There are so many projects launched recently! So today, let’s talk about my opinion on “speculating on new things instead of old things”
I think the most important concept in this concept is "speculation". The inner meaning of "speculation" is "hype". Behind speculation is the short-term enthusiasm of funds, emotions, FOMO, and constant momentum. If the concept of speculation is applied to BTC and ETH, I think it is inappropriate.
So what is being hyped? I think there are only two types: new concepts/narratives and new varieties.
In the 2020 DeFi Summer, DeFi-related products were hyped up wildly
In the first half of 2021, animal concepts and related varieties were hyped, but the duration was extremely short.
In the second half of 2021, related tokens such as Metaverse, GameFi concept, Sandbox, YGG, AXS, etc. were hyped, and also led to the NFT craze.
In the first half of 2022, NFT was hyped wildly, and it also drove the outside market (digital collections)
🌟Can these concepts that have been hyped be brought out and hyped again?
Of course you can, but the effect will definitely not be as good as the first time. A new concept is like a new story. When you watch it for the first time, you will be excited and look forward to the ending. But when you watch it for the second or third time, it is difficult to have the urge to stay up all night to finish the story, because you already know the ending.
The same is true for the corresponding market funds. With the same narrative hype, the sentiment of funds will definitely not be as good as the first time. If you want to attract funds again, you need a new story, or an adapted story, to arouse the interest of players and make them want to keep paying attention, so that the sentiment of funds will rise and FOMO will arise.
🌟Let’s talk about new varieties. Why are new varieties more attractive?
Let's take a more common example. You and your ex-girlfriend broke up after being together for 6 years, and met again after 1 year to get back together. You found that you knew each other so well that the novelty may last for 1-2 months and then it will be dull.
But if you meet a new girl and you fall in love with her, hormones will be secreted like crazy and occupy your brain. You may continue to be a licker, chasing her, pleasing her, showing your charm, and finally being together, living together, traveling together. You will find that there are infinite "secrets" behind her that have not been explored, and you will continue to be excited until you both know each other infinitely.
Although the ending may still be a quarrel and breakup, the process of courtship must be full of passion and will last longer than getting back together with an ex-girlfriend.
What’s more, you don’t know what your ex-girlfriend has been through in the past year since the breakup. She may have been through a lot, so you will care more about her experiences in this year.
To you, your new girlfriend is just the past, and the moment you met her is a new beginning.
So having said that, let’s look back at several types of stocks that emerged from the bull market in 2021.
FIL, the peak price is 237, the current price is 4.4, the price needs to increase by about 54 times to return to the peak. But is it appropriate to only look at the price? A variety has not only the price, but also the market value.
The peak market value in 2021 was about 12B, and now it is about 2.4B, which means that it only needs a 4-fold increase to return to the peak market value. In other words, the market value will return to its peak at about 20 USD. The peak market value you want to reach is just the starting point of the coin price in 2021.
Let’s look at YGG. The peak price in 2021 was $11, and now it’s $0.65. It will take about 16 times to return to its peak. Looking at the market value, it only needs to increase 2-3 times to return to its peak.
Therefore, when speculating on old coins, one must not only look at the price of the coin, but also its market value, and the funds and costs required to push the old coin up.
In 2021, everyone still liked to follow VC to buy and speculate, but in 2023-2024, everyone found that VC was a pitfall. Buying meant selling to VC. The coin price did not rise, but the market value kept getting higher and higher. There was an endless supply of goods on the market that could not be bought.
So this also gave rise to the fact that on 23-24, everyone started to oppose VC and began to hype the concepts of "fair launch" and "MEME".
Looking at the old ones, LTC, BCH, and ETC, which were among the top ten in terms of market value in 2019, no one knows where they have fallen to now. This is because there is basically no new concept narrative to drive these varieties.
New varieties emerge every day, and countless MEMEs are issued on the chain, and you cannot distinguish them, so I think the root of the "hype" must start from the narrative.
Think again: Why do old projects frequently undergo brand upgrades and project mergers in the market?
Market liquidity, attention comes first. Old projects are not as easy to get market attention as new projects, not to mention the problem of locked-in shares mentioned above. This is also a real historical trace.
The phenomenon of speculating on new products instead of old ones is not idiotic at all. It is even a phenomenon with theoretical basis.
Based on the reference point dependence of behavioral finance, secondary market investors always subconsciously refer to some historical landmark prices when choosing investment targets, such as previous highs and lows.
So how far are some of the leading old coins from their previous highs? See the data in the figure below.
When the incremental liquidity of the market is holding a certain target, a look at the historical trend will directly scare off a wave of people, and fundamental investment will not be able to dominate everything. In a zero-sum market, liquidity is king, but what guides liquidity is the market's attention. Historical trends will directly scare off a wave of people, and fundamental investment will not be able to dominate everything. In a zero-sum market, liquidity is king, but what guides liquidity is the market's attention.
But even if some projects have gained market attention, potential investors are always easily discouraged when they notice some history.
So I agree with the market's concept of "speculating on new things instead of old things"
New story + new variety > new story + old variety > old story + new variety > old story + old variety
Let’s go back to the topic of the new girlfriend. If you find out during the courtship process that your new girlfriend is a liar, a “SCAM”, or even more exaggeratedly, you find out that the woman you love is actually a man, you will definitely call her a motherfuker in your heart.
New is not necessarily good, and old is not necessarily bad, but when it comes to pursuing the temporary pleasure of hormonal secretion, fresh is definitely better!
