What Happened and What Will Happen in the Crypto Market

Author: 0xTodd Source: X, @0x_Todd

In the past week, many friends have called me to ask about the market. I think it is necessary to disclose my thoughts and my views on the current market -

[What has changed]

[Future progress]

My family members who have been following me for a long time know that I am a long-term investor. Therefore, starting from 2019, I have an annual strategy that is updated every year. 2024-2025 is probably this one, for discussion with my family members.

1. DeepSeek burst the bubble

Once DeepSeek came out, don’t worry about whether it really used 5 million US dollars to train such an AI, but the narrative is like this: [Algorithm improvement] at least defeated [computing power improvement] in the short term.

Don’t worry about whether this thing is true or not - since the market unanimously recognizes the 5 million thing, you should treat it as true.

At the end of 24 years, in addition to meme, I don’t want to admit that there is only one narrative left objectively: AI Agent, which can be said to be the hope of the whole village.

However, no one expected that AI Agent would be ruthlessly defeated by DeepSeek, which is in the real AI track next door.

For example, the DS team is full of real IQ 200, fresh graduates from Peking University and Tsinghua University, and Olympic medalists.

In contrast, our industry is chasing after second-tier programmers who are unemployed at home, and AI engineers who were fired by large companies or secretly doing side jobs, so sometimes we are forced to have an IQ of 50.

So…

On January 27, I closed all my AI token positions with tears in my eyes. I didn’t sell them at the highest point, and I sold a lot of them when they fell back. It would be a lie to say that I didn’t feel bad.

But the more cruel fact is that this thing has turned our entire AI Agent track into a clown, and this is probably true.

The reason why "narrative" is "narrated" before "events" is because this "event" has not yet landed, and it can only rely on "narration". Once the story can no longer be told, the decline of the track is really irreversible.

Second, the president and his mob

I don’t know how everyone feels during the Chinese New Year, but my physical experience is that many friends and relatives are asking how to register BN or OKX, because they want to buy Trump coins.

The last time they were so crazy was during the National Day, when they wanted to open an account and enter the A-share market.

Shanghai Composite Index Trend Source: Tencent Securities

If I remember correctly, these warriors who entered the A-share market on October 8 are still hanging on the top of the mountain.

After taking profit on AI, to be honest, the more I thought about it, the more scared I became. Then I saw this post.

To sum up: The president seems to have lost money, but there are two possible reasons:

1. He doesn't make money in the way you can see

2. He is an idiot

Anyway, I know the answer is definitely not 2.

Yes! Meme is now played by the president, and he can also make money through channels unknown to us.

To be fair, are the memes we play worthy of sitting at the same table with Trump?

A hippopotamus from Thailand, a squirrel from the United States, and a bottle of longevity medicine that prolongs the life of flies, can they really sit at the same table with Trump, who is firmly in the Oval Office?

It's the New Year, one table for adults and one table for children.

Adults drink famous liquor, and children are only worthy of Sprite.

So, I basically sold all the memes in my hands that day. My meme positions used to have huge floating profits, but because I took the initiative to reduce my IQ to 50, I did not complete the great retreat, but have been joining the great revolution.

It feels like a dream.

Third, a top signal: A high school student made tens of millions

I believe that all my family members who play memes, and even those who don’t play memes, have heard of this recent legendary story.

A high school student joined the group and sat for a month, and suddenly bet on Jelly, winning tens of millions at a very low cost.

Of course, the rumors became more and more outrageous, and I am not sure that this is 100% true, but I know that this taste is right.

Looking back 1-3 days before the 69K historical peak in 2021, I was sighing:

• Interns, their yields easily beat fund bosses

• ENS's grassroots community contributors received tens of millions in airdrops

At that moment

Just like

at this moment

I liked this one. A TIME editor (or a hacker, of course) can immediately harvest countless SOLs with a fake tweet.

I ask you, what does this mean?

It’s not that making money is not possible - experts can always make money, even at the bottom of a bear market.

But if the subject becomes an ordinary person:

Intern makes a lot of money, ENS contributor makes a lot of money, high school makes a lot of money, and editor makes a lot of money.

Means: [At this moment, everyone's hands are particularly loose]

Friends who often play cards know that only when the floating profit is extremely high will they become loose.

This represents that the greed index has reached its true peak.

This is a super top signal.

So, on the 30th, I liquidated almost all the altcoins, leaving only BTC, and a small number of mainstream coins ETH/SOL/DOGE/Exchange coins.

Although there are still losses, there are still some fruits of victory left.

I admire the wonderful operation of Gao Gaoge, and I also respect the market law of this alternative investment product.

Fourth, questions about BN and BN’s response

Alas, to be honest, I don’t want to talk about this topic.

As a former CEX practitioner, I have seen this set of consultants - listing - shipping drama too many times. From the initial anger to the gradual numbness later, I am no longer surprised.

However, in the past, this thing was placed under the table, which was considered "small corruption is the lubricant of development";

It was considered "no fish in clear water", and the water was slightly turbid, which was part of the rules of the game.

After all, we are not living in a utopia, not in a vacuum hometown.

However, the most taboo thing about this thing is to bring it from under the table to the table.

I have no intention of criticizing BN or Yijie, because this thing exists in almost every CEX.

If this is placed in the traditional world, to exaggerate, it is a huge scandal that can make hundreds of people unemployed and dozens of people go to jail.

Perhaps it would be better for Yijie not to respond, learn from the stars to do the cold treatment, and give retail investors some hope.

However, our industry is mostly skeptical, and a huge scandal is a heavy hammer that hits every holder's heart hard.

It has crushed the faith of many people.

Our industry really needs "God" because it is maintained by consensus.

But when everyone found out that the public servants under the "God" actually wanted to make some quick money, the faith suddenly disappeared, and soon projected to the relevance of God - all the altcoins on BN are facing huge doubts and eyes from retail investors at this moment. Since AI and HOOK are like this, are other coins really better?

V. Future Scripts

If we follow the view of "carving a boat to find a sword", this decline is very similar to May 19. I suggest you review the trend after May 19.

The trend after May 19 in 2021, source: Bitfinex

If we follow the script of May 19, the following will be a repeated shock plot lasting two months, until the most loyal people are washed out, and then a new $Bitcoin ATH will be ushered in.

Of course, some people suspect that this is the story of December 4, AKA the beginning of the bear market.

From my inner inclination, I hope this is May 19.

After all, the US national strategic reserve of Bitcoin is becoming clear, and never underestimate the huge influence of this matter, really.

Even if Bitcoin reaches 85K-88K, I am willing to add some more positions.

Six, my position distribution

My current position:

• 40% BTC

• 20% mainstream coins (ETH, SOL, DOGE, BNB/MNT)

• 40% stable currency financial management

Bitcoin is my eternal belief. I think I will never sell BTC and will not do swing trading again.

Reasons for keeping ETH:

To be honest, the belief in ETH is weakening.

However, objectively speaking, the president's DeFi project is buying ETH.

I don't know if many of my family members are speculating in US stocks, and many people regret not following [Nancy Pelosi, the female stock god on Capitol Hill].

Image source: CommonWealth Magazine

Pelosi’s highlight was once the Speaker of the House of Representatives, which is only the third position in American politics.

And now Trump is the real president. This crypto president is holding a large position in ETH (although it has been deposited in the untraceable Coinbase custody), which should not be underestimated.

Secondly, ETH has fallen to today’s position. I think it has reached the extreme of FUD, and there may be a thought that things will turn around when they reach the extreme. I can’t buy when no one cares, but at least don’t sell when no one cares.

Reasons for keeping SOL:

• There is a small probability of ETF;

• However, the cooling of AI narrative and the short-term sluggishness of MEME are two small clouds.

Reasons for keeping DOGE:

• Grayscale has launched Dogecoin Trust, and Doge also has a small probability of ETF

• In addition, Musk is working hard in the D.O.G.E department;

• I think I can sleep well in the same car with the world's richest man and "Director of the U.S. National Development and Reform Commission."

Reasons for retaining exchange tokens:

Let’s be frank, there is no possibility for exchanges to be on a bigger stage.

Coinbase will not list BNB, and Binance will not list MNT.

But exchanges are the only institutions in our industry that can make money + give profits;

If the bear market really comes, exchange tokens are relatively more resistant to declines, and occasionally an IEO can recover blood, and this is the only way to survive the bear market.

VII. Cruel view: The good days of old Dengs are over

In addition to the above, I will not hold any altcoins in a large position in the short term - the reason is very simple, inflation is too fast.

The speed of new users and new funds entering the market is simply not as fast as the speed of these currency issuance maniacs printing.

Source: Decrypt

There was a statistic a few days ago that the most powerful account on pump fun issued 17,000 coins in 3 months.

Not 170, not 1700, but 17000! His contribution alone may exceed the total number of tokens issued in the entire bull market in 2017.

Why did Lao Deng's investment strategy fail?

Too many choices!

Too many angles!

Even at the same angle, there are N CAs,

Which one is Lao Deng's turn to copy?

Lao Deng's favorite strategy: buy a waist copy at 100M or 200M.

Hold it for 2-3 months and bet it will outperform Bitcoin.

However, I am afraid that it can't even beat ETH now.

And Marshal P's favorite strategy: buy a project with a valuation of 10K in the inner market.

Run away after 30 minutes.

Real men never look back at the explosion.

Obviously, in today's token inflation, Marshal P is far better than Lao Deng.

I don't call on everyone to become a young P general, I just hope that everyone at least doesn't become Lao Deng.

Eight. Best position: 50% Bitcoin + 50% stablecoin financial management

In addition, I sincerely recommend that everyone hold a certain amount of U to get through the next period of time.

You have to accept the fact that no one can really sell at the super top.

The top of the mountain appears every 4 years. If you find a day to sell in more than a thousand days, the probability is 1/1000. Naturally, only a few people can do it. All of them are super lucky.

At this stage, half position is the best choice.

You invest 50% of your principal in financial management. We don’t talk about mining or arbitrage.

We will do the simplest Ethena USDE. Now Pendle can still give an interest rate of 18%.

If you are too lazy to use Pendle, just throw it into AAVE or mainstream CEX financial management, and there is still 10%.

The other 50% is mainly in Bitcoin, quietly waiting for the day when the US Bitcoin strategic reserve arrives.

With both interest cash flow,

and dreams and beliefs,

you will definitely feel comfortable,

guaranteed.

Of course, you can cut out another 5% to match some of the altcoins you truly believe in, whether it is ETH, SOL, DOGE or any of your belief coins.

Cut out another 5% of the funds to play PVP for a while, win once, lose as consumption, keep the feel, isn't it beautiful?

Finally, this kind of Tai Chi diagram distribution is formed.

PS: This is also how I want to slowly adjust my positions Source: 0xTodd

Nine. Finally

I am quite satisfied with my current positions. After all, this is my 8th year in the crypto industry. I have gained some experience after so long.

The only thing I regret is that I have been playing in Osaka for the past few days during the Chinese New Year. I was lazy and did not sort out these thoughts and send them out in the first place.

The same strategy, if said a few days ago, may help many people, but if said a few days later, it will become a post-event review.

However, it is not too late to mend the fold after the sheep have been lost.

I hope every family member can get their own big results in the crypto market.

Of course, if you can't get big results, then keeping some small results and earning more spiritual wealth and social wealth is also worth the trip.

Finally, I wish my family members - the Year of the Snake, the golden snake dances wildly.