ETH bullish shift: Why large-cap cryptocurrencies have become favorites in the bull market?
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ETH bullish shift: Why large-cap cryptocurrencies have become favorites in the bull market?
In a bull market, fundamentals are not your friend.
Navigating Web3 tides with focused insightsAuthor: Sam
Translation: TechFlow
Those chasing high returns on ETH through DeFi tokens will be disappointed in this bull market.
DeFi Summer taught us that value accumulation flowed from ETH to DeFi projects. This was a logical conclusion, given that DeFi was the most popular sector within the Ethereum ecosystem.
However, it's now clear that real high returns on ETH are actually coming from "legacy coins" (such as XRP, HBAR, XLM, ADA, TRX, ALGO, etc.). These are Tier-B mainstream cryptocurrencies with billion-dollar market caps but lack fundamental value drivers. Their main appeal lies in the Lindy Effect (i.e., value derived from longevity) and visibility on centralized exchanges (CEX), making them easy choices for non-crypto-native users.
What we’re observing is that high returns on ETH are now flowing into these large-cap "legacy coins," such as XRP, ADA, HBAR, XLM, and ALGO. These tokens have billion-dollar market caps yet almost no network activity to justify their valuations. Their attractiveness stems from longevity (the Lindy Effect) and accessibility via centralized exchanges for non-crypto-native users.
This demonstrates two points:
1) Fundamentals still don't matter. In a retail-driven bull market, revenue and usage metrics have negligible impact on token performance.
2) Unless you have an asymmetric edge in mid- or small-cap tokens, it’s wiser to hold leveraged ETH or large-cap mainstream coins than to bet on outperformance from mid-cap DeFi tokens.
Since DeFi Summer, the token market landscape has expanded significantly. With more token options available, selection risk has increased, making it harder—and statistically less rewarding—to pick winning DeFi tokens.
In a bull market, fundamentals aren’t your friend. Don’t overthink it: keep it simple and concentrate your capital on the obvious choices.
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@0xCryptoSam
