It's time to buy some DeFi and the old kings!

Although the large-cap old altcoins have shown a strong profit effect, every time these coins double, they often increase the circulating market value by hundreds or even thousands of billions of dollars, which also means their ceiling is ultimately not high. Therefore, the rise of old altcoins more serves to elevate the overall valuation level of altcoins and ignite market sentiment. The projects that can truly gain high valuation premiums in each bull market are often closely related to the narrative logic of growth.

In a market that is very averse to high FDV new coins, the newly issued altcoins from 2020-2021 are likely to become a new breakthrough for funds, mainly for the following reasons:

1. Complete bear market cycle baptism: All these coins have experienced a complete bear market cycle, and the valuation has been sufficiently deflated. Meanwhile, the circulation rate of most coins is above 80%, and the VC shares have mostly been fully unlocked within three years, making the market relatively clean.

2. Capital accumulation effect: Historically, every round of large-scale capital investment usually produces an accumulation effect. For example, after the burst of the internet bubble in 2000, the industry experienced a three-year bear market, but ultimately 12% of companies rose from the ashes and entered a long-term bull market. 2020 to 2021 was a peak level for crypto investments, but currently only the SOL project has completed its transformation, which is far from enough. In addition, the second bull market has not been accompanied by the arrival of a technological revolution, and many new projects still follow the technological improvement route, which means that projects from the previous cycle still have a first-mover advantage.

Historically, the most significant characteristic of the first phase of the altcoin market starting is indiscriminate buying, eliminating low prices. Subsequently, the market will enter a full reshuffle phase, and coins with good fundamentals will welcome aerial refueling in the second phase. In terms of selection, I still recommend allocating to the old kings and DeFi leaders.