Answers to questions about the market crash (Part 2)

Some readers asked why the risk aversion caused by the Middle East war caused funds to flee crypto assets.

I have discussed this issue with you before.

I think the main reason for this situation is that in the eyes of the forces that dominate the rise and fall of crypto assets, crypto assets are risky assets rather than safe haven assets.

Before 2021, crypto assets were basically on the margins of the entire financial ecosystem. At that time, the main players in this ecosystem were retail investors. At that time, many retail investors were still influenced by the ideal description of Bitcoin by Bitcoin predecessors, and regarded it as a safe haven asset, especially a safe haven asset to hedge against fiat currency risks.

But starting in 2021, traditional capital led by Wall Street capital began to enter this ecosystem and gradually became the dominant force in the market.

In the eyes of Wall Street capital, the characteristics of crypto assets are similar to traditional stocks, so the factors that affect the stock market and how they are affected are also transmitted to the crypto market at the same time-----this phenomenon has become increasingly obvious in the simultaneous rise and fall of US stocks and crypto assets since 2021.

Therefore, as early as the last bull market, we gradually classified crypto assets as risky assets similar to US stocks.

However, in the process of geopolitical interference and the increasingly intensified East-West division in recent years, I think another characteristic of crypto assets has begun to emerge more and more------that is, its barrier-free communication with the world makes it more and more likely to become a potential, default universal asset under human interference.

Its universality is not inferior to gold, but its convenience and transaction efficiency are much higher than gold.

A recent international news report said that a crypto asset of nearly $20 billion was transferred to Russia. But because the transaction was conducted through a centralized exchange, it was eventually frozen.

But if the two parties to the transaction are directly transferring money, it is likely to be another result----which will fully reflect the convenience and efficiency of crypto assets.

So I am also wondering, if crypto assets are increasingly used in international activities under the East-West division in the future, will its "bridge role" become an important factor supporting its price?

Some readers asked if CRV, ARB and MAGIC have all fallen into the fixed investment range, should I buy or not?

I have never made a fixed investment in ARB, but I bought some when the price was relatively sluggish before and exchanged some with Matic.

I have not made any fixed investment in the coins I have made before. The reason I did this is mainly to keep some funds to participate in new projects that may appear in the future, and to get some benefits from some projects.

When it comes to discovering new projects, although it is very difficult and often disappointing, curiosity always makes people want to explore around.

I remember that I mentioned the application farcaster.xyz in my article some time ago. The first impression it gave me was too ordinary, but I still patiently tossed around for a long time, endured its a lot of inexplicable operations, and finally registered its account.

After entering this ecosystem and experiencing it, I gradually felt that this ecosystem was different from existing social applications:

It is more geeky and has a bit more "elite" feeling.

It is not so noisy, but it is not lacking in enthusiasm or hot spots.

Its members have relatively strong cohesion. Once a new thing or a new topic forms a new consensus, a new community and network will soon be formed.

It feels more like a social application customized for the crypto ecosystem.

In the last round of bull market, we have also seen some typical social applications: such as Mask. But many of those applications just forcibly implanted tokens in traditional social applications, and the applications themselves do not have many characteristics of the crypto ecosystem.

Farcaster is much stronger in this regard. Will some interesting new projects and new applications be born in the Farcaster application?