Cryptocurrency KOL Dayu recently posted a tweet discussing the phenomenon of new public chains in the cryptocurrency market offering new “casinos,” while the number of “gamblers” has decreased. The author explores possible reasons for this phenomenon, noting that with the application of AI technology in various fields, the speed of market changes will be faster, accompanied by the high risk of bubble formation.
Table of Contents:
1. The explosion of casinos after Ethereum
2. The explosion of casinos, but fewer gamblers
3. Why are altcoins plummeting?
4. Is the “change of three views” outdated?
5. Future speculation: AI sucking blood in the cryptocurrency circle
Conclusion 1:
Conclusion 2:
The underlying layer of the cryptocurrency circle is asset issuance, essentially creating 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, it has become weak.
After the success of the ETH model, with the launch of hundreds of new public chains such as EOS, DOT, SOL, and ARB OP, hundreds of new casinos have been created.
The gameplay of these new casinos is not innovative. What the fastest new casinos claim to do can actually be done in old casinos—especially now when GAS is only 1, it can even be done more safely.
However, the number of gamblers in the entire industry has not increased. The total amount of chips purchased in the casinos has only slightly increased compared to the peak of the bull market in 2021, from 136 billion to 150 billion.
More interestingly, each new casino is still collecting membership fees. The owners and developers build the casinos and invite all the gamblers to buy passes for their casinos. Although the passes have no value, there may be other gamblers who want to speculate on them.
Currently, we can see a situation:
From 2021 to the present, 300 new public chain casinos have been launched, and each one has activated passes for its casinos. But what each casino does is basically the same as the old casinos: DEX, lending, and MEME, with no new elements.
The key point is that the number of gamblers has decreased. According to the Google Index, the number of people currently interested in BTC and ETH is much lower than expected, similar to the bear market. The grand BTC bull market did not attract much attention, even before and after the approval of ETF, it was 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 to be very low—perhaps the situation after the ETF approval for ETH has already been mostly priced in.
I remember conducting several surveys on Twitter in April and found that the proportion of full positions and 80% positions 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 meaningful—because if everyone is on the bandwagon, waiting for altcoins to rally, and altcoins themselves have been estimated from various angles in my previous articles to have terrifying supply pressures, such as a supply pressure of 3 billion in May and around 2 billion in June, which will continue to increase in the future.
Because from project parties, market makers to exchanges, and retail investors, everyone knows that altcoins are just a speculative game, especially MEME. So when everyone is on the bandwagon, as long as they don’t rise, it is dangerous for altcoins.
Investing is about being friends with time, and holding altcoins is the enemy of time.
Perhaps this is why I believe that any staking should not be participated in. If you participate, you are likely to become the one providing profits. For example, those who participated in RBN staking were deceived by the manipulators—they manipulated the price of the coin through AEVO, deceiving Heyi Binance and cutting the leeks. The future of the project is already unimportant.
Countless altcoins are surging on the road, and every air is inviting you to get on board, but the blind donkey that runs with its eyes covered can no longer bear the burden, staggering and scarred, unable to catch up.
The ingenious model of low circulation and high FDV, coupled with the issuance of numerous coins during this bull market, is faced with leeks who are eager but thin, with a pitiful scene.
A traditional view is “change of three views,” but I believe that this saying has actually become outdated long ago, unintentionally.
A few years ago, people were still in the innocent and ignorant period, and rallying was indeed the most effective method. But by this year, if you have played MEME on the chain, you will find that rallying can attract attention, but more and more people can calmly view the project’s independent rallying.
It is not that the leeks have become more sophisticated, but they are really afraid of being cut. Behind the “change of three views,” long-term upward movement is required to form the three views. But now, if you look at all the cryptocurrencies on the internet, you will hardly find the situation of a bunch of hundredfold coins like Binance in 2021. Basically, it is good enough for Binance to rally by one or two times.
As for the on-chain situation, let’s not mention it. The lifespan of a MEME can be as short as a few minutes or as long as a few days. One second, it is blowing up in the sky, and the next second, it disappears.
With too many cuts, someone has summed up the typical rule of this bull market, which is not to pick up each other.
Therefore, behind the expectation of the “change of three views,” consider three questions:
If you are a manipulator, when the leeks are cautious and fearful, how confident are you that your rallying will not turn into others selling?
If you are a leek, do you have confidence that the manipulator is super rich and has a big picture, and will only rally and not dump? Or maybe he wants to run first.
If you are a VC, are you willing to wait for the project party to act, the manipulator to rally, and the retail investors to FOMO, or would you rather sell first and then decide after unlocking your 10x-100x chips?
If everyone thinks like this, altcoins will be in trouble. It will be a highly tense game of running the poison.
There will still be a bull market for altcoins, such as when the excess liquidity flows in after interest rate cuts, but that will take a long time. But by the time that happens, the vast majority of current project parties will face massive unlocks, with an expected monthly supply of over 5 billion. It is difficult for the market to absorb a 50 billion supply pressure. I can see it, and others can see it.
This will lead to the market running even faster, and the most qualified people to run are the chips locked by VCs and project parties. So considering that since March this year, more and more project parties have been unlocking, it means that altcoins have become a game of running fast, and those who run slowly will fall into the poison circle.
If you want to participate, it seems that you can only play with major coins like BTC and ETH, or participate in altcoins with very sensitive movements. The key is to prefer less profit and avoid large losses. Be cautious when getting on board, don’t go all in and out, enter little by little, exit little by little, and it will be much easier.
If the market has already entered 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. The way to overcome this difficulty is to control your position. Hold your coins steadily, don’t go all in and out when getting on board, 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 liquidity, the future deep bear market will be even more terrifying.
After the approval of the ETF for BTC, BTC will become a target in the US stock market, a high-risk asset. However, currently, its appeal is far less than that of US tech stocks. NVIDIA continues to reach new highs, while companies like Apple, Microsoft, and Google are constantly rising.
Behind this is actually a significant logical change—the wild surge of the cryptocurrency circle has passed.
A mathematical question:
You may think that ETH is a “civilization-level innovation,” but unfortunately, it only has a few valuable applications such as DEX and lending on it, and other things, such as the top PREP DEX, may have a few hundred active daily users, which is really far from being a “civilization-level innovation.”
Yet, 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. People in the cryptocurrency circle can easily shout: Bitcoin will be $1 million in the future!
But friends, after entering the US stock market, BTC’s market value is 130 billion. If it doubles, it will be comparable to NVIDIA. Now NVIDIA is generally considered to be the cornerstone of the AI era, and the AI era is considered to be the third civilization-level leap after the steam revolution and the internet.
Don’t even mention $1 million, if it rises to over $100,000 and surpasses NVIDIA, it will seem less reasonable.
Now let’s summarize:
1. The valuation of some projects is not low. The head value coins in the cryptocurrency circle, BTC and ETH, compared to the value targets in the US stock market, have already had relatively high valuations.
2. The ecological projects have a huge bubble. The ecological projects in the cryptocurrency circle generally have huge bubbles and massive supply pressures. People didn’t stop playing altcoins because they suddenly became clear-headed, but because they were hurt by altcoins and then went to play MEME.
The market value of altcoins is 10 billion, with only 30 active users on the chain. How much value is there?
3. MEME is not sustainable.
MEME is about consensus and emotions, with PEPE being the most prominent representative. But after it surged to tens of billions of dollars, if it wants to surge again, it will require more and more capital. Without the massive funds of 2021 and top KOLs like Musk promoting it, relying on the community shouting 100 billion to each other—this is something I have seen too many times in the NFT family group, and every time, the loudest shouters were the ones who suffered the most.
It is well known that I love MEME the most because I am personally very sensitive to emotions, communities, markets, and narratives. Therefore, compared to value coins, I have earned more money from it. But precisely because I understand MEME, I don’t think MEME can withstand a bull market for altcoins.
How speculative the emotions of MEME are and how fanatical the participants are, the crash will be equally brutal. Please believe this, it is an objective law of this world.
4. AI will continue to suck blood. The AI narrative in the US stock market is attracting huge capital from around the world, and they are revolutionizing. All of this will continue against the backdrop of low-value and high-bubble conditions in the cryptocurrency circle.
What if the US stock market crashes? I’m sorry, the cryptocurrency circle will only crash even harder.
In conclusion, the approval of the ETH ETF will only be a short-term positive. The joint efforts of the multiple parties mentioned above will likely force the market to move in the direction of least resistance.