Lessons and Experiences from This Crypto Cycle (1)
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Lessons and Experiences from This Crypto Cycle (1)
Bitcoin has already been allocated anyway, so might as well consider looking into opportunities in US stocks.
Navigating Web3 tides with focused insightsHost: Alex, Research Partner at Mint Ventures
Guests: Jiang Xin, crypto investor; Rain Sleeping in the Rain, crypto KOL
Hello everyone, welcome to WEB3 Mint To Be, initiated by Mint Ventures. Here, through persistent questioning and deep thinking, we aim to clarify facts, understand realities, and seek consensus within the Web3 world. We help you uncover the logic behind trending topics, provide insights that go beyond surface-level events, and introduce diverse perspectives.
Alex: Today we have two guests joining us. The first is Mr. Jiang Xin. I remember the last time Professor Jiang was on our show was around September 2023—right before the altcoin bull run kicked off—when we discussed what could be called the main wave of a bull market. Our second guest is making their debut on our program, but someone many already know as a prominent KOL: Rain Sleeping in the Rain. Let’s start with brief self-introductions from both of you.
Rain Sleeping in the Rain: Hi everyone, I'm Rain Sleeping in the Rain. I’m a KOL on Twitter focusing mainly on narratives and fundamental analysis. Right now, my primary research focus is on how to use data effectively to improve trading performance.
Jiang Xin: Hello everyone. I’ve been primarily involved in VC investing and investment research. Recently, I've shifted more attention toward public markets—both cryptocurrency and U.S. equities—and also started exploring AI-related areas. So it's been a transition from private (early-stage) to public (secondary) markets.
Assessing the Current Market Phase
Alex: Today’s topic differs slightly from previous episodes. In earlier ones, we focused on specific sectors or narratives like stablecoins or RWA. This time, we’re diving into something more subjective, emotional, and personal—our own experiences. The theme is “This Cycle: My Lessons Learned,” aiming to share reflections, takeaways, and insights gained so far in this cycle that can benefit our listeners. Our first question: where are we in this current market cycle? What’s your view on the stage we're in, and why?
Jiang Xin: It's actually hard to define exactly which phase of a bull market we’re in—it depends on whether you're referring to Bitcoin or other assets. From a Bitcoin perspective, I think we’re still mid-bull market, though pinpointing the exact sub-phase is difficult. But for altcoins, I believe we’ve already entered a deep bear market. This shift likely began around January–February, marking the onset of a severe altcoin downturn—something most participants can feel. Personally, I remain optimistic about Bitcoin, but altcoins probably need more time to adjust—possibly over half a year. During this period, crypto investors may not feel particularly comfortable—that’s my general sense.
Rain Sleeping in the Rain: My view aligns closely with Professor Jiang’s. I think we’ve moved beyond the traditional four-year cycle theory. We shouldn't try to assign one unified cycle stage to the entire crypto market anymore. Right now, things are extremely chaotic: BTC stands out alone while altcoins remain lifeless, yet any stock linked to crypto concepts surges dramatically. It’s impossible to say what phase we're in overall. Instead, we should break it down: stocks are one market, BTC another, and altcoins yet another—each governed by different dynamics. For example, I’m bullish on BTC because demand keeps growing; it's hard not to expect upward price movement. For major altcoins, fundamentals matter—projects like AAVE or HyperLiquid, which conduct buybacks, make solid long-term holdings. You can accumulate them near bottom prices and hold. Their valuations correlate strongly with fundamentals. As for small-cap altcoins, success hinges largely on whale activity and poor liquidity. Whales often manipulate via futures contracts, so you must analyze contract data—large trader positions, long/short ratios, open interest (OI), volume—to anticipate price direction.
Alex: Let me briefly summarize both your views. In this cycle, it's no longer feasible to describe Bitcoin, altcoins, and crypto-linked U.S. stocks under one single market narrative. The divergence is clear: Bitcoin has its own fundamentals, altcoins theirs—and even among altcoins, there's a split between those with strong foundations and those lacking both narrative and substance. These segments exhibit distinct price behaviors and cycle stages. On top of that, new hybrid models like "crypto stocks" have emerged. Previously, only micro-cap strategies existed; now numerous projects span various lifecycle phases.
Changes in Investment Difficulty This Cycle
Alex: Let’s move to the second question. I wonder—how many cycles is this for each of you since entering crypto or starting crypto investing? Subjectively speaking, has investing become harder or easier this cycle? And why?
Rain Sleeping in the Rain: For me, it’s definitely gotten harder. Coming from the 2021 cycle, this one feels extremely challenging. Back then, simply catching onto a narrative early and understanding its trajectory could easily generate profits. Sometimes even second- or third-tier projects in a trend outperformed the leaders. Take GameFi or DeFi: Ethereum struggled with scalability, leading to hype around alternative Layer 1s like BSC or Avalanche. If you bought during PVE (player vs environment) phase, gains came effortlessly. Projects in GameFi or DeFi were straightforward—if you understood the product and token mechanics, earning was simple. There were multiple ways to profit: providing liquidity (LP), playing games, farming airdrops—all forms of PVE gameplay. At the time, I was just entering the industry, yet still made decent returns. Just holding blindly could yield 10x–50x gains—it was insane. Now, despite having more experience, profitability is worlds apart. First, market liquidity is weak, pushing many teams not to build sustainable value but instead aim for quick exchange listings and high FDVs, then abandon ship.
Alex: They don’t even play the long game anymore.
Rain Sleeping in the Rain: Exactly. That’s what well-funded projects now prefer—high launch valuations. Smaller projects, say with $10M–$50M FDV, might actually want to earn real returns—via Binance Wallet IDO or Alpha Hub contracts. That’s roughly how this cycle plays out. Of course, there's been an on-chain angle too—many found good opportunities on-chain recently. But I personally am not skilled at on-chain PvP (player vs player). Though I did profit during the AI agent wave, mostly because I correctly anticipated the narrative, positioned early in relevant tickers, and rode a month-long surge when it played out.
Jiang Xin: I think most people feel it's become harder. Macroeconomic conditions aren't supportive—there’s no monetary easing. The core issue is sustained high interest rates; previously, we lived off Fed stimulus money. Also, Bitcoin’s market cap is much larger now—driving further upside requires enormous capital inflows. That’s an objective structural challenge. On a micro level, coming from VC, I see a deeper imbalance between supply and demand. After 2022, VCs raised massive funds—North American firms secured billions in capital. But Web3 simply doesn’t have enough scalable project opportunities to absorb such funding, resulting in oversupply: countless projects raise big sums without clear purpose. This mirrors AI, except AI doesn’t issue tokens—but its pre-IPO valuations are clearly inflated. So it’s a structural problem across private and public markets. One detail worth noting: back in the last cycle, passive holders ("diamond hands") were rewarded. But few talked about market manipulation or chip accumulation. Why? Because liquidity was so abundant that anyone trying to accumulate low and sell high couldn’t maintain control—their position would get swept up instantly by unpredictable inflows. Last cycle, the common story was whales selling too early or teams dumping prematurely. This cycle? More often, it’s whales successfully rekting retail or market makers pumping and dumping. Crypto remains a financial long-tail market—a global arena with lower liquidity than U.S. equities. Financially speaking, it still follows bubble dynamics. But subjectively, internal innovation within crypto seems weaker this cycle. Yes, AI is hyped, but it also delivered tangible growth—ChatGPT reached hundreds of millions of users, Cursor now has tens of millions. Real utility offsets some speculation. Even Nvidia has bubbles, but GPUs remain in short supply. In contrast, crypto lacks such self-correcting mechanisms. Stablecoins grew, but they’re distant from native tokens. Last cycle, DeFi and NFTs helped deflate bubbles—even as they created new ones. Especially NFTs: when sold outside Web3 circles, non-crypto buyers acted as natural bubble absorbers—effectively consuming the asset. This cycle, no external buyers have entered—except for Bitcoin, which retains unique appeal.
Alex: Yes, regarding whether investing is easier or harder, the consensus leans heavily toward significantly harder. First, liquidity remains tight—no clear rate cuts or stimulus in sight. Second, as Jiang pointed out, intrinsic innovation and product appeal—both inside and outside the ecosystem—are much weaker compared to last cycle. Last time, DeFi pulled in massive capital; NFTs and gaming attracted entrepreneurs and players from outside. I recall NBA Top Shot on Flow—a digital collectible using NFTs—which brought in huge numbers of non-crypto traders, users, developers, and institutional capital, fueling the market. Nothing comparable exists this cycle. Hence, fundamentals and business metrics lag, keeping valuations suppressed.
Best Investment Moves This Cycle
Alex: Given how tough this cycle has been, what do you consider your best investment decision or strategy so far? Just pick one or two. What was the context behind that call?
Jiang Xin: Honestly, this cycle has been full of lessons rather than wins—I could list many mistakes. As for correct moves… well, considering how difficult the year has been, not losing money is already a win. Last year was rough—I was still applying old bull-market tactics, buying many alts and suffering losses. This year, I’ve de-risked significantly—especially from altcoins. Two positive actions stand out. First, during Bitcoin’s two sharp dips in February and April, I opportunistically accumulated—not all-in, no leverage—just cash purchases held to today. That was better than past behavior. Before, I barely held BTC; now about half my portfolio is in Bitcoin. It’s a meaningful shift, and entry points were reasonable—not buying tops. Capturing beta exposure feels important. Second, I exited altcoin positions timely ahead of the crash. Around January 30, when Deepseek launched amid a U.S. stock selloff, I cleared all alt positions—cutting losses regardless of drawdown. By February, when many alts dropped 80%–90%, I preserved most gains. Those two decisions worked out okay.
Alex: You mentioned a key point—shifting from minimal Bitcoin allocation to ~50%. What drove that change in mindset or strategy?
Jiang Xin: Most who trade alts, especially those entering post-2019, hold little Bitcoin. Early adopters (pre-2016) usually started with BTC and remained BTC-centric. Later entrants favored alts and ETH—they made their money there. My prior gains came mostly from ETH and alts, creating path dependency. But in 2024, nearly all negative returns came from alts—prompting reflection: is our strategy flawed? Moreover, new entrants aren’t buying alts—they’re chasing memecoins. Institutional flows favor Bitcoin, not alts, sometimes not even ETH. I once advised a family office—very traditional folks—who only understand Bitcoin. Try explaining ETH or Solana—concepts I consider solid—and they struggle to accept them. With Bitcoin, society has been thoroughly conditioned—even if skeptics exist, adoption is widespread. Newcomers only chase dogs and memes; no one buys alts except old degens or veteran alt players. Yet alt supply keeps rising—market structure deteriorates. From my VC network, talking to founders, many admit building projects isn’t profitable. After paying exchanges, airdrops, agencies, and market makers, projects end up worse off than doing nothing. Thus, alts lack growth incentives. Founders lack motivation; buyers lack willingness—ecosystem health declines. Ultimately, Bitcoin offers the most stable return—even if not highest multiplier. I compared BTC against other asset classes—including U.S. equities. Excluding outlier stocks like Nvidia, Palantir, or Rocket Lab, BTC outperforms most. So yes, it’s a quality asset. Lower expectations, and BTC becomes a compelling choice.
Rain Sleeping in the Rain: I’ll highlight the AI Agent narrative. Last year I published an article advocating going all-in on Agent-themed projects—and reaped significant rewards. Virtual, for instance, I bought around $0.35 and sold starting at $4, fully exiting above $3. Context: Goat emerged, signaling intense market interest in such tickers. Anticipating OpenAI’s upcoming Agent module release added momentum. Plus, expected Fed rate cuts boosted market confidence. So I positioned in related tickers. That was my strongest move. Ironically, I’d lost money earlier betting on OLAS due to similar conviction—but timing was wrong, environment unripe. This time, learning from past failure, I acted decisively at first sign of breakout.
Alex: Understood—your most successful move was early recognition of the AI Agent narrative surge, selecting Virtual as the primary bet?
Rain Sleeping in the Rain: Correct. Also earned six figures on Solana-based plays, but held too long—ended up losing it all due to overconfidence.
Worst Mistakes and Lessons Learned
Alex: Alright. As Jiang said, this cycle has been tough—perhaps offering more lessons than successes. Next question: looking back, what was your biggest investment mistake, and what lesson does it carry?
Jiang Xin: Main takeaway: stick to simple things. Don’t constantly chase alpha—obsession with 10x–100x returns leads to ruin. Macro environment is tight—we all know that—but refuse to accept we can only earn beta, e.g., just buying Bitcoin. Everyone watches top players like 0XSUN, seeing them mint wealth daily, feeling anxious about missing out. So we think: I can do that too. But that’s putting the cart before the horse. Being the locomotive is great—if you can—but most won’t achieve it. Chasing that dream burns energy, risks everything—like opening high-leverage contracts or allocating heavily to alts or memes. Many lose money simply by rushing. I myself made dumb calls: loading up on alts at peaks, blowing up leveraged positions. Fortunately, core holdings stayed safe—in BTC, USDT, cash, blue chips. So lesson: slow down. In mediocre macro environments, test small. Catching a 100x meme is great—but if you miss it, stay calm. Accept being average. Most people earn market returns—that’s sufficient. Remember: very few achieve 100x+; maybe 10–20 people globally. And the effort required is disproportionate—days of sleepless grinding for returns less than just HODLing BTC. I read Wang Yishan’s recent comment—he entered crypto in 2011–2012, built companies, invested widely—yet ended up with only 10% of his original BTC. Stick to simple, correct, long-term actions. Easier said than done—I remind myself daily. Everyone knows BTC will rise, knows U.S. stocks generally trend up—yet why can’t we hold? Maybe ask yourself daily: why can’t I be more long-term oriented? That’s the biggest lesson this cycle taught me.
Rain Sleeping in the Rain: Three main points. One: never predict the market—follow it. Two: the more confident you feel, the more cautious you should be. When ego swells, question whether recent wins distorted your judgment. Three: write regular trade reviews. Journaling trades is crucial—it records actions, good and bad. Revisiting them improves skill. My deepest lesson: I was overly optimistic about Trump’s impact and early-year asset performance—committing the very errors I warned against. Believed Trump would bring political clarity—turns out he amplified uncertainty. Agree with Jiang: embrace gradual wealth-building. Get-rich-quick scenarios are rare. Focus on simple, correct actions.
Alex: OK, you mentioned a point I’d like to explore. You said heightened ego signals danger. What signs indicate ego inflation for you personally?
Rain Sleeping in the Rain: Simple: when others speak, you stop listening. You assume everyone else is stupid—only your prediction matters. Which brings us back to point one: don’t predict, follow the market. Whether tracking BTC or smaller moves, relying on outdated cyclical theories will cost you—like expecting altseason after BTC rallies. Stay vigilant.
Alex: You mentioned writing trade recaps—do you follow a routine, like daily or weekly?
Rain Sleeping in the Rain: Per trade. Note the core reason for profit or loss—don’t explain why you bought, just identify the critical factor. Review periodically. You can categorize: BTC trades, small-cap alts, large-cap alts, equities. Notion works great for organizing this.
Alex: Let me share my own reflections on these two questions. Biggest mistake: my largest loss came from a project I once wrote about—Covalent, a data indexing service similar to The Graph (GRT). Primary reason: overweighting an altcoin. Not a huge portion of total portfolio, but largest among alts. Position size stemmed from belief in solid fundamentals and its place in the hot Solana ecosystem—core infrastructure. But fundamentals weren’t strong enough to justify such allocation. Why overcommit? Because, as Jiang noted, I wrongly assumed altseason would come. Based on 2021 patterns: decent fundamentals + low attention = potential 10x–50x surge upon discovery. Reality: no altseason arrived. Attention and capital inflows didn’t improve meaningfully. Project had okay fundamentals—but nowhere near AAVE or HyperLiquid tier—so valuation stagnated. This was my biggest error. Conversely, sticking to fundamental-based investing was a strength. Applying this principle, I noticed Ethereum’s operational data—especially post-Cancun—showing clear deterioration: gas fees, active addresses, etc. So early last year, I rotated ETH holdings into BTC. Same logic kept me from buying weak-alt fundamentals. Thus, avoided ETH/BTC ratio collapse and major alt losses. This approach—fundamentals-first—is repeatable in next cycle.
Will Altseason Return?
Alex: Let’s circle back to altcoins—they matter deeply to most retail investors hoping for outsized returns. Do you think altseason will return? Alts have severely underperformed BTC so far. Could there come a moment when alts rebound sharply against BTC? Is that still possible—and why?
Rain Sleeping in the Rain: I expect localized altseasons—not broad-based rallies. Market attention is fragmented. In today’s era of easy token issuance, alt count grows endlessly—making selection harder. Long-term, only narrative-driven or fundamentally sound assets like AAVE or HyperLiquid offer viable holds. Currently, lack of liquidity and market confidence jointly delay altseason. External catalysts could revive hope—say, another ChatGPT-level breakthrough or renewed Fed easing (currently projected twice this year). Such developments restore confidence, increase risk appetite, and enable sector-specific speculation. Presently, market sentiment is bleak—no one wants to bet. Take AI Agent: much of its momentum stemmed from November rate cut expectations, lifting future outlook and boosting appetite for speculative assets. Today, we lack such confidence-boosting triggers—whether liquidity hopes or tech upgrades. Still, localized alt rallies may emerge. Core issue: lack of confidence.
Jiang Xin: I agree on partial altseasons. But full-blown altseason? Unlikely. View altcoin market like China’s A-share market. First, fundamentals are weak—most listed companies (and crypto projects) exist primarily for insiders to exit. Second, liquidity is highly diluted. In A-shares, over 400 million散户 (retail investors) and counting—yet market barely rises. Institutions cluster around select names. Similarly, alts are hard to pump—too many options. Experience in A-shares gives deeper insight: capital clusters around themes—last year AI agents, this year nothing visible yet. Earlier, RWA or PayFi saw minor runs—but not altseason. Future movements may resemble institutional theme-chasing. Also, insider trading and manipulation persist. In A-shares, it’s “hot money” chasing breakouts; in crypto, whales pump/dump via futures. Same playbook—often same actors. Full altseason? Probably gone forever. I wasn’t always this pessimistic—once thought liquidity cleanup might help. But that window may have closed. Industry scale—number of builders, projects, total capital—is vastly larger now. For a founder, launching a new project with $500M FDV is far easier than growing an existing one from $50M to $500M. New supply will keep rising, draining liquidity from older projects. Alt market won’t see universal bull run again—now mirrors A-shares.
Alex: Internally, our fund shares this altcoin assessment: whenever a rally appears, don’t bet on new highs or broad recovery. This cycle lacks intrinsic value creation—an accepted truth now. Thus, this crypto market feels notably more mature than past cycles. Still, I stay closely engaged—hoping someday to witness that spark we felt in 2021 with DeFi, NFTs, or early GameFi—when novel fusion with traditional models sparked excitement. It might happen again—timing unknown. Only by staying close to the frontlines can we position ourselves early when opportunity arises.
Cross-Market Investing: Pros, Cons & Lessons
Alex: Final topic: Jiang mentioned expanding beyond crypto into U.S. equities and other opportunities. Common sentiment: last cycle offered many paths—farming, gaming, trading, PvP. Now, opportunities shrink. Many explore adjacent fields—AI startups, stock trading. How are you both navigating this? Any plans to expand horizons? Share your thoughts.
Jiang Xin: U.S. equities represent a relatively predictable opportunity—similar to Bitcoin. Going forward, crypto and stock investors may converge. Tokens with liquidity and fundamentals will list on U.S. exchanges—not necessarily via ETFs, but SPACs or reverse mergers. Projects like HyperLiquid, Tron, or even ETH could enter broader capital pools. Today, equity investors access BTC/ETH directly via ETFs; Solana and other majors may follow. Without ETFs or listings, altcoins resemble pink sheets or OTC markets—low-liquidity arenas akin to meme gambling. Divergence is stark. Rational strategy: allocate to equities and major cryptos to capture steady growth under Fed easing, while deploying small capital on-chain for high-risk/high-reward plays. Portfolio balance needs adjustment. Entering equities means learning new drivers of volatility and sentiment. Structural shifts are underway.
Alex: What’s your current capital split between U.S. equities and crypto?
Jiang Xin: Ideally 50/50. Crypto capital faces extreme volatility—I prioritize certainty now. Equities offer diverse asset choices: gold, oil, commodities. In shifting macro environments, tools like options or Treasuries provide richer hedging. I’m diversifying across asset types. Crypto’s edge lies in high multipliers for small accounts—ideal for newcomers with time and modest capital, perfect for meme hunting or farming. Less suitable for seasoned players like us—partly why I’m shifting toward equities.
Alex: Our team recently evaluated U.S. equity opportunities—this cycle simply lacks strong crypto sectors. There’s an old saying: “Fish where the fish are.” Crypto’s pond feels dry now. Bitcoin allocations are set—time to explore U.S. equities. But we face a dilemma. For years, we focused on crypto believing: first, we believe in Web3’s long-term growth; second, versus traditional finance outsiders, we possess deeper industry knowledge and faster execution—giving us edge. Now, moving into equities—Jiang, based on your experience, does crypto expertise transfer? What advantages or pitfalls should we watch for?
Jiang Xin: Initially, disadvantages dominate. Unfamiliar market—your experience may even hurt. Take Circle: few in crypto buy it—seen as expensive or boring (stablecoins are old news). But outsiders hear “stablecoin” for the first time—find it fascinating, FOMO in. People assign high multiples to what they don’t understand. Familiarity breeds contempt; mystery breeds awe. Rockets? Just chemical fuel and thrusters. So crypto background initially hampers stock investing. However, advantages emerge. First, convergence between crypto and equities is accelerating. Your deep understanding of Circle, Coinbase, etc., gives lasting edge. But you must learn new rules: what excites retail investors, how narratives form, how “shell stocks” trade. Market psychology differs—crypto whales think differently than Wall Street operators. You may need to discard old assumptions. Still, investing principles overlap. Crypto is more sentiment-driven—less fundamental-heavy. This helps filter noise. Sometimes fundamentals *are* noise. Everyone knows Nvidia, Microsoft, Apple are strong—yet prices swing wildly. Why? Sentiment. Crypto veterans may excel here—buying aggressively when others panic. That’s how I approached buying Nvidia and Tesla in early April—driven by sentiment analysis. So crypto habits may help after all.
Alex: Right—Circle or other “crypto stocks” seem like overpriced wrapped assets to us—“Who buys this?” But to stock traders, they’re fresh and exciting—worth trading.
Rain Sleeping in the Rain: I deeply relate to both of you. Crossing domains carries huge risks. I once invested in escape rooms—lost everything, never recovered principal. When entering new fields, it’s hard to judge if a decision was sound. In equities, everyone knows to buy Tesla, Nvidia—buy the dip. But as Jiang said, it’s mostly event- and sentiment-driven games. If circumstances allow, I’d prefer cash-flow-generating businesses—more real economy focus. For equities, I’d likely stick to SPX (S&P 500)—simple, correct moves. But currently, no solid real-economy cash flow ventures exist—even after research. Cash flow brings peace of mind. So I’m directing energy and capital toward on-chain yield opportunities. USD1 offers many yield avenues—LPs, Pendle (PT yields), etc. To me, these are safer bets—around 30%–40% of portfolio. Also backpack, Lighter scoring farms. I prefer staying in familiar territory. Jumping blindly into physical businesses? Feels like guaranteed blow-up.
Alex: Indeed, personally I believe investors shouldn’t stray too far from their circle of competence. Going too far makes consistent profits difficult long-term. But if your domain shrinks over time, refusing to adapt is equally problematic. So there’s tension—we must gradually evolve. OK, we’ve talked for about an hour. Thank you both for sharing profound insights, experiences, and lessons. That concludes today’s episode of WEB3 Mint To Be. Thanks to all listeners!
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