On November 21, 2024, 137Labs hosted a highly anticipated X Space event titled 'BTC Hits New Highs Again! Market Narratives and Future Opportunities Analysis.' This event invited several well-known guests from the crypto industry, including former VC secondary analyst Bugsbunny, seasoned trader Qiurong, and 137Labs research director Oneone, to explore the driving factors behind BTC's recent price surge, market dynamics, and future development opportunities.
During the event, guests conducted in-depth analyses of Bitcoin's latest market trends from multiple perspectives, including macro policies, ETF effects, and industry cycles. They compared this bull market with those of 2017 and 2021, interpreting Bitcoin's potential to break the $100,000 mark and sharing their thoughts on how investors can formulate appropriate strategies. Additionally, the guests discussed the differentiation of altcoins, the development of Bitcoin ecosystem projects, and the potential of innovative models like BTCFi, providing different viewpoints for crypto market participants.
This article will take you through this content-rich discussion, providing an in-depth interpretation of Bitcoin's current market performance and future opportunities, helping you seize more value and opportunities in the rapidly changing crypto market.
Q1
What are the main driving factors behind BTC's continuous new highs? Is it driven by ETFs, MicroStrategy, financial institutions entering the market, or favorable macro policies? How do this round of BTC's rise and the bull markets of 2017/2021 differ?
Qiurong pointed out that the core driver of this BTC rise lies in the imbalance of market supply and demand, as current demand clearly exceeds supply, driving prices higher. From a macro perspective, the most important factor is the upcoming Bitcoin halving in 2024. The halving directly reduces the issuance of new BTC, which has been a critical driver in past bull markets, and the current market conditions continue this pattern.
At the same time, Qiurong mentioned the impact of interest rate cut expectations on the market. As the possibility of interest rate cuts increases, the market needs to seek appreciation assets, and Bitcoin has become a core target in this context, attracting a large inflow of funds.
Regarding the recent hot topic of ETFs, Qiurong believes their role is not decisive; they merely provide a channel for traditional funds to enter. MicroStrategy's ongoing purchases are described by Qiurong as a 'high-level Ponzi structure,' where profits from Bitcoin are reinvested into the company dividends and then reinvested back into Bitcoin, forming a positive cycle. Although this model has attracted market attention, its overall impact on the market is limited.
When discussing the differences from the bull markets of 2017 and 2021, Qiurong mentioned that this bull market is led by the Chicago Mercantile Exchange, unlike past structures dominated by exchanges. Additionally, this round of gains is smaller compared to previous ones, and the market trend is not as fierce as that of 2020.
Bugsbunny believes that a major difference in this round of BTC's rise is the change in the macro environment, especially the impact brought by the U.S. election results. He pointed out that before the election results were announced, market sentiment was generally pessimistic. However, as the potential administration of Trump and Musk became the focus, it injected enormous confidence into the market. Bugsbunny believes this sets the tone for the crypto industry in the next four years, bringing unprecedented positive expectations.
He also mentioned that looking back at the bull market of 2021, market hotspots like meme coins were largely triggered by Musk's comments. This time, the market faces a scenario controlled by the Republican Party in both houses, along with a Trump team that is more embracing of the crypto industry, which will bring a completely different situation for the industry.
Additionally, Bugsbunny also agrees that the halving is an important factor driving BTC's price increase. He pointed out that unlike previous halvings that quickly reacted in the market, this halving effect, combined with more concrete and explicit macro benefits, has led to significant market performance.
Q2
FGI above 80 for over 10 days, what are the judgments on short-term trends, can it surpass $100k, what strategies exist, and what specific tools or methods, such as options? Long-term, what strategies does BTC have, and what methods can increase returns?
Bugsbunny believes that whether BTC can break $100,000 depends more on market psychological expectations and the macro environment. He mentioned that recently, funds in the market have been closing $80,000 call options bought earlier, instead opting for $120,000 call options, reflecting market optimism for higher price levels. However, $100,000 itself is not a strict target price.
He noted that in the short term, $100,000 may face some selling pressure, particularly before the FOMC meeting on December 17-18, as market concerns about an economic recession may impact the trend. However, in the long run, Bitcoin's positioning is changing, gradually shifting from a high-risk asset to a core asset more recognized by the mainstream. As ETFs become more prevalent and the policy environment changes, it is expected to continue attracting capital inflows.
In terms of strategy, he suggests paying attention to volatility arbitrage opportunities. Bitcoin's volatility often shows significant fluctuations due to market sentiment, and investors can achieve stable returns by studying Delta-neutral strategies. Additionally, he emphasizes that the current market is still in a high uncertainty phase. If one hopes to make a stable layout, it may be better to wait for clearer policy directions after January next year, especially considering the market changes that may arise with Trump's formal administration.
Oneone analyzed BTC's short- to mid-term trends and market status from a spot perspective. He mentioned that approximately $62.9 billion flowed into the market in the past 30 days, with $53.3 billion entering the Bitcoin and Ethereum networks, and stablecoins increasing by $9.6 billion. This inflow of funds has supported the current price of BTC, but there is also pressure on the market in the short term. Between November 8 and 13, approximately 128,000 Bitcoins were sold. Without the prior inflow of funds for support, BTC's price might have remained in the $60,000 to $70,000 range instead of the current over $90,000.
He believes that Bitcoin's current market performance is similar to the cycles from 2018 to 2022, where market movements driven by funds generally last for 4 to 11 months. Currently, BTC is in the second month of its upward cycle, with a significant portion of inflow funds coming from ETF momentum, making CME an important force in market pricing.
Oneone also mentioned that after BTC's price broke $90,000, it attracted a portion of traditional asset allocations to shift, such as silver assets moving toward Bitcoin. He pointed out that Bitcoin's current total market cap has surpassed symbolic global assets like silver, further enhancing its appeal as an investment target. However, the market is also showing signs of overheating, with the MVRV indicator recently rising from 2.62 to above 2.7, entering the later stage of the bull market, but still having room before reaching peak levels.
From the perspective of long-term holders, recently, 128,000 BTC were sold, and the high-cost range for these funds is around $80,000 to $90,000. The future market trend depends on whether inflow can continue to exceed selling pressure. Oneone believes that if the inflow is insufficient, BTC may pull back to lower price levels, but the decline is expected to be limited. Additionally, ETFs currently have weekly inflows ranging from $1 billion to $2 billion. He advises investors to closely monitor this figure. If inflows drop below $1 billion, caution should be exercised regarding the risk of market correction. Finally, he mentioned that $100,000 could become an important psychological threshold for BTC, aligning with Fibonacci retracement sequences and integer thresholds. Significant market volatility may occur at this price level.
Q3
At what stage is the current BTC rise? Where might the top be? What indicators can be referenced?
Qiurong pointed out that BTC's rise is still in the mid-to-late stage, and a top has not yet formed. From a technical perspective, BTC has not reached key resistance areas, and various indicators show that prices still have room for further increase. $100,000 is almost a certain target price, whether it is a spike or a solid breakthrough, this round number will become the market's focal point.
In judging the top, Qiurong suggests paying attention to the market share ratio of USDT as a reverse indicator. The low point of USDT's market share typically corresponds to BTC's high point, and currently, this indicator is close to its weekly demand zone but has not yet reached it, indicating that BTC's upward space still exists. Meanwhile, the MVRV indicator is nearing the critical value of 3, but has not yet reached a top signal, though it shows that the market has entered the mid-to-late stage of the bull market.
He advises investors to avoid going short at the current stage, especially engaging in left-side positions in futures or contract trading, which can be very risky. CME, as a major market operator, often causes significant market fluctuations during the volatility period after U.S. stock market openings, making short positions susceptible to liquidation. Therefore, if participating in contract trading at this stage, one should primarily focus on long positions and strictly set stop-losses to control risks.
From on-chain data to technical charts, there are currently no signs of a top for BTC. Qiurong believes that breaking $100,000 is a certain event, and this threshold will eventually be breached.
Q4
Which assets may perform well after BTC rises? (such as Bitcoin ecosystem projects, mining stocks)
Bugsbunny believes that following BTC's rise, potential beneficiary assets are not limited to mining stocks, but also the Bitcoin holding data that may be disclosed by U.S. companies. He pointed out that the earnings season for U.S. stocks in January could become an important node. If companies like Microsoft and Apple begin to disclose their Bitcoin holdings, other small tech companies are likely to follow suit. This trend would gradually endow Bitcoin with attributes similar to gold reserves, being viewed not only as an investment tool but also potentially becoming a vital component of corporate balance sheets.
He further stated that the concentration effect of liquidity in U.S. stocks will grant Bitcoin a higher financial status. If this trend continues, Bitcoin's performance will surpass that of traditional mining stocks, bringing it closer to the role of gold as a reserve asset. Although mining companies may benefit, they will no longer be the sole focus.
Regarding other assets in the Bitcoin ecosystem, he expressed caution about the prospects of projects like Ordinals. He believes these projects are more of a paradigm attempt but have flaws, such as complex designs and high usage thresholds. Therefore, he is not optimistic about the development of inscription-type projects, believing they will struggle to play an important role within the Bitcoin ecosystem.
Qiurong added that he holds a negative view of Bitcoin ecosystem projects, believing that Bitcoin does not need to rely on inscriptions or other ecological tools to empower miners or increase returns. Bitcoin itself is the most complete and decentralized system, a characteristic that other blockchain projects cannot compare to. Only Bitcoin has achieved true decentralization.
He further mentioned that Bitcoin's ecosystem has actually begun to be established at the national level. From El Salvador to Bhutan, and possibly future countries like Argentina and other Latin American nations, Bitcoin is gradually becoming the fiat currency choice for high-inflation countries. This level of acceptance enables Bitcoin to form its own system without additional ecosystem construction. Bitcoin has already become the greatest invention of the 21st century, capable of changing the fate of countless individuals.
Regarding assets likely to benefit from this round of market conditions, he mentioned MicroStrategy (MSTR). He described MicroStrategy's model as a 'positive cycle' where continuous Bitcoin purchases drive up prices, using the gains from price increases to benefit the company and shareholder dividends. This can indeed yield significant profits in a favorable market environment.
Additionally, he mentioned that Tesla and Musk, as significant supporters of Bitcoin, are also worth paying attention to. Tesla's holdings may further boost market sentiment. Similarly, mining-related stocks like MARA may benefit, although specific entry points need to be analyzed in conjunction with market trends.
Regarding Bitcoin ecosystem projects, Qiurong is not optimistic. He explicitly stated that rather than investing in these uncertain assets, it is better to hold Bitcoin directly.
Oneone highlighted the cigarette butt-type investment strategy. He believes BTC is undoubtedly the highest quality asset in the market, but for investors with smaller capital, focusing on temporarily undervalued assets in the market to achieve higher returns is a feasible path.
He mentioned that the core of cigarette butt-type investment lies in buying undervalued assets at low prices when the market is mispricing them. For example, many altcoins may currently be sold at second-rate asset prices, which presents opportunities for short-term snowball gains. Despite the high volatility in the altcoin market, selecting projects with innovative narratives, technologies, and gameplay may yield substantial returns. For instance, Solana achieved a significant rebound when it introduced DePIN at a low point. This phenomenon suggests that new narratives and innovative gameplay are crucial considerations when choosing assets.
He also pointed out that projects in emerging trends are worth special attention, such as RWA, which has potential in combining real assets with blockchain technology. Additionally, innovative projects based on payment fields (like PayFi) and those with novelty in gameplay and narrative may also gain market favor in this round of market conditions.
Oneone believes that the current market's technological innovation has slowed, but changes in narratives and gameplay can still give rise to new investment opportunities. He suggests that investors focus on assets that can combine new narratives, new gameplay, and new technologies while being adept at seizing short-term opportunities to continuously optimize asset allocation through a snowball effect. However, he warns that the altcoin market carries significant risks and not all assets will perform well, so investors need to be particularly cautious.
Q5
The relatively effective barbell strategy over the past year, version 1.0 btc + meme, version 2.0 btc + Solana meme, version 3.0 US stocks and btc + Solana meme, is it still effective in the coming year?
Qiurong believes that the barbell strategy popular in the past year is still applicable, but the core lies in the correct allocation of asset proportions. He emphasizes that the most crucial 'weights' in the barbell strategy must be Bitcoin, which serves as the foundation of the entire portfolio and should have the highest proportion. If meme coins are used as the primary allocation, once the market fluctuates, it may face extremely high risks, even going to zero. Therefore, he suggests using Bitcoin and Solana as core assets while reasonably mixing in a small amount of high-risk, high-return assets, such as meme coins or emerging sector projects (like RWA or GameFi), which can be considered similar to 'lottery ticket' allocations, hoping to achieve unexpected returns under controlled risk.
Qiurong pointed out that in this round of the bull market, only Bitcoin and SUI have reached historical highs, while only Bitcoin, Solana, and SUI have broken previous highs. This indicates that mainstream assets remain the strongest performers in the current bull market, while other tokens have mostly underperformed expectations. After his analysis, he found that the vast majority of altcoins, including newly launched meme coins and other animal-themed tokens, have failed to reach similar heights. This market pattern once again verifies the necessity of allocating major funds to core assets.
For the coming year, Qiurong believes that this barbell strategy remains effective, provided that the bull market continues to be led by institutions like the Chicago Mercantile Exchange. If there are no significant changes in the market environment, investors can continue to adopt Bitcoin + Solana as the main allocation, supplemented by a small amount of meme coins or other high-risk assets. He cautions that while altcoins may rebound, the probability of substantial increases is extremely low, around 0.2%, thus requiring careful selection to avoid allocating significant funds to these assets.
Overall, Qiurong suggests maintaining a steady approach in the barbell strategy, ensuring that core assets like Bitcoin and Solana dominate while using a small amount of funds to explore high-risk assets for potentially higher returns.
Q6
The altcoin-season-index latest data is 28, BTC's market share is at a new high since February 2021, do Alts still have opportunities, or do VC coins still have opportunities, and why is confidence so weak? What might be the turning point, and what signals can be referenced?
Qiurong holds a pessimistic view of the current altcoin market outlook, believing that altcoins have almost no chance of a turnaround. From a technical analysis perspective, most altcoins have already fallen to extremely low levels, and even at the indicator level, there are no signs of a rebound.
He specifically mentioned that Ethereum and its L2 ecosystem tokens are also unlikely to recreate their past glory. From the monthly chart, Ethereum still has some space from the demand zone. This means the probability of Ethereum breaking new highs in this bull market is very low, let alone other tokens attached to its ecosystem.
He pointed out that for a true altcoin season to occur, the rise of Total 2 must significantly exceed that of Bitcoin, and the market must show sector rotations and multiple projects experiencing significant increases. However, currently, altcoins are performing far below Bitcoin, overall in a state of insufficient rebound. If investors wish to seize the rebound opportunity in altcoins, they need to observe whether a significant rebound signal can form in the weekly demand zone. But as it stands, the performance of altcoins is more of a localized rebound, making it difficult to form a cohesive upward trend.
Bugsbunny believes that the current performance of the altcoin market needs to be viewed by type. Some projects that can adapt to current industry changes may still have opportunities, while those that rely on traditional models and fail to keep pace with the times could be eliminated by the market. He mentioned that the main change in the market is the path of capital inflow and the shift in investment logic, which significantly affects the prospects of altcoins.
Bugsbunny pointed out that current VC investment attitudes are very cautious. The traditional "listing - exit" model is no longer as effective as directly holding Bitcoin, leading to decreased interest from investment institutions in new projects. Meanwhile, he believes projects with self-sustaining capabilities—those that do not rely on selling tokens for survival—may stand out in this market cycle. Such projects are characterized by their ability to create value through actual products and services, rather than merely relying on financing and speculation to survive.
He cited Cardano (ADA) as an example, pointing out that although this project did not even have a public chain in its early days, it has abundant funds and consistently ranks in the top ten by market cap, showing relatively stable performance. This indicates that projects with strong financial backing still have the ability to maintain market enthusiasm through price manipulation during a bull market. Therefore, screening for projects that have financial strength and have accumulated substantial chips early on may be a relatively prudent strategy.
Additionally, he emphasizes that the current growth of the crypto market relies more on the inflow of traditional capital rather than the push from traditional exchanges. Platforms like Robinhood are becoming important gateways for compliant funds to enter the crypto market. This capital usually comes from a broader traditional financial market rather than from early crypto native users. This trend will significantly affect the distribution of market liquidity and provide additional opportunities for certain projects.
In terms of specific project selection, Bugsbunny mentioned that projects like Polkadot, despite having strong technology and vision, may perform poorly if they lack funding support. He believes investors need to carefully filter and focus on projects with financial advantages, resource integration capabilities, and those that align with new trends, rather than blindly chasing outdated or disadvantageous assets.
Oneone shared his views on altcoin season from a trading strategy perspective. He believes that altcoin season is likely to arrive, but the key lies in how to choose the right assets and formulate a reasonable allocation strategy. He stated that the altcoin market is not without opportunities; it just requires more precise filtering and clearer investment logic.
He defined the barbell strategy as allocating high-certainty and high-stability assets, such as Bitcoin or Ethereum, in most positions while using a small portion of funds to try high-risk, high-return assets like altcoins or meme coins. His core trading philosophy is to control risk, seek cyclical opportunities, and buy potentially undervalued altcoins at low prices through cigarette butt-type investment strategies. He mentioned that his typical allocation is a '631' structure, with 60% in Bitcoin or Ethereum, 30% in assets with externalities or potential, and 10% for high-risk speculative assets like leverage or meme coins.
Oneone believes that the probability of altcoin season lies in changes in the liquidity of market funds. When Bitcoin reaches a certain high level, funds typically flow out to smaller market cap assets, such as altcoins. He emphasizes that while most altcoins may have died, there are still opportunities among the remaining projects. He suggests adopting a diversified investment approach, such as allocating 20% of funds to multiple potential projects and continuously accumulating returns through a snowball strategy.
Additionally, he believes that the key to selecting altcoins lies in the updates of narratives, gameplay, and technology. Projects that can provide new narratives or have practical applications will be more competitive.
Oneone also mentioned that an important precondition for altcoin season is the overflow of market liquidity. When Bitcoin's market cap reaches a certain height and new liquidity enters the market, funds will begin to seek higher-yielding targets. This logic is based on the operation modes of market makers. He believes that when Bitcoin's profit margins decrease, market makers will shift funds to smaller market cap, more volatile altcoins, thus driving up those assets.
He concluded that he firmly believes in the arrival of altcoin season, but the premise is that investors need to have clear strategies and precise asset selection. Through reasonable fund allocation and diversified investments, altcoins' returns may exceed those of Bitcoin at certain stages.
Q7
The 'externality' of altcoins, whether projects that do not rely on selling tokens to maintain project and product survival possess stronger self-sustaining capabilities, may stand out in competition.
Oneone's understanding of externality centers on the fact that externality is a crucial factor for a project’s long-term survival in the market. He noted that tokens or projects lacking actual externalities often rely solely on narratives for support. When the narrative heats up fades, these assets can quickly plummet to zero. For example, NFTs once dominated the market, but as liquidity dried up, their associated narratives became unappealing, leading investors to withdraw.
He mentioned that many tokens in the market go through three stages: the washout stage (extremely low prices), the transfer of control stage (handing over during the rise), and the final retail investor acceptance stage (project parties and market makers profit and exit). Tokens lacking externality often accelerate this process, as some meme coins can go from rising to zero in just minutes. In contrast, projects with externalities can maintain token value through long-term buying demand via token holder dividends, continuous buybacks, etc.
For investors, Oneone emphasizes caution regarding the following three types of projects or behaviors:
Projects supported solely by narratives: He mentioned various 'narrative waves' over the past few years, from NFTs to meme coins to Web3, each hyped as the future direction, but most were short-lived. He believes that while narratives can attract market attention in the short term, investment must consider whether the project possesses actual externalities.
"Constructive" speculation: This refers to projects that create hype through extensive social media promotion. Such behavior often serves merely as short-term pump tools, lacking long-term value support.
"Pump and dump" promotion: He pointed out that certain projects, once overly hyped by influencers or KOLs, may become contrary indicators. He advises caution against these herd-following phenomena.
Oneone concluded that the core of investment is not how much money was made, but how many pitfalls were avoided. For blockchain investments, he maintains a steady attitude, believing that slow is fast, and steady is also fast. He emphasizes that blockchain and mainstream assets like Bitcoin and Ethereum are his core belief areas, but investment must focus on the actual value and externalities of the project, avoiding the traps of excessive speculation.
Q8
BTC yield, further deriving BTCFi, possible future explosion time nodes and factors, such as Babylon.
Bugsbunny pointed out that the current status and potential of the Bitcoin ecosystem differ significantly from Ethereum and analyzed possible breakout time nodes and influencing factors. He mentioned that funds currently focusing on the Bitcoin ecosystem face significant exit challenges, as some projects struggle to go public or achieve liquidity, thus limiting development. However, the Bitcoin ecosystem still has considerable growth potential, especially regarding participation opportunities for retail investors.
In contrast, the Ethereum ecosystem is relatively mature, and the participation and available gameplay for retail investors are nearing saturation. The Ethereum ecosystem tends to maintain the interests of larger holders, often threatening existing interest structures while providing opportunities for newcomers, which may face scalability bottlenecks. The Bitcoin ecosystem, on the other hand, is in the early stages of development, making it more suitable to meet retail demand and provide more participation space. This comparison can be understood as Ethereum being like a highly developed economy, while the Bitcoin ecosystem resembles a rapidly growing emerging market.
He believes that if the Bitcoin ecosystem can achieve innovation in its model, it may attract more market attention. For example, tools like DeFi projects such as Babylon could make it easier for users to participate in Bitcoin-related yield mechanisms, potentially becoming important breakout points. Furthermore, the early characteristics of the Bitcoin ecosystem determine its higher flexibility to adapt to market demands and establish stronger connections with retail investors, which is one of its key differences from Ethereum.
Oneone specifically mentioned Babylon, considering it the only project in the current Bitcoin ecosystem that can directly utilize Bitcoin's security. Babylon uses technology shared with Bitcoin, which enables it to achieve a deep collaboration in security with Bitcoin. He believes this design allows Babylon to perform exceptionally well among current Bitcoin ecosystem projects.
In contrast, other Bitcoin ecosystem projects, such as STX, utilize the POX mechanism, where miners compete for blocks and record results on the Bitcoin blockchain. Oneone believes that while this mechanism also has certain innovations, it does not match the direct use of Bitcoin's model in terms of technology and security.
However, he also pointed out that a significant issue currently facing the Bitcoin ecosystem is insufficient user activity. Especially after the enthusiasm for inscriptions waned, many players have exited the Bitcoin ecosystem. This has led to the current Bitcoin ecosystem projects being more capital-driven, with real user participation remaining inadequate. Therefore, even if technically advantageous, whether Babylon can be widely adopted in the future still needs to be observed in terms of actual market acceptance and usage.
Conclusion
Through this in-depth discussion in the X Space, the guests analyzed from different angles the driving factors behind BTC's continuous rise, future market opportunities, and the optimization direction of investment strategies. Whether it is the potential of the Bitcoin ecosystem, the differentiation of altcoins, or the innovative development of BTCFi, they provided different analyses for investors. In the rapidly changing environment of the crypto market, grasping macro trends and carefully selecting quality assets will be key to achieving long-term returns.
This article is for sharing and exchange only and does not constitute investment advice.
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