Original author: ROUTE 2 FI
Original source: substack
原文标题：Some thoughts about what to look for when buying crypto tokens + mindset in a bull market
Compiled by: TechFlow
What to Consider When Buying Cryptocurrency in a Bull Market
The bull market is driving wave after wave of gains, with each coin rising to varying degrees.
Today I want to talk about some basic principles that you should consider when investing in tokens.
I think the following diagram summarizes pretty well what you need to consider.
From the image above, you can see seven different categories:
Fundamental analysis
news
Sentiment and positioning (including technical analysis)
Identification of market sector rotation patterns
Understand the different types of market players (difficult unless you are deeply involved in the industry)
Order Flow and Execution
On-chain flow
Let’s start the discussion right away with some tokens.
$MATIC
Polygon has lagged the market over the past year due to oversupply, a lack of focus in its roadmap, and a failed mid-2023 product launch.
AggLayer Mainnet Launches on Friday the 23rd
Polygon is becoming a leader in the ZK ecosystem
MATIC’s POL conversion will take place in the second quarter of 2024
POL stakers will receive airdrops of new L2 on Polygon, similar to Celestia
Similar to Eigenlayer, POL can be re-staked to earn yield from the new L2 on Polygon
Everyone has already sold, downside risk is low
With a FDV of $9 billion, it is easy to see that MATIC is priced lower compared to many other L1s
We are in an uptrend and L2 will benefit from EIP-4844 (Matic should also benefit under this narrative). Downside risk seems low for Matic, but it is a cursed coin and personally, I don’t see a huge upside for Matic.
$BE
It is an L1 chain with super fast TPS and finality (settlement), designed for asset exchange or trading, and is very suitable for DEX perpetual contracts. Don't we already have a lot of DEX? Well, they are still a little bit lacking compared to the CEX experience, and this is the problem that $SEI solves. It has the following features:
Fastest L1
The team comes from Google, Goldman Sachs, RobinHood, Nvidia
Raised over $130M (Jump, Coinbase Ventures, Circle, Delphi, etc.)
Developers from Terra (smooth UX/UI)
2 billion market value, 9 billion FDV
Rotation (often mentioned by influencers like Hsaka)
Just launched v2
It seems to be on track to replace $LUNA from the previous cycle, which was well-liked in the field
As a drawback, Sei’s DeFi only has $20 million TVL, which is basically no ecosystem. However, their biggest goal is to launch a trading dex that can compete with Binance/Bybit, etc. I don’t think it makes sense to consider TVL so early.
Dangers of a bull market
I read this quote on Twitter a few months ago and wrote it down in my notebook, can’t remember who originally said it, but it’s great advice:
Don't be a person who is not bullish enough, has no long-term investment, has no diamond hands, is timid, and does not understand the power of the bull market. Take profits after a small rise. This kind of person can't make big money because he has no courage, no vision, and can't withstand pressure. Day trader type, technical analysis type...
But don’t be that guy with the diamond in his hand, who believes every narrative, who holds positions and investments because of excessive optimism, and who gets paper gains for generations. That’s all well and good. But he can’t fully understand the market, so he makes bigger bets, keeps betting, and this guy doesn’t take his money for safe havens, and he gives most of his wealth back to the market. The reason for his success becomes the reason for his failure.
What kind of investor should you be?
Become the biggest Degen. The kind of person who believes in everything, believes that the future is bright, makes bigger bets, and goes long on your long-term positions. But at some point, this person suddenly exits the market completely and laughs about the huge fortune he just made on a Ponzi scheme that is about to collapse and will never come back.
An investor who performs well in the bear market of 2022 may have difficulty in the bull market, at least in the initial stage. The reason is that he cannot deal with two different market environments in the same way, and only those who adapt can perform well again.
In a bull market, on the contrary, money is greedy and therefore there is a lot of speculation. The best thing you can do in a bubble is to invest in promises and projects that are not yet quantifiable. A perfect example is Worldcoin. They want to scan the eyes of everyone in the world, and Sam Altman is the founder of this project. It is easier for something to reach a valuation of hundreds of millions or even billions when you don't understand it and hear everyone talking about how it will revolutionize an industry. You start to see projects using new technologies or new platforms, and new partnerships, and everything looks great.
If you look closely, you will find that some coins with no revenue and zero activity are still promising and perform much better than coins with a stable revenue stream. The next time you see a project, don't ignore it because it doesn't have a mature product yet, doesn't have many users, or because it doesn't generate enough revenue. Those should not be the reasons for you to refuse to invest in this token. If you want to make crazy money, embrace speculation.
Many people think that once a token is hyped, it is too late or too risky to buy it, but think about it from another perspective, the main purpose of a token is to generate hype. Therefore, once a token is hyped, it has already demonstrated the ability to generate hype, so it is less risky.
