Alpha First:
Retail investors have not participated in this cycle. Your trading counterparts are seasoned veterans. Follow the consensus.
Every war begins in the same way. The elders become embroiled in irreconcilable disputes over faith, power, and resources, and the ultimate solution is to send the youth to slaughter one another. We all know the saying, “Elders declare war, youths go to die,” but no one talks about what happens after the war.
As the war continues to consume resources and manpower dwindles, countries are forced to conscript from older age groups. Suddenly, trenches are filled with teenagers and middle-aged men. By the final stages, you will see children and the elderly trembling as they grip rifles. This is our current situation in the cryptocurrency trenches.
We have long passed the peak moment of 2021. The Google search trend for “cryptocurrency” peaked during the summer of DeFi in 2021 and has not recovered since. Even when the “crypto brothers” helped Trump get elected, the search interest for “cryptocurrency” only returned to 61% of its previous high. It must be said that there is almost no fresh blood in the crypto trenches. If you are reading this article, congratulations, you are one of the “elders” still fighting in the trenches. Now, let’s devise a survival plan.
Don’t Be Afraid to Follow the Consensus
The phrase “consensus is always wrong” is a common fallacy; knowing when to follow the crowd is a subtle art. Remember when Warren Buffett started buying Apple stock in 2016? It was already the largest publicly traded company by market cap, not his typical “deep value investment.” In this market, you need to be a compliant sheep and not go against the trend.
In past cycles, the influx of new retail investors lowered the overall IQ and experience level in the crypto trenches. This allows you to easily leverage your experience to sell new Ponzi schemes to them. If we had retail participation at the scale of 2021, Launchcoin could easily break the $1 billion market cap, but now it has barely fallen back below $400 million before retreating.
Remember, crypto Twitter is just a niche corner of the industry. We are all reading the same articles and complaining, staring at the same 5-minute charts on DEX Screener, trading the same tokens. This also means that projects like Launchcoin are already the fifth generation of harvesting memecoins we have seen; people are simply not interested in playing this game again.
The opposite phenomenon is equally valid. This is why Bitcoin and Hyperliquid perform better than other networks. Everyone in the trenches has reached a consensus: we indeed have faith in these tokens. Bitcoin has never let us down, and Hyperliquid is also an excellent product. As long as these tokens maintain a positive consensus sentiment, you can continue to accumulate.
In this cycle, new capital inflows into consensus assets like Bitcoin and Hyperliquid will come from institutional investors and seasoned crypto traders who have given up on countertrend strategies.
Do Not Go Against the Trend; Act Early
Today, the market lacks inexperienced retail investors, which makes it difficult to profit through countertrend strategies. In this cycle, your trading counterparts are as smart as you. If your countertrend trading has not yet begun to gain consensus, it will not succeed.
Ethereum continues to underperform against other networks. This is why supporters of .eth cannot change Ethereum’s narrative. We have heard Bankless drone on about the same clichés countless times. Unless I see Vitalik tattoo Ethereum’s L1 scaling roadmap on his forehead, you will never convince me to buy that “cursed coin” again. I was smart enough to swap Ethereum for Bitcoin before most of you (early 2023), but I still regret holding it for so long. I believe others in the market feel the same way.
Rather than going against the trend, it is better to get involved early in areas that have not yet been discussed. Do not bet on your ability to fight against the market; instead, bet on your ability to research and unearth potential projects more diligently. The real advantage lies in discovering quality targets before consensus forms:
- Invest in new networks with incomplete bridging functions.
- Buy small-cap tokens with high slippage.
- Look for projects with poor user experience but excellent creativity.
Reach out to friends who are deeply involved in the Bitcoin and HyperEVM ecosystems and ask them which emerging projects they believe have not received enough attention, then delve into project documents. The strategy is not to oppose consensus but to dig deeper into consensus faster than everyone else.
Where Will Institutional Funds Flow?
Although retail investors are watching from the sidelines, institutions are actually entering the market. The good news is that institutions are essentially “consensus market participants”:
- They cannot invest in illiquid assets, needing to focus on the largest assets.
- They cannot prove to investors the rationale behind “countertrend bets on memecoins”; they have a fiduciary responsibility to make sound decisions.
- They act slowly but with large amounts of capital, creating predictable trends.
Moreover, institutional movements are relatively easy to predict, as large-scale business models only have two forms:
- Asset management/custody: Institutions like BlackRock wish to custody the largest possible assets to achieve the highest returns. Their ETF capital inflows will first favor Bitcoin, potentially spilling over to other large-cap assets like XRP.
- Volume/volatility: Institutions like Citadel Securities profit by trading more shrewdly than you on order books. They need markets that are liquid and have reasonable volatility, which is exactly what Hyperliquid provides in the derivatives space.
So ask yourself: what are the custodial assets with the largest consensus? Bitcoin. Then ask yourself: where is the consensus venue for new assets on exchanges? Hyperliquid. Do not try to outsmart institutions; sometimes things are that simple: place yourself where institutional funds are going to flow, not where you think they should go.
Possible Areas for Retail Entry
The heat of AI is still rising. Finally, leave a hedging strategy. The search interest for “AI” has continued to rise to new highs nearly three years after the launch of ChatGPT. The intersection of cryptocurrency and AI could attract capital inflows.
However, how it will develop specifically remains unclear. Will retail investors truly buy into crypto projects, or will they continue to chase NVIDIA? Will they purchase crypto projects like Bittensor, or Sam’s Worldcoin? The AI narrative might be the only catalyst strong enough to bring retail investors back into the crypto market. But it may only benefit certain projects rather than resulting in a broad increase.
The Advantages of Veterans
The absence of retail investors does not mean this bull market cannot be profitable; it simply means it will reward different skills. The veterans still in the trenches have the following advantages:
- The ability to identify shifts in trends before narratives are fully formed.
- Understanding of market cycles and judgment on when to take profits.
- A network for sharing information with other veterans.
- Risk management strategies tested in real combat.
This cycle will reward patience, discipline, and the ability to follow consensus while positioning for emerging narratives early. It will not reward countertrend bets against established trends or attempts to resurrect dead narratives.
Fighting in the crypto trenches is not easy, but for those who adapt to the new battlefield environment, the rewards will be substantial. The veteran legion may be smaller than the retail army of 2021, but we are smarter, more experienced, and better at capturing value.
