I started this new account after being away from the industry for a year. I thought that there would be rapid changes in the fast-growing industry, but to be frank, I didn't notice any changes.
Those who are not supposed to make money will still not make money, and those who have enough money will still have enough money.
There were not even many newcomers in the industry, specifically KOLs.
After all the playing, it's still the same old faces, but some may have changed jobs, some may have gone bankrupt, most people remain the same, and few have become rich.
Looking at it this way, it was really the right decision to quit the circle at that time. I took care of my body and didn’t miss the market opportunity - because there was no big market opportunity at all.
During this period of in-depth conversations with my old friends, I discovered three huge crises in today’s industry, and I would like to share them with you as my personal opinion.
First, it is related to what was mentioned in yesterday’s article. If you are interested, you can read yesterday’s article:
We have finally and inevitably entered a special period that no one has ever experienced before.
But what Ju Zuo did not mention in this article is how the project party performed as a very important role in it.
In fact, not only the entire cryptocurrency trading market, but even many project parties also operate in this way:
High locked-up value and low circulation volume, high coin price and low liquidity.
High lock-up is for the convenience of market control, and low circulation is for the safety of currency prices.
When most of the chips are in one's own hands, the external currency volume will not pose any threat to the currency price at all, so the market value of the entire project can be maintained at a relatively high level.
The advantage of this is obvious, it can ensure that each chip is sold at a relatively high price. But the disadvantage is that the liquidity is very poor, and the leeks dare not buy coins at such a position.
Therefore, in order to trick more people into getting on board, they can only keep making favorable publicity and promotions, and even hint at pushing up the market, just to lure more people into the trap.
If the leeks don't take the bait, they also have ways to cash out - refinancing, selling locked positions, or even margin calls.
Refinancing is easier to understand, and it basically means joining forces with larger market makers to harvest leeks. But it is hard to say whether the leeks are harvested by the joint efforts or the market makers are harvested by the project party.
Selling locked-up quotas has become popular since last year. You can tell what it means just by looking at the name. There is no need to explain too much. It is sold at a discount anyway. Who can blame the fact that institutions still had money at that time? There was clear stupidity in their eyes.
To put it simply, a pledge liquidation means to increase your own popularity, then pledge on DeFi, and then sell off your assets crazily, causing yourself to go bankrupt.
In this way, two profits can be settled, one is the money from selling at a low price, and the other is the money from on-chain liquidation. Although the loss is considerable compared to the current coin price, this method of settlement is very safe.
Juzuo has also written a special article before, you can take a look if you are interested: When the project party wants to buy a multi-million mansion for 0 yuan...
The second crisis is that the volatility of the industry is decreasing.
It has been exactly 7 years since Ju Zuo entered the circle in 2017.
As someone who has experienced this, in 2017, there were a lot of coins that could increase by a thousand times. If a coin couldn’t open at a hundred times, it was simply garbage.
When the next bull market comes, although there are not many thousand-fold coins, hundred-fold coins are still emerging in an endless stream. Whether it is chain games, DeFi or NFT, it is a very lively period. Everyone can make incredible profits from various outrageous tracks or projects.
Now, don’t even talk about a hundred-fold coin. Even if you can get a 10-fold return, it’s like hitting a frog with a steel pipe - awesome.
Even some very popular projects can generate several times the profit as soon as they are launched.
Now there are more and more project parties, and they are becoming more and more sophisticated. They are unwilling to give such high returns to the market, and the market does not have such a strong passion to rush in and carry the sedan chair.
So we entered a death spiral.
Apart from these new projects, the volatility of Bitcoin is also decreasing, which is an inevitable law of the development of things.
When the market value increases, volatility will inevitably decrease.
For example, the price of Bitcoin increased from 10,000 to 20,000, which is a doubling.
Bitcoin fell from 60,000 to 50,000, a drop of only a dozen points.
The same $10,000 has completely different volatility.
On the one hand, it is due to market consensus and economic laws, and on the other hand, it is due to external factors, such as compliance.
Last time, a friend raised a point that I thought made a lot of sense. He said that the previous positive factors in the industry were all endogenous, such as the halving of Bitcoin, the launch of the mainnet, the second-layer applications, the launch of DeFi, and so on.
But now, almost everything depends on the Federal Reserve and the U.S. stock market.
As long as there is bad news, the market will crash.
But even if something is good, it may not necessarily be useful.
This is a bit like drinking poison to quench thirst. In the beginning, too many external forces were introduced in order to achieve rapid development, but now they are beginning to be countered by external forces.
In Ju Zuo's opinion, this is actually equivalent to handing over the dominance of cryptocurrency, which is a very fatal thing, but there is no way, it has already been handed over.
This is not the most terrible thing, because it is a long-term pain and no significant cause and effect can be seen in the short term.
But the short-term pain makes everyone at the moment very uncomfortable.
Two words: confused.
The iteration speed of the industry has dropped significantly, and innovation has come to an end.
The ICO innovation in 2017 has led to the vigorous development of the spot market.
Later, the traditional financial model was copied, and contract trading reached its climax.
Then came on-chain innovation, including DeFi, chain games, and NFT.
But now, apart from the inscriptions, there seems to be no new narrative.
The speed of industry iteration has slowed down, and there is a lack of new narrative expectations. The entire industry, from institutions to project parties to investors, has fallen into a period of confusion.
We know that the future is bright and promising, but how can we get through this garbage time?
