Q4 is the bull market for BTC, but for altcoins, it is just a big rebound. Excluding a few coins like $SOL (casino chip concept) and $DOGE (election concept), I believe the vast majority of altcoins will not rise back to their March highs, but it doesn't prevent a short-term surge to make money. The time window for the rise of altcoins is about 1-1.5 months.
Currently, this wave of increase is front-running the expectations of relaxed regulations after Trump took office, but in reality, there are still a lot of problems in the market:
1. Project valuations are too high
2. Most projects have no self-sustaining ability, concept > actual application
3. Tokens have no substantial connection to project development. For example, Polymarket is the super application of this cycle. Has the mainnet Polygon captured the value of the application? Has it reflected in the token price? The peak of $MATIC in March this year was $1.27, now it's less than $0.4. Even at the craziest and most intense time of the elections, it still completely underperformed the market. Why? Because $MATIC is not the betting chip for Polymarket; USDC is. Looking at past cycles, mainnet concept projects can rise, relying on token concepts.
$SOL is the meme chip of this cycle
$ETH is the chip for entering DeFi and NFT in the previous cycle. The concepts of PayFi and DePin are indeed flashy, but let's be honest, what supports the rise of $SOL are the armies of meme coins that rush to Raydium day and night. The cryptocurrency world has developed to this point, and regardless of the concept, it ultimately returns to the nature of a big casino. The casino itself is not bad, but it alone cannot support a market value of 1 Trillion+ currently Total2 (total market value minus BTC market value), and it hasn't even returned to the peak of the 2021 bull market. This is still the result under increasing projects and continuous issuance of altcoins.
What does this indicate? After several cycles, everyone is becoming increasingly clear that most altcoins are just air. Everyone has demystified the grand narratives, not just retail investors, but VCs as well. Compared to the AI sector next door, which has imaginative space and practical applications, blockchain technology has been in the real world since the ETH mainnet launched 10 years ago, still using a hammer to find nails. A bunch of projects with valuations of tens of billions or even hundreds of billions of dollars are doing business worth only hundreds of thousands or millions of dollars. Even if dollar liquidity floods like in 2020-2021 after this, the intensity of off-market speculation will definitely not be the same as in the previous bull market. Does this mean crypto is over? No, but I believe project valuations need to be reshuffled, and regulatory relaxation will take time. I believe new narratives and truly valuable applications will emerge in the future, and there is a high probability that they will not be accomplished in this cycle. Returning to personal operations, by the end of December, I will move all positions back to $BTC and stablecoins.
When the party music gradually stops, a few have quietly left, while most are still dancing in the dance floor, hoping you belong to the former.
