OKX Friends Episode 9｜Dialogue with Madman: Past, Present and Future

The cryptocurrency circle is in turmoil again. Do you still remember the top cryptocurrency "madman" @liujia0224 in 2017?

The "digital currency trend madman" who updates daily and points the way for countless traders with a "responsible, focused, and sincere" attitude.

This public account was once a must-read for Bitcoin traders. As soon as the article came out, 10w+ readings instantly exploded. It can be called the "weather forecast" of the cryptocurrency circle, accurately predicting the ups and downs of digital currencies such as Bitcoin, Litecoin, and Ethereum.

On social media, he was once a top-tier existence, and everyone knew him. His large-scale group has a threshold that is shockingly high (it is rumored that it starts at 10 Bitcoins). Those who can enter the group are either rich or noble, which is an invisible symbol of status.

However, after several rounds of bull and bear cycles, KOLs have also turned to YouTube and Twitter, and rumors about the "madman"'s retirement have also been rampant. Today, the cryptocurrency circle is on the rise again. What is the "madman" who once dominated the cryptocurrency circle doing?

This is the "Friends of OKX" series of dialogue interviews. This series aims to explore the work stories, industry thinking and lessons of KOLs from different backgrounds for novice users to learn and refer to. This issue's interviewer is Mercy @Mercy_okx, welcome everyone to follow~

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Article guide:

Chapter 1: Madman says - past

Chapter 2: Madman says - present, future

Chapter 3: Madman says - advice for newcomers

Chapter 1: Madman says - past

1. Why did you join the circle? When you first knew about BTC, it was only more than 600 yuan?

Mercy, hello, hello everyone, I am very happy to have a space with friends from OKX. Let me first briefly introduce myself. I have a master's degree in finance. I have worked in many large financial institutions, including securities companies, trust companies, and insurance companies. I have a good understanding of various financial products and financial derivatives.

I started to trade stocks in 2008, and it was also at that time that I fell in love with trading. Of course, when I was young, I also experienced the accidents that all traders must experience, such as leverage explosions. The profits that I worked hard to increase by more than 10 times in a few years were gone in a few days. That year was the stock market circuit breaker.

While trading stocks, I was also happy to look for some new trading targets. It was 2013, and I played precious metals trading, stamps and coins, and Bitcoin. What impressed me most was Bitcoin. At that time, an exchange had just been established and was promoting it crazily on Baidu. Registering an account would give you 0.1 Bitcoin. The first time I saw the price of Bitcoin was more than 600 RMB. Then, in the one month that I participated in the transaction, Bitcoin rose from 600 to 8,000 RMB, which was the accelerated bull market in 2013. There was not much money in that wave, and the focus was on A-shares, but I also made 100,000 yuan. Later, as the market fell, I kept buying at the bottom. After tossing around, there was not much money left in the end.

But it planted the seeds of my love for Bitcoin trading. Bitcoin trading has three advantages over A-shares. The first is free transaction fees, the second is 7*24h trading, and the third is t+0. These three points are really heaven for someone who loves trading. But then Bitcoin entered the bear market in 2014 and 2015, and the volatility was too small. It coincided with the bull market of A-shares at this time, so there was not much attention paid to Bitcoin.

By 2016, the A-share market was in a bear market, and I thought of Bitcoin again. Later, I thought, since I couldn't forget it so much, why not try to work in an exchange? So with many years of experience in A-shares and cryptocurrency trading, I successfully entered the exchange as an analyst.

Since then, I have started my own virtual currency life. In today's words, I have entered the crypto industry.

2Why did you start writing public accounts? How to become the first self-media in the currency circle?

Writing public accounts was a coincidence. At that time, public accounts were very popular and were the iconic products that opened the era of self-media. I also like to try new things. At that time, I was just writing for fun in Huobi. The content was all financial, not the currency circle. For an account with zero fans, the second article had 2.5 million views, which made me feel the power of public accounts. So I thought, if I share my years of stock trading experience in the cryptocurrency circle, wouldn’t that be a dimensionality reduction attack?

Sure enough, because of my professionalism, my fans soon surpassed the few analysts at the time, and I have been the first in the rankings since then until the official account was banned 5 years later.

For the community, I didn’t build it specifically, because I put enough effort into writing the official account, and all my interactions with the community were placed in the message area of ​​the official account. By writing the official account, I also received continuous positive incentives and persisted in daily updates for more than 6 years, 5 of which were on the official account. The madman-style community was naturally formed.

The process of content output was quite bumpy. 2017 was the year with the fastest fan growth, because the money-making effect was full, and many trading websites had a large number of copycat benefit effects. In the second half of 2018, the market suddenly cooled down. There was a dead silence. No one read what I wrote. Users kept losing money. Every day, there was nothing but scolding. I couldn't help but doubt my life. At that time, almost 90% of the big KOLs in the same industry stopped doing it, but I chose to persist because I believed that Bitcoin still had a future. I believed that blockchain was the technology needed in the future. As the originator of blockchain, Bitcoin's future was bright.

It was also in that year that I kept recharging everyone's faith, telling everyone about the future of Bitcoin, telling everyone that Bitcoin would replace gold in the future, and it was more likely to become a national strategic reserve and a circulating currency in the world. Bitcoin would eventually be priced in Satoshi, 1 Bitcoin = 100 million Satoshi. Until today, I still think so.

Until 2021, the market ushered in the dawn again, and my fans were celebrating. They said, fortunately, I held it at that time, because you made millions and changed your life. There are countless people like this. At that time, I felt that I was truly successful. I not only changed myself, but also changed those who were willing to believe in me. But later I thought about it, in fact, it was just the right outlet. These efforts in A-shares may hardly change my life, so choice is more important than effort.

Chapter 2: Madman's words——Now, the future

1What impact will the United States' use of cryptocurrency as a national asset reserve have on the crypto market in the short and long term?

First, let's talk about the short-term impact. Trump's policy is a policy that is bearish when it is good. Why do you say that? Because the market's expectation for strategic reserves is to push the US government to buy Bitcoin with real money, but in the end Trump's policy is to make Bitcoin strategic reserves by confiscating property, so in the short term it is obviously not as expected, and the market directly turned its face away, sold the news, and responded to the news with a waterfall.

In the long run, the significance of the US strategic reserve is huge. First of all, the US dollar is the most important currency in the world. The world's sovereign countries used to only reserve US dollars and gold. Now that Bitcoin is included in the US strategic reserve, it means that Bitcoin will be recognized by the world in the future. Although the United States does not buy (now), if other countries want to include it in the strategic reserve, they obviously need to increase their holdings by buying it. The logic is similar to the Grayscale Bitcoin Trust in the past. It can only buy but not sell, but the volume may be hundreds or thousands of times that of Grayscale. Therefore, the expectation and boost for the long-term currency price are obvious.

At present, we should pay attention to who is the second country to propose a strategic reserve. I believe that it will not be too long before countries are included in the reserve one after another.

In addition to value storage, from a monetary perspective, the deeper meaning of Bitcoin's inclusion in the strategic reserve is the liquidity of Bitcoin. Bitcoin is easier to circulate and carry than gold. It can even be taken to all parts of the world by memorizing the private key in your mind. It is not restricted by any national currency. This is a function that no currency or gold has now. If such a currency becomes a global currency, it means that billions of people have a small amount of Bitcoin in their wallets for circulation and payment. The era of global currency unification will come. At that time, Bitcoin will be the value anchor, and all commodities will fluctuate around Bitcoin, but this may be the ultimate form.

We only need to know that before the ultimate form arrives, its price is not high at any time. This process will continue to push up the price of Bitcoin. As for how many years it will take, I believe there is still a long way to go. My attitude towards Bitcoin is that the long-term bull market is far from over, and innovation has just begun. Bitcoin will be left to the next generation.

2, all the benefits promised by Trump have been implemented. Is there any new news that can drive the market to rise further, or do you think the market has gone bearish?

In the short term, all the positive news has indeed been realized, and there is no new policy worth looking forward to. The only thing we still hope for this year is that the Federal Reserve can resume QE in the second half of the year to increase market liquidity. Judging from a series of operations since Trump came to power, Trump is creating an artificial economic crisis and forcing the Federal Reserve to release money, so we are now in this artificial crisis, and it is normal to feel uncomfortable. But we must have a deeper understanding of the word crisis. There is opportunity only when there is crisis. Every crisis will wash away a large number of undetermined bulls, but in the end the market will always rebound. Those who dare to increase their positions in the pit will eventually get great results. Since we know that Trump is creating a crisis, then this pit will definitely be filled in the end, but how deep this pit will be dug requires us to think more.

Regarding the bull and bear markets, speaking only of Bitcoin, I think it is still in the bull market process. Currently, both the on-chain data and the capital situation do not conform to the logic of the bear market. It is more likely to be in the bull market correction cycle, and the correction range of previous bull markets is often 30-40%. So, pushing back from 110,000, the low point of the correction is probably 66,000-77,000. The market has already touched this range, but whether it has bottomed out or not, we can combine the trend of the U.S. stock market. The U.S. stock market has had a large negative line for three consecutive weeks on a weekly basis, with a drop of more than 10%. This level of correction often does not end quickly. In previous crises, a 10% drop in the U.S. stock market was just an appetizer, and a 20% bottom-fishing might be successful, and a 30% bottom-fishing drop was basically a sure win. So I personally think that the Bitcoin price of 77,000 is most likely not the bottom of this correction. In the short term, 77,000 is a very good support level, so with the oversold rebound of the US stock market, it is very likely to touch 90,000 or above. For short-term and medium-term swing traders, it may be a good choice to reduce the price above 90,000 and buy it when it drops.

Overall, Bitcoin does not meet the bear market criteria, but the correction is likely not over, and it is a market of selling high and buying low.

In the long term, I think the following news will push Bitcoin to a new peak

First, the Federal Reserve will release liquidity again, which has been mentioned before

Second, the globalization of Bitcoin strategic reserves and the follow-up of strategic reserves of various countries will bring huge increments to Bitcoin

Third, and the most important one, if the cryptocurrency is legalized in mainland China, it will be a huge benefit. In terms of purchasing power, no country can compare with the Chinese. The people have money in their pockets, but there are no good investment targets. The stock market has been at 3,000 for more than ten years, and the index has not risen despite continuous expansion. The loss effect is obvious. Now the real estate market is not very prosperous. With the end of the demographic dividend, the real estate market has been in a bear market for more than ten years.

So if this is really opened, trillions of funds will rush in every minute, and it is not difficult to double Bitcoin. However, if China opens up, it will not open the current cryptocurrency exchanges, but create a Chinese version of ETF, where money can be bought and sold within the wall, and withdrawals are not allowed, but the price is anchored to the global Bitcoin. To put it bluntly, it is to make a pool and take it outside the wall for hedging. After all, the foreign exchange wall cannot fall, which is the foundation of the economy.

3Which sectors are worth paying attention to in the future, and what types of projects may have new alpha returns?

Okay, let me talk about a few sectors that I think have more opportunities for your reference

1. RWA：The concept of tokenization of real assets is very large and covers a wide range. First of all, we can combine Defi with traditional finance. Defi is mature enough in the currency circle. If we can use blockchain technology to superimpose the traditional market, then the imagination is unlimited. For example, tokenized bonds can be used for mortgage loans, and tokenized equity can greatly increase the liquidity of the financial market, which will be of great help to the future economic environment. In addition, the split of real estate ownership, the use of tokens to confirm rights to obtain future income and growth, and the token split of artworks are all examples of virtualizing real assets. In short, there are clear opportunities for implementation here, but the step of putting assets on the chain requires the endorsement of traditional large institutions.

2.AI：AI is the hottest topic at the moment and a sector that will continue to innovate in the future. The integration of AI and blockchain is mainly reflected in AI algorithms. AI requires a large amount of data for machine learning, and blockchain happens to protect data privacy and even turns data into a kind of value transmission, which can make centralized AI evolve towards a safer decentralization. At present, except for some simple AI AGENTs, most are still in the stage of speculating concepts, which are far less practical than centralized AI, but there will always be bubbles. What the market wants is dreams, so there will be speculation expectations.

3.Public chain:This is a sector that has been talked about for a long time. Public chains will be hyped in every bull market cycle, and several new chains will be hyped in every cycle, but Alpha often exists in new chains, not old public chains. This is the logic of standing on the shoulders of giants. Before all chains converge, the public chain will continue to iterate and break through the "impossible triangle" of the blockchain until it catches up with the current Internet transmission speed and cost.

4.Payment:Cross-border payment plays an important role in the process of global integration, and the slow settlement and high cost of traditional finance are notorious. The advantages of using blockchain to do these are obvious, but these pits have basically been occupied by stablecoins, such as USDT and USDC. In the later payment area, we should pay attention to the integration of payment and smart contracts, such as some IoT devices, which earn data value through data transmission, and blockchain projects that replace the banking system. In some backward areas such as South America, Africa, and Southeast Asia, a large number of blockchain projects are being used to replace the banking system because the cost of opening a bank account is too high for the poor. For example, the Filipino maid hired by my family before was paid in legal currency, but she settled slowly, the procedures were complicated, and the wear and tear was high through the traditional financial system. Later, I taught her to use the exchange, use U to settle and then exchange it into local currency, which was convenient and less worn.

5.MEME：The MEME coin craze has passed, but this matter will not end. Low-cost and high-yield PVP will always exist in casinos, because it is in line with the gambling consciousness. In the future, celebrities and brands may issue their own tokens on the chain. At that time, there may be more ways to play, such as tokens can be used to exchange company products. The current hype is only the most basic form. In the end, MEME will also be empowered, whether it is brand value or consensus value.

From the perspective of the sector, the overall logic is to speculate on new rather than old. The big opportunities in the future are still in new projects. 90% of old projects cannot escape the fate of lower rounds. After all, for most project parties, the easiest way to make money is to launch a new project, rather than to save old projects with scattered chips.

4Traditional financial institutions are entering the cryptocurrency circle. Which cryptocurrency assets do you think these huge amounts of funds will be allocated to? Where will the funds flow in the future?

Looking at traditional capital, there are four directions to refer to: strategic reserves, ETFs, Grayscale and the Trump Fund.

The types of tokens in the US strategic reserve, such as BTC ETH SOL XRP, etc., may be the first to be allocated by traditional institutions in the future. Because for most traditional institutions, they don’t understand the cryptocurrency circle at all. They take investors’ money and invest with their eyes closed. They invest because they have to allocate. These institutions absolutely dare not touch those projects that may return to zero. With the endorsement of the strategic reserve, the traditional funds don’t have to bear this pot.

In addition, the future approval of major US ETFs, currently only BTC. ETH, SOL, XRP, LTC are all in preparation.

The configuration of Grayscale Trust represents the direction and expectations of early institutional investors in the US currency circle. At present, Grayscale Trust's single asset trusts include BTC, ETH, BCH, ETC, LTC, SOL, LINK, MANA, FIL, BAT, LPT, XLM, ZEC, ZEN

Finally, the Trump Crypto Fund is also an important reference standard. It currently holds BTC, ETH, TRX, LINK, AAVE, ENA, MOVE, ONDO, SEI

Chapter 3: Madman Says——Advice for Newcomers

1What advice do you have for newcomers who have just entered the field of cryptocurrency? How should they start learning and accumulating experience?

For newcomers, the threshold of the currency circle is relatively high now. It is not like when we entered the currency circle, we could rush in as long as we knew how to buy and sell, and we could do it with a little basic knowledge. After so many years, the currency circle has derived too many ways to play, especially the content on the chain. It can be said that everything that traditional finance had before has been copied. What traditional finance does not have, the currency circle itself is also innovating, which is equivalent to requiring a lot of financial knowledge, a strong blockchain reserve, and understanding the Internet.

7*24 hours of uninterrupted trading will make newcomers exhausted, so for newcomers, you can first understand what the entire framework of the currency circle is, such as secondary market transactions, analysis or macro analysis of the primary market, exchange-related business, chain scanning and treasure hunting, Defi, etc. Newcomers need to focus on subdivided fields, fully understand a certain field, accumulate experience in practice, and talk more with industry veterans to feel more, especially those pits that others have stepped on, which are the most valuable wealth for newcomers.

Finally, learn quickly. Only by running faster than others can you have a chance to get big results.

2, what common misunderstandings or traps do you think newcomers need to avoid in the market trading process?

For trading, I have been in the market for nearly 20 years. I may be older than many friends who listen to space. I am not that old. I just started trading when I was in school. I stepped on many pits over the years. I think the most important thing is to have a correct mentality. I often say in tweets that trading is a marathon, not a 50-meter sprint. Don't think about getting rich overnight, but a long-term stream. As long as you can survive, opportunities are always there, so I pay more attention to how to allocate assets, how to make assets grow steadily every year, which are risky assets, which are cash assets, and which are value-preserving assets, and how to allocate according to your own risk preferences.

If you don't have too much assets now, just work hard in this industry, think about how to make money first, don't just think about getting rich through trading, because I have seen too many people get rich quickly, and eventually return them to the market. Many times, the money earned is based on luck, and it is lost by strength.

Another thing is not to take out loans, and don't use money that affects your life to speculate in cryptocurrencies, because this will affect the most important thing in your trading: mentality. Once the mentality is distorted, all operations will be deformed. Once you find that your mentality is not good, stop trading immediately, slow down and get back on the road.

If you do leverage, remember to set a stop loss for each order before opening an order. This is the key to survival. If you can't comply with this, please don't open a contract or leveraged transaction.

3How do you suggest newcomers build their own analysis framework and model? What practical tools or methods can you recommend?

In trading, I think the most important thing is not to read books, but to start first, to accept failure, to accept every stop loss, to admit that you are imperfect, even mentally retarded, and to learn to respect the market first. So my suggestion is to use very little money to try, to make mistakes, to find your own problems from the transaction, and then to solve the problems and find a trading method that suits you.

After you accept your failure, you can start to learn some theoretical knowledge, look at the indicators, and see what kind of operating rules the K-line has. Here I recommend a few books on trading that I think are more helpful, "Wyckoff Trading Method", "Japanese Candlestick Chart Technology", "Reminiscences of a Stock Operator", "Turtle Trading Rules", and "Stop Loss".

Finally, combine various types of knowledge to increase the success rate of market judgment. Trading is not a simple road. It is a system. It is difficult to get the correct result from a single indicator. Over the years, I have been constantly improving and learning. Trading is a road of hard work, so if there is a better way to make money, it is recommended not to consider this road. This is a road to wealth with a life-and-death experience. Most people spend their time in mediocrity. People who can earn stable returns are rare. More often, I feel that it is a bit of a competition of talent, or whether your personality is suitable for trading. The key is to find a way to make money that suits you.

Conclusion

Mercy is honored to invite the legendary trader Madman to share this time. "Responsible, focused, and sincere" are the qualities I deeply feel from my teacher. In the boring market situation, I hope everyone can gain something from his sincere and profound cognitive sharing and regain confidence!

Finally, Mercy excerpted a sentence from Madman's recommended book - "Reminiscences of a Stock Operator" and shared it with everyone:

"There is nothing new on Wall Street, because speculation is as old as the mountains. What happened in the stock market today has happened in the past and will happen again in the future. "

Risk Warning and Disclaimer

This article is for reference only. This article only represents the author's views and does not represent the position of OKX. This article is not intended to provide (i) investment advice or investment recommendations; (ii) an offer or solicitation to buy, sell or hold digital assets; (iii) financial, accounting, legal or tax advice. We do not guarantee the accuracy, completeness or usefulness of such information. Holding digital assets (including stablecoins and NFTs) involves high risks and may fluctuate significantly. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professionals for your specific situation. Please be responsible for understanding and complying with local applicable laws and regulations.