Conversation with HTX Partner: Cryptocurrency Strategies and Investment Opportunities in a "Cold Bull Market"
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Conversation with HTX Partner: Cryptocurrency Strategies and Investment Opportunities in a "Cold Bull Market"
Discussing the short-term trends in the crypto market, the reasons behind the market's decline despite the launch of spot ETH ETFs, and investment opportunities in AI, RWA, and the Solana ecosystem.
Navigating Web3 tides with focused insights
Recently, Huobi HTX's featured column "Dialogue with HTX Companions" invited independent researcher NingNing, Huobi Research analyst Alchemist, and crypto KOL Fulushou OTC to discuss the theme "Correction or Bear Market? Where is the Crypto Market Headed?" The discussion covered short-term market trends, the reasons behind the market’s decline despite the approval of spot ETH ETFs, and investment opportunities within AI, RWA, and the Solana ecosystem.
Macro Perspective: A Cold Bull Market and Liquidity Challenges
NingNing: From a macro-cycle perspective, Bitcoin’s traditional four-year cycle has been disrupted this round, primarily because the Federal Reserve's rate-cutting cycle no longer aligns with Bitcoin's monetary cycle. Bitcoin was born during the subprime mortgage crisis, amid aggressive Fed rate cuts, and Satoshi may have designed its parameters to counter fiat inflation. However, this cycle is different—shaped by China-U.S. financial competition and AI-driven long-term U.S. equity bull markets. The Fed has maintained high interest rates to stay competitive, resulting in Bitcoin’s halving occurring without accompanying rate cuts. This has created a “cold bull market”—where Bitcoin rises alone while altcoins broadly collapse, and meme coins surge sharply due to insufficient off-exchange liquidity.
The current market consensus views the macro environment as a tug-of-war between Trump and the Fed: the former pushing for rate cuts to manage debt, the latter favoring higher spending, creating uncertainty that triggered the recent crypto correction. Still, the outlook isn’t bleak. The U.S. fundamentals remain strong with leadership in AI; only policy uncertainty persists. Chinese assets such as Hong Kong equities have reached a temporary peak, and a strong rebound driven by capital repatriation is expected next quarter.
Alchemist: This bull market hasn’t seen a clear “frenzied bull” phase. Key indicators show that even at its peak, it hasn’t matched the previous cycle’s levels. The core reason is that past bull markets were fueled by Fed rate cuts, low interest rates, and quantitative easing, whereas this cycle features ongoing Fed balance sheet contraction.
Moreover, unexploded “bombs” remain before April: the impact of Musk’s policies on government spending and workforce reductions has yet to materialize; tariffs taking effect from April 2 could push up prices and dampen consumption, though data hasn’t reflected this yet. Therefore, it’s too early to determine if we’ve hit a temporary bottom—the March data must first become clear. A potential future catalyst would be the Fed replenishing bank reserves, which could end balance sheet contraction and inject much-needed liquidity.
Fulushou OTC: The last bull market saw a Bitcoin double top, driven by the crypto market’s low total market cap, massive Fed stimulus, and Grayscale’s large-scale buying. While Bitcoin has performed well this time—surpassing prior highs—it’s mainly supported by spot ETF approvals and sustained 90% cash inflows into physical holdings. Ethereum’s current price is reasonable, largely because there’s no new narrative this cycle. Bitcoin’s market cap could reach $3 trillion, but without Fed monetary easing, altcoins won’t experience another “crazy season.” Future market direction hinges on when the Fed turns dovish.
Investment Outlook for BTC and ETH
Alchemist: I hold BTC long-term, with most stored in hardware wallets. I sold most of my ETH position at $3,700 and am selectively adding Solana on dips.
Fulushou OTC: I’m currently flat on Bitcoin, but firmly believe it will eventually reach $1 million. I’m not bullish on Ethereum in the short term unless there’s a major narrative shift or monetary easing. That said, compared to Solana and BNB, Ethereum’s core strengths—mature tech framework, decentralized governance, regulatory compliance, and robust ecosystem—make it ideal for long-term investment and asset allocation.
NingNing: Although Ethereum has undergone two upgrades, improvements have focused mainly on the consensus layer, suggesting a possible strategic retreat from the Memecoin赛道—evident in its far lower infrastructure investment in this area compared to Solana. This raises a critical question: what will drive block space consumption now that Memecoins are gone? Only sustained block space usage can increase on-chain revenue, burn more gas fees, and achieve deflation—a key concern for Ethereum holders. However, on-chain asset booms stem from supply-side innovation rather than rising user demand. Therefore, whether Ethereum launches new products by late 2025—such as native AI integration, a super-evolved DEX trading model, or RWA adoption—will be crucial for its next growth phase.
Investment Strategies in the Current Market
Fulushou OTC: As a cyclical trader, I believe staying flat is optimal right now. Entering the crypto space is both lucky and risky. I encourage everyone to keep learning, stay informed, and stay on the right path to capture future opportunities.
NingNing: As a firm believer, I think investors can choose blue-chip coins, altcoins, alpha plays, or meme coins based on a spatial strategy. Alternatively, they can follow a time-based approach—for example, if one believes the current cycle is weak but long-term prospects are strong, allocating 80% of funds to stablecoins and waiting for the anticipated super bull market by late 2025 might be wise. Markets are unpredictable, and being completely flat risks missing transformative opportunities.
Alchemist: Investment strategies should be tailored to individual circumstances. Everyone has different cost bases and positions. The key lies in managing your own investment approach and risk effectively.
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