Markets have gone from dull to uncertainly bullish. Crypto markets have been lackluster since May. Prices are stagnant, airdrops are disappointing, infrastructure projects are tired (people are not paying attention to technical posts anymore), and regular investors (not us, but regular investors who buy casually) are inactive. There is more discussion about politics than crypto right now.
External uncertainty
First, the Ethereum ETF is finally live and data is starting to come out. On the first day, the ETH ETF's trading volume reached $1 billion, accounting for 25% of the BTC ETF's trading volume. Most analysts expected the ETH ETF's trading volume to be between 10% and 20%, indicating that this is a bullish signal.
But will this trend continue? Will inflows exceed Grayscale’s outflows?
This is the main uncertainty for ETH right now, causing the price of ETH to fall. But over time, this uncertainty will gradually diminish, and Grayscale will hold less ETH.
If every day we hold this price level it will be a bullish sign.
Next up is the US election. Will Trump win? Will he declare Bitcoin a reserve asset (not a currency) at his conference in Nashville? Is Kamala really willing to change the Democratic Party’s stance on cryptocurrencies?
Too many uncertainties.
The market doesn't like uncertainty; it wants answers. However, I believe that the U.S. government will eventually change its negative stance on cryptocurrencies as a natural process in the development of technology.
my country is also reportedly considering lifting its ban on cryptocurrencies. While this is yet to be confirmed, this uncertainty is also bullish.
Third, Mt Gox creditors. Will they sell their BTC, or will they hold on? Or will they sell BTC and buy other crypto assets?
We don’t know yet. This uncertainty has a negative impact on cryptocurrency prices, but one day we will realize that it doesn’t matter. Just like the German sale of BTC, the Mt. Gox incident will pass, leaving behind the selling pressure we have been worried about for years.
So, what is my point?
It is often said that the markets are driven by two forces: fear and greed. However, I believe that fear is more powerful than greed.
Loss aversion is a powerful force in investing, making fear a more dominant driver than greed. The pain of losing money is stronger than the excitement of making money, making us overly cautious. This fear leads to early selling or makes people unwilling to invest even when there is a good opportunity in front of them.
In markets, this means that fear often drives decisions more than the appeal of potential gains, leading to conservative and overly bearish reactions.
Over time, our fear will decrease and FOMO will set in. The current external uncertainty is temporary. Grayscale will eventually run out of ETH, Mt. Gox creditors will sell what they want, and even if Trump loses and the Democrats remain against crypto, we will be able to continue to prosper as we have for years under this anti-crypto government.
Still not convinced? In a Blockworks podcast, Lyn Alden predicted a typical liquidity cycle, predicting a boom in 2025. If the above positive events occur, the chances of the market going up will increase.
However, external uncertainty is only part of the bullish sentiment. There are finally some interesting things happening within cryptocurrencies.
Internal uncertainty
Internal uncertainty refers to decisions made by the local crypto community, such as developers, traders, and airdrop farmers. This bull run is somewhat boring because it is mainly driven by external factors, such as:
BTC/ETH ETF
The government's erratic policies
Potential interest rate cuts, etc.
We really lack strong internal innovations to attract regular investors and keep them interested. So far, there are only two internal factors that have triggered FOMO in this bull run:
Memecoins
airdrop
Airdrops have re-energized old and new DeFi dApps, generating seemingly positive engagement metrics, but these are mostly fake and driven primarily by speculators who use dApps solely for the airdrops.
The enthusiasm around the airdrop has waned, evident in the drop in sentiment on X and falling interest rates on lending platforms as farmers borrow assets to maximize their yields.
You can see that the stablecoin IPOR index has dropped from 20% to 7% since March, but is still higher than it was a year ago.
This is nothing new to anybody. What is uncertain is how we can continue to issue tokens to the market and convince people to buy them.
This is my biggest obsession. Every cycle, we find new ways to release tokens into the market. Points for airdrops is just the latest trend, but it will certainly not be the last. The first people to realize how it works will get the highest return on investment (ROI). I wrote about how it works before this bull run started.
I bet on Friend Tech to revive the "fair launch" model with a 100% airdrop, but I lost. Similarly, Nostra's 100% launch unlock and Ekubo's 1/3 allocation airdropped to the community and the other 1/3 sold within two months produced mixed results. The token finally rose, but the airdrop was small and the market cap is still low.
We also conducted some experiments on gamification of points.
However, the results of these experiments have been mixed, for example, the $CLOUD airdrop disappointed me.
Rebranded token migrations are also promising. This happens when a protocol adopts a new brand and migrates tokens to start over, rather than opting for a simple v2 or v3 upgrade. We’ll see how Fantom’s migration to Sonic performs, but Connext’s migration to Everclear and Arweave’s new AO tokens have produced mixed results with AR farms.
Only memecoins seem to be still performing relatively well at the moment.
As the market turned bullish this week, memecoins emerged as the best performing sector. This means that speculators are bullish but waiting for the right time to enter the market.
With nothing else going up besides memecoins, the team was desperate, so it’s no surprise that Jupiter decided to launch a new “experimental” memecoin in partnership with Irene.
In summary, some crypto teams are innovating, but most prefer to go the safe route (like deBridge) because nothing new is good enough: newly launched tokens are selling off under unlocking pressure (although ZRO is doing well).
Making money on memecoins is equally challenging as thousands of memecoins enter the market and most go straight to zero.
I believe this uncertainty about the future of token issuance is why DeFi tokens may perform well later in the cycle.
DeFi OG tokens like UNI, MKR, LDO, AAVE, and SNX have large circulating supplies, reducing the risk of a massive sell-off.
With potential regulatory clarity, these tokens, backed by solid business models and revenue generation, could attract more inflows. In particular, DeFi OG tokens offer an interesting hedging option as the market tires of memecoins and new tokens pour in.
Currently, memecoins are doing well because tokens with utility are considered “securities” by regulators, while memecoins lack utility and are less risky from a regulatory perspective. Positive signals from the government could significantly change the cryptocurrency mindset.
But it's all still full of uncertainty.
Consumer Applications
The fatigue with high-ticket infrastructure projects is real. While few are excited about new AI-based zk Layer 2s like Zircuit, this is actually a positive sign.
We are finally realizing the need to develop consumer applications through this infrastructure.
Venture capital money is finally flowing more towards applications rather than infrastructure. Hopefully, some useful products will emerge from this.
The biggest winner in the consumer application space is Polymarket. Not only is it great for speculation, it also provides a reliable source of truth in an era dominated by biased legacy media.
Although Polymarket is one of the coolest consumer applications of crypto, we currently have no way to invest in it directly! However, I am preparing for a possible airdrop by placing bets on multiple markets with multiple wallets.
If Polymarket were bold enough, they should have launched their token before the US election, when the market would be hottest.
If consumer apps become the new trend, I recommend you experiment to see what you like and find ways to invest in them before everyone else. That’s what I plan to do.
Some consumer apps worth trying:
Receipts: Share your running, cycling and exercise records and earn points (not yet online)
Sound.xyz: Discover new music and prove you were first
Fileverse: Peer-to-peer file sharing with enhanced privacy
You can check out other applications in this article by David.
Finally, you should definitely try Farcaster and Lens. These are probably the biggest winners in the consumer app trend.
There is a different type of uncertainty within. What worked before no longer works. We have hit a wall and need new innovative ways to move forward. While some innovations are emerging, it is not clear what will truly disrupt the new token issuance mechanism. I am bullish on the crypto market because I believe I can be one of the first to find it.
#比特币大会 #美国大选如何影响加密产业？ #MtGox钱包动态
