart hard.
It shattered the faith of many people.
Our industry really needs "God" because it is maintained by consensus.
But when everyone discovered that the public servants under the original "God" actually wanted to make some quick money, their faith suddenly disappeared, and they soon projected it to the relationship with God - all the altcoins on BN are now facing huge suspicion and eyes from retail investors. Since AI and HOOK are like this, are other coins really better?
5. Future Scripts
If we follow the view of carving a boat to find a sword, this decline is very similar to that of May 19. I suggest that everyone review the trend after May 19.
Trends after 519 in 21 years, source: Bitfinex
If we follow the script of May 19, what follows will be a repeated shock plot that will last for two months until even the most loyal people are washed out, and then a new $Bitcoin ATH will be ushered in.
Of course, some people suspect that this is the 12.4 drama, AKA the beginning of the bear market.
Just from my inner inclination, I hope this is May 19th.
After all, the U.S. national strategic reserve of Bitcoin is becoming clearer. Never underestimate the huge influence of this matter, really.
Even if Bitcoin reaches 85K-88K, I would still be willing to add some more positions.
6. My position distribution
My current position:
- 40% BTC
- 20% mainstream coins (ETH, SOL, DOGE, BNB/MNT)
- 40% Stablecoin Investment
Bitcoin is my eternal belief. I think I will never sell BTC and I will never do short-term trading again.
Reasons to keep ETH:
To be honest, faith in ETH is waning.
However, objectively speaking, the president’s DeFi project is buying ETH.
I don’t know how many of my family members trade U.S. stocks, and many of them regret not following the orders of [Nancy Pelosi, the Capitol Hill stock goddess].
Image source: CommonWealth Magazine
Pelosi’s highlight was once Speaker of the House of Representatives, which is only the third-ranking position in American politics.
And now Trump is the real president. This crypto president is holding a large position of ETH (although it has been deposited in the untraceable Coinbase custody). This amount should not be underestimated.
Secondly, ETH has fallen to where it is today, and I think it has reached the extreme of FUD, and there may be a thought that things will turn around when they reach the extreme. I can’t buy when no one is interested, but at least I shouldn’t sell when no one is interested.
Reasons to keep SOL:
- There is a small probability that ETFs may be;
- However, the cooling of AI narratives and the short-term sluggishness of MEME are two small clouds of despair.
Reasons to keep DOGE:
- Grayscale has launched the Dogecoin Trust, and Doge also has a small probability ETF
- Also, Musk, is working his ass off in the DOGE department;
- I think I can sleep well if I am in the same car with the world's richest man and the director of the U.S. National Development and Reform Commission.
Reasons to keep exchange tokens:
Let me be frank: there is no possibility for the exchange to step onto a bigger stage.
Coinbase will not list BNB, and Binance will not list MNT.
But the exchange is the only institution in our industry that can make money and give back profits;
If the bear market really comes, exchange tokens are relatively more resistant to declines, and an occasional IEO can even make up for the losses. This is the only way to survive the bear market.
7. Cruel view: The good days of Lao Deng are over
In addition to the above, I probably won’t hold a large position in any altcoins in the short term - the reason is very simple, inflation is too fast.
The speed at which new users and new funds enter the market is simply not as fast as the speed at which these coin-issuing maniacs print coins.
Source: Decrypt
There was a statistic a few days ago that the most powerful account on pump fun issued 17,000 coins in 3 months.
Not 170, not 1700, but 17000! His contribution alone may exceed the total amount of tokens issued during the entire bull market in 2017.
Why did Lao Deng’s investment strategy fail?
So many choices!
Too many angles!
Even at the same angle there are N CAs.
How could the old Dengs have the chance to copy it?
The favorite strategy of old Dengs: buy a mid-level copycat at 100M or 200M.
Hold it for 2-3 months and bet on it outperforming Bitcoin.
However, it is now probably far from even outperforming ETH.
Marshal P’s favorite strategy: buy a project with a valuation of 10K in the inner market.
It ran away after 30 minutes.
A real man never looks back at an explosion.
Obviously, in today's era of token inflation, Marshal P is far superior to Lao Deng.
I am not calling on everyone to become a young P player, I just hope that everyone at least does not become an old Deng.
8. Best Position: 50% Bitcoin + 50% Stablecoin Investment
In addition, I sincerely recommend that everyone hold a certain amount of U to get through the next period of time.
You have to accept the fact that no one can really sell at the super top.
There is one on the top of the mountain every 4 years. Among more than a thousand days, you are asked to find a day to sell it. The probability is 1/1000. Naturally, only a few people can do it. All of them are super lucky.
At this stage, half-position is the best option.
You invest 50% of your capital in financial management, and we don’t talk about mining or arbitrage.
Let’s just do the simplest Ethena USDE. Now Pendle can still offer an interest rate of 18%.
If you are too lazy to use Pendle, you can just put it into AAVE or mainstream CEX for financial management and still have 10%.
The other 50% are mainly in Bitcoin, quietly waiting for the day when the US Bitcoin strategic reserve arrives.
There is interest cash flow,
There are dreams and beliefs,
You must be comfortable.
Package.
Of course, you can cut out another 5% and add some altcoins that you truly believe in, whether it is ETH, SOL, DOGE or any coin you believe in.
Cut out another 5% of your funds to play PVP for a while. If you win, enjoy it. If you lose, just treat it as consumption and maintain your hand feel. Isn’t that great?
Finally, this distribution of Tai Chi diagram is formed.
PS: This is also how I want to slowly adjust my holdings. Source: 0xTodd
IX. Final
I am quite satisfied with my current position. After all, this is my eighth year in the crypto industry, and I have some experience after so long.
The only thing I feel a little regretful about is that I was playing in Osaka during the New Year holidays and was too lazy to organize these thoughts and post them out right away.
The same strategy may help many people if you mention it a few days ago, but if you mention it a few days later it becomes a post-mortem review.
But it is never too late to mend the situation.
I hope every family member can get their own big results in the crypto market.
Of course, if you can't get big results, then keeping some small results and earning more spiritual and social wealth will not be in vain.
Finally, I wish my family members a happy Year of the Snake, with the golden snake dancing wildly.
Todd
February 5, 2025
