1. Please introduce yourself
Hello everyone, I am Murphy, an on-chain data analyst. I joined the cryptocurrency circle in 2017 and have eaten "pork" and seen "pigs run". There are golden opportunities for ordinary people to counterattack and cross classes, but they also need to follow the objective law of cognition that the margin of wealth is; strive to combine on-chain data analysis with macro sentiment research to build a trading mindset that suits you. Always stay positive, optimistic, and cautious!
2. What was the opportunity that led you to enter the circle?
I joined Web3 in 2017. Before joining Web3, I was investing in traditional financial projects, but the traditional financial environment was very bad at the time, and many Internet financial projects collapsed or ran away. At this time when the traditional financial environment was at its worst, I came into contact with Web3 by chance.
During a company meeting, I noticed that a colleague frequently checked his phone. I wondered what he was looking at when the traditional financial market was not doing well. Then I asked him about it, and he told me that he was looking at the Crypto Currency market. At that time, I was unfamiliar with Crypto Currency. Although I had heard of Bitcoin as early as 2012 or 2013, I always thought it was a Ponzi scheme or CX.
Then my colleagues introduced me to some tokens, and I found that there were huge profit opportunities. At that time, the cryptocurrency circle was still very pure. You only needed to participate in the sale and roadshow of certain projects, communicate with the founders, and confirm through emails to get the quota. Investing a small amount of BTC can often bring 10 times or 20 times the return after listing.
The whole process of my entering this emerging world was accidental and coincidental. Another reason for joining Web3 at that time was that there were no particularly good investment opportunities in the traditional field, and the company had some idle funds, and I also hoped to use this opportunity to transform the team's business.
Core content: In 2017, I accidentally learned about Crypto Currency through a colleague. At that time, the traditional financial environment was not good, and the Crypto Currency market showed huge profit opportunities, and high returns could be obtained by participating in project sales and activities. In order to find new investment targets, I decided to enter Web3 and began to explore BTC and blockchain technology, which eventually led me to the world of Web3.
3.What do you think about investing in the primary market?
In the current investment cycle, opportunities in the primary market are obviously not as good as in the previous cycle. There are two main problems in the current primary market:
The first problem is that the initial valuations of many projects are too high. In the last cycle, we usually invested in projects with valuations between $30 million and $50 million, but now, the initial circulating market value of many projects has reached $300 million to $500 million, and the fully diluted market value is as high as several billion dollars. This high valuation overdraws the future dividend space of the project and has a low cost-effectiveness.
The second problem is that the lock-up period of the project is too long. Only a small part of the tokens of the early investment rounds are released in the early stage. This means that after the first release, it is difficult for investors to recover their costs immediately, and usually they have to wait until two or three periods. Such a long lock-up period increases the uncertainty of investment. If the bull market continues until mid-2025 or the end of the year, these projects may still have a chance to return. But if the bull market cycle is shortened, these projects may not be able to persist until the next cycle, and the investment will face great risks.
In the last cycle, we did invest in some projects in the primary market and successfully sold them after they went online, earning higher returns. However, given the high valuations and long lock-up periods in the current market, we believe that the current primary market is very difficult for ordinary retail investors.
Core content: In the current investment cycle, the opportunities in the primary market are significantly inferior to those in the previous cycle. There are two main problems: first, the initial valuation of the project is too high, reaching 300 million to 500 million US dollars or even higher, which overdraws the future growth space; second, the project lock-up time is too long, and the proportion of first release funds is low, which increases investment. Uncertainty. Due to these two problems, we believe that the current investment opportunities in the primary market are not good, and therefore we have not participated in new primary market investments yet.
4.What track or token do you think is promising?
Actually, you can see that I rarely mention altcoins in my tweets, and I rarely express my opinions on certain altcoins. Although I buy some myself, I don’t want to express them in public. When I had fewer fans, I could express my opinions casually, even if I was wrong. But now that I have more fans, I should be more cautious in what I say and do, and be responsible to my friends who follow me.
The analysis logic of altcoins is completely different from that of Bitcoin, and it is a different system. If you must ask me which altcoins or tracks I am more optimistic about, I might mention RWA and AI. It is not that these projects have achieved large-scale commercial applications, but that they currently have better narrative capabilities and stories to tell.
Now, 90% of all altcoins fail to land in the end. Although the project white paper may depict grand goals, many of them are unattainable. Either the policy conditions are not mature or the technical environment is not mature. Therefore, if the scale of funds reaches a certain level, it is recommended to first invest in mainstream coins, such as BTC, ETH, BNB, etc.
In the current cryptocurrency world, the projects or application scenarios that can be implemented and generate high profits are mainly exchanges. Whether it is CEX or DEX, the actual implementation effect is the best. The performance of decentralized exchange tokens in this cycle is not good, such as GMX, DYDX, etc. Including Binance's new coin Aevo, a large amount of it was suddenly released and smashed the market some time ago. So I will be more cautious in this regard.
If BTC and ETH reach a relatively high level in this cycle, there will be a capital overflow effect. This is the rule of each cycle: funds first flow into BTC, then switch to ETH, then overflow to altcoins, and finally flow into some local dogs, and finally the bull market ends.
Therefore, if I were to talk about promising tracks, I would focus on those that have narratives and can attract funds. These tracks tend to receive more attention and investment in a bull market.
Core content: I rarely talk about altcoins publicly, and I have to be responsible for my friends who follow me. Altcoins mainly rely on storytelling, and the analysis logic is different from BTC. I am optimistic about the RWA and AI tracks because they have narrative space. In reality, exchange tokens perform best, and decentralized exchanges perform poorly. In each cycle, funds first enter mainstream coins, then flow to altcoins with narrative space, and finally to dog coins or meme coins, and the bull market ends. Therefore, I pay attention to tracks that have narratives and attract funds.
5. Why do you think investors buy altcoins?
Although I don’t discuss altcoins much, many of my followers still buy altcoins instead of BTC. The first reason is that the price of BTC is too high for ordinary people to afford. Most investors still prefer to buy “cheap” chips instead of valuable chips.
The second reason is that the increase in BTC may not be as big as they expected. BTC is currently 60,000 US dollars, and even if it rises to 120,000 US dollars, it will only double. They feel that it is not worth taking such a big investment risk in the cryptocurrency circle and only getting double the profit.
The third reason is that the principal is limited. Even if the profit doubles, it will not substantially change their lives. Therefore, many friends read my BTC analysis, but buy altcoins. This is reasonable. They will look at the overall trend and cycle of BTC, and then seize the opportunity in the altcoin track.
Core content: Although I don’t often discuss altcoins, friends who follow my tweets are still more inclined to buy altcoins than BTC. There are three reasons: First, BTC prices are high and they feel uncomfortable being unable to afford a full BTC. Secondly, the increase in BTC may not be as large as expected, and the risk is high but the profit is only doubled. Finally, the principal is limited, and even doubling profits cannot significantly change your life. Therefore, they focus on the overall trends and cycles of BTC, but invest in altcoins in the hope of higher returns.
6. Can you tell us about your personal investment method?
I am a risk-averse investor, very cautious, and always pursue rationality and objectivity. I will not always be bullish or bearish, but make decisions based on the information fed back by the data. For my personal investment, 90% of my positions are placed on mainstream coins, such as BTC and ETH. Therefore, I pay special attention to the changes in the BTC big cycle and small trends reflected by the on-chain data, and seize opportunities from them.
Of course, investment decisions cannot be 100% accurate. For example, in this cycle, when BTC was between $15,000 and $16,000, I expressed my opinion on Twitter that this was a good entry point; when it was $26,000, I also thought that this was a local bottom consensus range. Although I mentioned these in my tweets, many people may not agree. I am not a blogger who shouts orders. I prefer to base my opinions on data and make objective analysis before expressing them.
At these two positions, I bought BTC and have been holding it. Judging from the big trends and cycles, these two points are good buying opportunities. Of course, I also made mistakes in judgment. For example, when the ETF was passed, the price of BTC was $46,000. I wrote an article at that time, thinking that we could still see BTC starting with the number 3 in 2024. Although BTC did pull back to $39,000, the opportunity to increase my position at around $35,000 that I expected did not come. This misjudgment affected many friends and made them miss a good opportunity to get on board after a pullback.
Although there is no guarantee that every on-chain data judgment is accurate, as long as we observe data changes over a long period of time and analyze the logic behind it, I believe that the probability of correct judgment will be much greater than the probability of error.
Core content: As a risk-averse investor, I always pursue rationality and objectivity. 90% of my positions are placed on BTC and ETH, and I make decisions based on data feedback. I bought BTC when it was $15,000-16,000 and $26,000, and expected the price to fall back to $35,000 in 2024 when it was $46,000. Although it has not been fully realized, long-term observation of on-chain data helps improve the accuracy of judgment.
7.What are your most memorable experiences in Web3?
The unforgettable experience was when I first entered the cryptocurrency circle. I found that mining was a good way to obtain BTC at a relatively low cost throughout the entire cycle. Mining requires paying electricity bills every month, which is equivalent to a mandatory fixed investment method, exchanging electricity bills for BTC. We recruited personnel, found a suitable electricity price location, went through the local approval process, and prepared the mine ourselves. At that time, the cost of mining BTC was about 4,000 to 5,000 dollars, and a certain amount of funds was invested. It was not until the 519 incident that the policy no longer supported domestic mining companies, and we also cooperated with the supervision to clear all of them.
In the last bull market, when the price of BTC dropped from $63,000 to $59,000, I sold all my BTC. Looking back now, the price of $59,000 was indeed relatively high, and the overall profit was about ten times. There is a luck component to getting high returns. We obtained low-cost chips through mining and held on to them firmly. At the same time, we chose to escape the top at $59,000. This also reflects the possibility of leveraging large returns with large funds, but this experience still has a luck component.
Core content: When I first entered the cryptocurrency circle, I obtained BTC at a relatively low cost through mining, and paid electricity bills every month, which was equivalent to mandatory fixed investment. We prepared a mining farm, and the mining cost was about 4,000-5,000 dollars, with an investment of tens of millions. After the 519 incident, I held BTC until the last bull market, and did not sell it when the price was 63,000 dollars. I sold it when it fell to 59,000 dollars, and made about ten times the profit. This experience shows the possibility of leveraging large funds to gain large profits, but it also requires some luck.
8.What do you think about the future trend of ETH?
The biggest problem ETH is facing is the issue of capital attention. In the past, both ETH and BTC relied on the attention of funds in the circle. In the last cycle, after BTC reached its peak, ETH peaked about a month later. This was a process of capital switching and capital overflow.
However, this cycle is different because the spot ETF of BTC has been approved. It not only relies on funds in the circle, but also attracts funds from outside the circle, including the promotion of ETF, which makes the funds of ordinary investors, traditional institutions, pension funds and family offices in the United States focus on BTC. They cannot buy ETH. Therefore, whether the ETH spot ETF applied by BlackRock on May 23 can be passed is a key event. If it fails, it may trigger a series of reactions, such as companies and institutions that have applied for ETH ETF may choose to sue based on the reasons of the SEC, similar to the last time Grayscale and the SEC. This may delay time, and may not even get a result this year.
However, I always think that ETH's ETF will be approved sooner or later, it's just a matter of time, maybe this year or next year. If ETH's spot ETF can be approved, it can form a two-legged situation like BTC. From the data point of view, I mentioned in a tweet a few days ago that we can compare the inflow and outflow data of ETH and BTC in major exchanges and find that the proportion of ETH's transaction flow is very low and still at a low level. This shows that BTC is the main thing in and out of the exchange every day, and the concentrated turnover and capital buying and selling are focused on BTC, while ETH is relatively small.
In this case, if the ETH spot ETF on May 23 fails to pass, I think ETH still cannot become the protagonist and can only follow the trend of Bitcoin. The exchange rate of ETH to BTC may hit a new low. This is my opinion, but we can't give up ETH because the possibility of ETF passing in the future still exists. As a person, I will always hold some ETH positions.
Core content: Currently, ETH faces the problem of insufficient fund attention. Unlike BTC, which has attracted a lot of outside funds, ETH is limited by the lack of tools such as ETFs. The approval of the ETH spot ETF applied by BlackRock on May 23 will be a key event. If it fails, it may trigger a chain reaction. However, I believe that ETH's ETF will be approved sooner or later, it is just a matter of time. Data shows that ETH's trading flow ratio is low, and most funds are still concentrated in BTC. If the ETF is not passed, ETH may hit a new low. I will hold some ETH positions because the possibility of ETF approval in the future still exists.
Disclaimer: [Web3 Profile] disseminates content with a neutral attitude. This article does not constitute any investment advice and is for reference only.
