July 12, 2024 Grandpa checks in

In recent days, an article about ARB has been trending on the Internet, "97% of ARB holders are losing money, what is the problem?" When ARB was first launched, its market value was $1.02 billion. Now, its market value is $2.3 billion, more than double the circulation. The price of ARB, however, presents another opposite situation. According to data from IntoTheBlock, as many as 97% of ARB holders are losing money, while the other 3% are just protecting their capital. ARB's highest price in January this year was $2.26, and the issue price was almost $1. Now it is at a historical low of $0.7. Of course, no one can guarantee that it will not continue to hit new lows.

One reason for the weak ARB price is that the foundation has adopted a strategy of "subsidizing to seize the market", which is the same as the expansion method of most Internet companies at present. First, users are attracted by subsidies, and then "profit" is achieved after seizing the market and squeezing out competitors. In fact, we can also see that there are a lot of subsidies for projects on Arbitrum, and it is precisely the crazy funding for the project parties that has caused the circulation of ARB to expand rapidly. From the data point of view, ARB is currently the most successful public chain of L2, surpassing Base, OP, etc.

From the perspective of value investment, I would undoubtedly recommend ARB. After all, data is the most objective. Compared with ARB's data, the recent public chains that have been launched can be described as shit. However, I have never paid much attention to ARB. Even the ARB I got from some projects before was mined and sold. The core reason is the negative impact brought by high FDV, which makes it difficult to achieve explosive profit growth. Imagine that when you invest in a project, you can't see more than 10 times the profit, why don't you buy Ethereum instead? Therefore, high FDV projects must be cautious, which I have repeatedly emphasized many times this year.

As for the market, it has entered a period of low volatility and sideways trading. This process is relatively painful for those who have previously held a large position. However, I think you can relax a little. The downward force of this wave is not small, so it takes time to recover. The current market information shows that it tends to go up. At the hourly level, the price of the cake will continue to go down, but there is no need to be afraid of the volatile market if it does not break a new low. You need to wait patiently for time to pass.

Thank you for your attention and likes.