Cryptocurrency KOL Dayu recently posted on personal Twitter, pointing out the phenomenon of new “casinos” emerging in the current cryptocurrency market while the number of “gamblers” decreases, discussing possible reasons behind it. The author mentioned that with the application of AI technology in various fields, the speed of market changes will be faster, accompanied by the high-risk bubble.
Table of Contents:
1. The outbreak of casinos after Ethereum
2. The outbreak of casinos, but fewer gamblers
3. Why are altcoins plummeting?
4. Is the “changing perspectives with a positive outlook” outdated?
5. Future speculation: AI sucking the life out of the cryptocurrency circle
Conclusion 1:
Conclusion 2:
The underlying layer of the cryptocurrency circle is asset issuance, essentially opening various types of casinos.
ETH is the most successful asset issuance project. Although its progress has been slow, various gambling methods have emerged from ICO to NFT to the ERC20 ecosystem. However, after several years of continuous development, it has become weak.
After the success of the ETH model, with the listing of hundreds of new public chains such as EOS, DOT, SOL, and ARB OP, it actually provides hundreds of new casinos.
These new casinos have no innovation in gameplay. What the so-called fastest new casinos need to do can also be done in old casinos—especially now that GAS is only 1, it can even be done more safely.
The number of gamblers in the entire market has not increased. The total amount of chips purchased in the casino has only increased slightly compared to the peak of the bull market in 2021, from 136 billion to 150 billion.
More interestingly, each new casino is still charging membership fees. The bosses and developers have built the casinos and invited all gamblers to buy tickets for their casinos. Although these tickets have no value, there may be other gamblers who want to speculate on them.
Now, we can see a situation:
From 2021 to now, 300 new public chain casinos have been opened, and each one has launched its own casino tickets for gambling. However, the activities in each casino are basically the same as those in the old casinos: DEX, lending, and MEME. There is nothing new.
And the key point is that the number of gamblers has decreased. According to the GOOGLE index, it can be seen that the current attention to BTC and ETH is much lower than expected, basically similar to the bear market. This grand BTC bull market has not attracted much attention, even before and after the ETF approval; it is only slightly better than the deep bear market.
As for the search volume of ETH, I originally thought it would be higher due to the expectation of ETF approval, but it seems not. It is very low—therefore, perhaps the situation after the ETF approval has already been largely priced in.
I remember that I conducted several surveys on Twitter in April, and the most shocking finding was that the proportion of full position and 80% position was relatively high, as shown in the figure below:
I conducted several different surveys on multiple platforms, including internal WeChat groups, and the overall results were consistent.
The proportion of full positions is around 70-80%. In retrospect, this survey was still meaningful—because if everyone is on the bus and waiting for altcoins to rise, and I have already calculated the terrifying dumping of altcoins from multiple perspectives in previous articles, such as 3 billion in May and around 2 billion in June, and it will continue to increase in the future.
Because from the project party, market makers, to exchanges, to retail investors, everyone knows that altcoins are just a speculative game, especially MEME. So when everyone is on the bus, as long as it doesn’t rise, it is dangerous for altcoins.
Investment is about being friends with time, while holding altcoins is an enemy of time.
This may be why I think it is not suitable to participate in any kind of staking. Participating will easily become a provider of profits, such as those who participated in RBN staking, who were deceived by the project party—it was a coin that manipulated staking through the pump and dump of AEVO, and it scammed a sister like @heyibinance and caused retail investors to suffer. The outcome of the project is no longer important.
Countless altcoins are surging on the road, and every air is inviting you to get on the bus, but the blind donkey that runs with its eyes closed is already overwhelmed, stumbling and scarred, unable to catch up.
The ingenious model of low circulation and high FDV combined with the intensive issuance of this round of altcoins is faced with a scene of withered leeks, with a pale face and shining eyes.
A traditional view is “changing perspectives with a positive outlook,” but I think this saying has actually become outdated unconsciously.
A few years ago, people were still in the period of infatuation and ignorance, and pumping was indeed the most effective method. But by this year, if you have played MEME on the chain, you will find that pumping can attract attention, but more and more people can calmly view the project party’s solo pumping.
It’s not that retail investors have become smarter, but they have been scared by the experience of being cut. Behind the “changing perspectives with a positive outlook” is the need for long-term upward movement for perspectives to form. But now, if you look at the cryptocurrencies on the entire network, it is difficult to find a situation where there are a bunch of altcoins with a hundredfold increase like on Binance in 2021. Basically, it’s fortunate enough if Binance pumps one or two times.
Not to mention on the chain, where a MEME’s lifespan can be a few minutes or a few days. It can be hyped up one second and withdrawn the next.
There have been too many dumps, so someone summed up the typical pattern of this round of bull market, which is not accepting each other’s bags.
Therefore, the expectation behind “changing perspectives with a positive outlook” raises three questions:
If you are a whale, when retail investors are cautious and fearful, how confident are you that your pump will not turn into someone else’s dump?
If you are a retail investor, do you have confidence that the whale, who is super rich and has a grand vision, will only pump without dumping? Maybe they also want to run first.
If you are a venture capitalist, are you willing to wait for the project party to do things, the whale to pump, and retail investors to FOMO, or would you rather sell first and then decide?
If everyone thinks this way, altcoins will be difficult. It will be a highly tense game of running scams.
There will be altcoin bull markets, such as the influx of liquidity after interest rate cuts, but that will take a long time. But by the time that happens, 90% of the current project parties will face huge unlocking of tokens, with an expected monthly dumping of more than 5 billion—and it will be difficult for the market to absorb the dumping of 50 billion. I can see it, and others can see it too.
This will cause the market to run faster, and the most qualified people to run are the chips targeted by venture capitalists and project parties. So considering that since March this year, more and more project parties have been unlocking tokens, it means that altcoins are just a game of running fast, and those who run slowly will fall into the poison zone.
If you want to play, it seems that you can only play with major coins like BTC and ETH, or participate in altcoins with very agile movements. The key is to be cautious and not to incur significant losses—be cautious when getting on the bus, don’t go all-in, enter little by little, exit little by little, and it will be easier.
If it turns out that we are directly entering a bear market, then everyone will suffer, and there is nothing else to say.
I hardly do short-term trading myself, so it is actually difficult to judge these things, and the way to overcome this difficulty is to control positions. Hold your positions steadily, don’t enter and exit the market with full positions, enter little by little, exit little by little, and it will be easier.
If the cryptocurrency circle does not open new casinos and does not attract new traffic, the future deep bear market will be even more terrifying.
After the ETF approval for BTC, it will become a target in the US stock market, a high-risk asset, but at present, its appeal is much smaller than that of US tech stocks. NVIDIA continues to reach new highs, and companies like Apple, Microsoft, and Google are constantly rising.
Behind this is actually a major logical change—the rapid advancement of the cryptocurrency circle is over.
A mathematical problem:
You can think of ETH as a “civilization-level innovation of humanity,” but unfortunately, it only has a few valuable applications such as DEX and lending. The other things, such as the top PREP DEX, may have a few hundred active users. This thing is really far from being a “civilization-level innovation of humanity.”
This thing is now worth 400 billion.
Tesla, owned by Musk, is now worth 500 billion. It is a behemoth of the future global autonomous driving system, artificial intelligence robots, and massive AI data.
Now, let’s look at BTC. We cryptocurrency people can shout randomly: Bitcoin will be $1 million in the future!
But friends, after entering the US stock market, BTC’s market value is 130 million. Even if it doubles, it will be comparable to NVIDIA—and now NVIDIA is generally regarded as the cornerstone of the AI era, and the AI era is considered the third civilization-level leap after the steam revolution and the Internet.
Don’t talk about $1 million. Even if it rises to over $100,000 and surpasses NVIDIA, it seems unreasonable.
Now let’s summarize:
1. The valuation of some projects is not low. The value coins BTC and ETH in the cryptocurrency circle are compared to the value targets in the US stock market, and their valuations are already not low.
2. The ecological projects have a huge bubble. The ecological projects in the cryptocurrency circle generally have huge bubbles and massive dumping—people did not stop playing altcoins because they suddenly became clear-headed, but because they were cut by altcoins and then went to play MEME.
The market value of an altcoin is 10 billion, with only 30 active users on the chain, and it expects you to digest 500 million in dumping every month. Where is the value?
3. MEME is not sustainable.
MEME is based on consensus and emotions, with PEPE being the most prominent representative. However, after it rose to tens of billions of dollars, if you want it to rise again, the amount of capital needed will be larger and larger. Without the massive capital injection of 2021 and a top-level KOL like Musk endorsing it, everyone shouting for hundreds of billions within the community—the NFT community has seen this too many times, and each time, the one who shouted the loudest suffered the most.
It is well known that I love MEME because I am personally sensitive to emotions, community, market, and narratives, so I have made more money from it compared to value coins. But precisely because I understand MEME, I don’t think MEME can carry a round of altcoin bull market.
How speculative the emotions of MEME are and how fanatical the participants are, it will be equally brutal when it collapses. Please believe this, it is the objective law of this world.
4. AI will continue to suck the life out of the market. The AI narrative in the US stock market is attracting large capital from all over the world. They are revolutionizing, and all of this will continue in the background of the low-value and high-bubble cryptocurrency circle.
What if the US stock market crashes? I’m sorry, the cryptocurrency circle will only crash harder.
In conclusion, the approval of the ETH ETF will only be a short-term positive. The combined efforts of the multiple parties mentioned above will most likely force the market to follow the path of least resistance.