How to Find Your Wealth Code in the Hottest AI Narrative
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How to Find Your Wealth Code in the Hottest AI Narrative
Don't just chase popular projects.
Navigating Web3 tides with focused insightsAuthor: terry
Translation: TechFlow
First, a disclaimer:
I'm not the top-tier trader, but below are some key insights I've gained over the past two months while exploring the AI meta with several industry elites.
The goal of this article is not only to distill the concepts I’ve learned but also to help you better understand and navigate this market through practical examples and actionable advice.
Let’s begin.
Attention vs. Fundamentals
Crypto prices typically rise for two main reasons:
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Attention (hype)
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Fundamentals (real value, technology, applications)
Tokens driven by attention:
These tokens surge in price primarily because everyone is talking about them (e.g., meme coins trending on X/TikTok). In such cases, prices can skyrocket quickly—but also crash just as fast, since they often lack "intrinsic value" and are purely hype-driven.
Tokens driven by fundamentals:
These have real substance—such as innovative technology, strong development teams, strategic partnerships, or useful products. Even if the price dips short-term, it's usually just "noise," as their long-term potential remains strong.
For example, a meme coin may rise due to heavy mentions on Twitter and TikTok, but once attention fades, so does the price. In contrast, an established project building AI tools and partnering with well-known companies may see slow initial price movement, but as more people witness its product's real-world impact, the price could steadily climb.
When trading on hype, closely monitor price momentum and exit promptly when it weakens. When investing based on fundamentals, short-term volatility may be irrelevant if you believe in the project’s long-term trajectory (this is my personal investment style). However, if a project’s fundamentals deteriorate or shift, cut losses decisively. Never grow overly attached to any single investment.
Seek Expansion Potential
A smarter strategy is to focus on projects with the potential for exponential value growth, rather than chasing small gains.
Instead of targeting a minor opportunity—say, a project growing from a $1M to $5M market cap—look for ones you believe could scale from $5M to $100M or even $1B. Executed well, such trades could yield life-changing returns, not just quick pocket money.
You should always seek opportunities with significant upside potential. This often means focusing on early-stage projects with strong fundamentals or unique innovation, rather than already-hyped, well-known coins.
Catch Early Momentum
Profitable trades often come from joining a trend before it goes mainstream. If you can identify a promising project or trend (like AI infrastructure or swarm/multi-agent architecture) ahead of others, you stand to gain the most.
Simply put, if you started researching AI-related tech or projects before "AI" became a buzzword, you might have discovered a high-potential token at a very low market cap. As the AI wave grows and more participants enter, prices rise. Being early allows you to capture the majority of that upward move.
Spend time understanding emerging AI trends—such as multimodality, decentralized inference, swarms, traffic engineering, agentfi—and get involved before they make headlines. This may require monitoring developer updates, reading whitepapers, and tracking social media discussions.
Build a Trading Process
Gaining an edge—through custom scripts, analytics dashboards, or efficient research methods—can help you spot quality opportunities faster than most.
You can use crypto price alert bots or platforms like Dexscreener to track new token launches. When a new project emerges and suddenly sees trading volume, investigate immediately. Check its official website, team background, X account, Telegram group, Discord, etc. If it looks promising, decide whether to invest right away.
Speed is critical. You might even start with simple tools—like an X list curated around known "AI quant" accounts or active Telegram groups—to stay on top of new developments. Over time, you can upgrade to more advanced tools, but begin with free and simple options. The key is this: you must have a strategy, a process, that gives you an edge in the market.
Avoid the “Mid-Curve” Trap
It’s often simpler to either invest in proven leaders or discover entirely new, low-market-cap projects. Mid-cap projects without clear differentiation carry higher risk, as they can easily be overtaken by newer competitors.
Suppose you’re choosing among these options:
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Project A: $1B market cap, well-known, consistently launching new features
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Project B: $1M market cap, novel idea, still under the radar
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Project C: $50M market cap, no innovation, constantly overshadowed by others
Beginners might think Project C is “safer than B but cheaper than A.” But if C stagnates—lacking growth or innovation—it’s far less likely to deliver outsized returns compared to discovering a promising B or sticking with a reliable A.
The point is: if you do choose mid-cap projects, ensure they have a clear path to stand out. Otherwise, they may just waste your time and capital—ultimately, this comes down to opportunity cost.
Focus on Industry Growth (Why I Focus Solely on AI)
AI is a long-term trend. Its impact extends beyond crypto into virtually every industry.
When an entire sector—like AI—shows massive long-term potential, the whole market can expand dramatically beyond current valuations. Early leaders in that space may appreciate significantly over time.
If the entire AI agent ecosystem is currently valued at ~$10B, but you believe it will become one of the dominant industries within a few years—scaling to $100B or more—then leading projects (with strong communities and products) could see 10x or greater growth as the sector matures.
Identifying and investing in those narrative leaders today can become a safer and more profitable choice as the industry evolves.
Adapt and Continuously Improve
AI evolves rapidly—and crypto even faster. You must constantly update your strategy, reflect on what works and what doesn’t, and learn from mistakes.
A good practice: at the end of each month, write down your top 5 winning and losing trades. Ask yourself: Why did I buy? When and why did I sell? Could I have spotted the trend earlier? By regularly reviewing these questions, you can identify patterns in your decision-making and improve over time.
Treat trading as a skill to be refined. Keep trade journals, assess market sentiment, and discuss strategies with other crypto traders to become sharper and faster.
Manage Liquidity, Stay Flexible
Keep some cash reserves ready to deploy when new opportunities arise. Avoid locking up all your capital in positions you can't quickly exit.
Suppose you have $1,000 to invest. Instead of putting all of it into one project and waiting months, allocate $600 to a promising project and keep $400 in reserve. When a compelling new opportunity appears, you can act swiftly.
Liquidity equals flexibility. Being able to move fast when a rare opportunity arises is often more valuable than being perpetually “fully invested.”
Become a Crypto Learner
Treat crypto as a long-term career—continuously learning and growing. Don’t treat it merely as a lottery ticket. You're here to accumulate knowledge, skills, and capital over years, not just chase a one-time windfall. If crypto truly is the future of finance (and I believe it is), we’re only at the beginning of this journey.
An amateur might say: “I want to get rich quickly within a month.” A long-term thinker says: “I want to gradually deepen my understanding, get better at spotting trends, and in one or two years, I’ll be far more capable of profiting from market shifts”—whether through trading, investing, or even building projects.
Over time, good habits—focused research, active reflection, patience, and discipline—compound. Eventually, you'll develop the ability to profit effectively during major bull markets.
Stay patient and consistent. Across multiple market cycles, those who treat crypto as a career and continuously improve themselves will outperform those relying solely on luck and hype.
Synthesized Summary
The key takeaway: don’t just chase trending projects. Build a system. Learn to spot trends early, conduct deep research, prioritize fundamentals, and treat crypto as a skill to master over the long term. Keep dry powder for new opportunities, regularly review past decisions, and commit to lifelong learning. Over time, this mindset will help you uncover major winners, seize pivotal opportunities, and avoid becoming someone else’s “exit liquidity.”
terry
[Co-created with GPT-4]
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