Lessons and experiences from this cycle (II)
TechFlow Selected TechFlow Selected
Lessons and experiences from this cycle (II)
As the market gradually matures, many less mature projects—those that could only be hyped up through funding alone—will be phased out over time.
Navigating Web3 tides with focused insightsHost: Alex, Research Partner at Mint Ventures
Guests: Colin, Independent Trader & On-chain Data Researcher; Chain Nomad, Professional On-chain Investor
Click to listen to the audio episode
Hello everyone, welcome to WEB3 Mint To Be, initiated by Mint Ventures. Here, through persistent questioning and deep thinking, we clarify facts, uncover realities, and seek consensus in the WEB3 world. We aim to demystify the logic behind hot topics, provide insights beyond surface events, and introduce diverse perspectives.
Alex: Today we have two guests, both old friends of ours. The first is Colin, a well-known on-chain analyst who also participates in both U.S. equities and crypto markets. The second is Chain Nomad, also my friend. He previously joined our episode on Memes and shared many insightful thoughts. Please go ahead and introduce yourselves again.
Colin: Hi everyone, I'm Colin. My Twitter account is Mr. Bag. Glad to be invited back by Alex to share some opinions—thank you.
Chain Nomad: Hello, I'm Chain Nomad. I entered the space in 2023 and have focused on primary market investments since then. During bull markets, I generally converted early-stage gains into Bitcoin in the first half, then into stablecoins (U) in the second half. This cycle, I’ve closely followed and participated in most major primary market trends. Along the way, I've accumulated some experience and lessons. Looking forward to sharing them today.
Judgment of Current Phase and Response Strategy
Alex: Let's dive into today’s discussion. The first question relates directly to everyone’s current investment actions: How do you assess the current stage of this cycle? Where do you think the current crypto bull market stands—whether for Bitcoin or other assets? Based on that assessment, what are your current strategies and positions?
Colin: Great. Personally, when defining Bitcoin's cycle phase, I rely heavily on on-chain analysis indicators—my area of expertise—to determine if we're in the early, middle, or late stage. I first appeared on this show in mid-February this year and shared my views then. Today offers a good opportunity for review.
From late last year to early this year, I felt BTC was nearing the end of its cycle. That’s because signals historically seen at every top had already emerged. I know this view may not be widely accepted—normally, under a four-year cycle, the peak would be expected around September to December this year. But I wrote an article explaining this: If we look back to 2021—four years ago—there were actually two tops, with nearly all topping signals occurring in April, not November’s second peak.
This cycle has repeated that pattern. I won’t claim definitively there won’t be a second top soon, but the current situation closely mirrors that earlier one. In early 2024, nearly all on-chain topping signals I monitor were triggered. After peaking near $110K, BTC dropped to $74K in March–April before rallying to new highs. In 2021, during the second top, some unusual signals also appeared—most had already fired during the first top. These included capital inflow divergence, vertical price surges with little pullback, AVIV overheating, massive concentrated realized profits, and RUP divergence. All these signals are now reappearing.
Of course, every cycle differs. A key difference this time is structural changes among participants—many institutions have entered. Companies are copying MicroStrategy’s Bitcoin reserve strategy, and even strategic Ethereum reserves are emerging. From my on-chain analytical perspective, I still lean toward believing we’re in the cycle’s final phase, echoing the second top pattern from 2021.
With that said, let me address the second part: current position and strategy. As mentioned before, I’ve held a cautious view for 2025 overall. Whether due to internal ecosystem conditions or macro factors—like Trump imposing tariffs or pushing to remove Powell—market conditions will likely make trading much harder than in 2024. My portfolio is split into two parts. First, crypto: At the beginning of the year, when BTC hit $103K, I fully exited and hedged with 1x short positions to earn funding fees annually (~7%–10%). Now that prices have reached new highs, surpassing my exit point, and some bottoming signals are starting to appear (though not fully formed), I’m adopting a low-leverage shorting plan, aiming for 1.15x–1.25x leverage. The second part is U.S. equities—I took a more passive approach here and went all-in back in April. As I mentioned in May’s episode, I currently have no plans to adjust this portion. That summarizes my current stance.
Alex: Got it. Colin just reviewed his prior logic and updated us on his current status—essentially maintaining his previous judgment. Let me add a note: I invited these two guests specifically because their trading styles and focus areas differ greatly. Next up is Chain Nomad, who excels at identifying primary market and on-chain opportunities. Over to you.
Chain Nomad: Sure. As introduced, my trading style leans toward sentiment and market dynamics. I’ll focus on primary market insights since Colin just covered secondary professionally, where I don’t have much to contribute. From a primary market standpoint, I can make a broad call: It’s definitely not a primary bull market right now.
Since entering in 2023—about two years ago—I’ve witnessed clear influxes of external traffic during periods like the BTC inscription mania or this year’s Meme coin frenzy. You could clearly feel outside capital flowing in—not just internal speculation. That sensation is absent now. The market feels quiet, far from a primary bull market vibe. From the secondary side too, not just me, but many primary players and altcoin traders share the same feeling: This cycle has seen a clear decoupling between BTC and alts—or primary markets.
BTC has surged alone, while alts and primary markets often fail to follow BTC’s momentum. That’s how I judge whether we’re in a primary bull market. Regarding positioning, about 90% of my portfolio is now in USDT, with only 10% in long-held BTC that I won’t sell. I don’t plan to buy back in here. Based on inputs from top-tier traders and past OGs in crypto, the general trend is shifting from aggressive bets to defensive postures. That’s exactly where I stand now.
Alex: As a very active primary market player, how would you describe your current work rhythm or daily time allocation?
Chain Nomad: It depends on the market. I pay close attention to on-chain liquidity. Recently, over the past week or two, liquidity has warmed slightly, so I’ve increased my working hours accordingly. During colder periods earlier, I spent only one or two hours a day scanning for any significant opportunities. I did notice and participate in the recent Pump event. But I skipped other highly PVP-focused on-chain plays because I believe primary investing should prioritize ROI—value for effort. Sometimes, when market trends or timing are off, putting in more effort leads to losses.
Alex: Is this also the current state of mind among top players or高手 in the space?
Chain Nomad: Yes, isn’t there a classic quote from 0xsun: “Star players don’t play garbage time”? Something along those lines.
Changes in Investment Difficulty This Cycle
Alex: Understood. Let’s move to the second topic. Colin, as someone who’s lived through multiple crypto cycles, how does this cycle compare in difficulty to past ones? Has it become harder or easier? Why?
Colin: Overall, if we evaluate the entire market holistically, the difficulty hasn’t changed dramatically. Making money in financial markets is inherently difficult, especially when chasing alpha. As we discussed earlier, BTC’s standout feature this cycle is its solo run—its dominance. It’s almost as if only BTC is rising, even outperforming ETH. Another oddity is Trump’s election triggering a tariff war in 2025. Both developments significantly impact market participants. As markets mature, less mature projects—those driven purely by speculative capital—are gradually eliminated.
So BTC’s solo rise doesn’t surprise me. As for the tariff war, many care, but if you’re a long-term BTC investor, it’s just noise. For example, if you’ve been holding BTC since 2021 or 2022 without selling, you’d feel especially satisfied this cycle. In past cycles, you might have held BTC while watching others’ alts multiply 10x or 100x, causing psychological stress. But if you held through this cycle without selling, you’d feel content—your difficulty was lower because BTC kept rising while other coins underperformed or drifted down.
If I must say, difficulty increases with institutional entry. Our opponents are no longer just old OGs or whales, but hedge funds and quant firms with decades of traditional finance experience. Their arrival accelerates market maturity, which attracts even more institutions—a self-reinforcing loop. The result? Much lower BTC volatility and higher difficulty in capturing alpha. But as I noted, if you’re only seeking BTC beta—simple buy-and-hold—the current environment doesn’t significantly increase difficulty for you.
Alex: Understood. This episode is the second in our theme series: "This Cycle, My Experiences and Lessons." Last time, two guests said this cycle feels notably harder. Colin says it’s manageable. This contrast reveals a subtle assumption in Colin’s view: If you’re a BTC holder, this cycle may feel easier—even simpler—because most capital attention and fundamental improvements have centered on BTC. But for investors chasing higher alpha, especially in the first half, many pinned hopes on alts, which underperformed. Chain Nomad, what’s your take? Compared to when you first entered crypto, how has the difficulty level changed this cycle?
Chain Nomad: I think this is an excellent question, especially for primary market players. When doing primary, you hear conflicting voices: some say it’s harder now, others compare it to the past. This brings up a crucial concept—bias. For primary investors, bias is deadly. If you operate with bias, you distance yourself from profit opportunities. In primary markets, you always see people on Twitter deifying certain figures regardless of market conditions.
Even during choppy phases—like when BTC wasn’t trending recently—Twitter still saw hero-worship. Take Ao Ying, a strong secondary trader who performed well during sideways markets. I’ve studied his trading logic and system. Not to mention Meme plays earlier or inscription opportunities. At every stage, primary markets offer rare chances to generate massive alpha, and someone always captures them. Recently in a small group chat, I used this analogy: Primary markets are like a golden chariot ascending to heaven, loaded with gold bricks. We players are bystanders, picking up fallen gold pieces along the way. Initially, the gold is hidden under cloth on the chariot.
As it ascends, the cloth slips, valuations rise, and gold pieces fall. We pick them up. Such chariots pass by regularly—we just need to stay close, near market opportunities. So I believe whether it’s bull or bear, at any stage, primary markets always offer great opportunities. Since entering in 2023, I’ve seen bull-bear shifts, but I consistently believe new opportunities keep emerging. My current view remains: primary markets can turn $100K into $100M.
Alex: Earlier, you compared primary opportunities to a chariot initially covered by cloth. Most people can’t tell at first whether it carries gold or worthless junk. You mentioned inscriptions, memes, and other opportunities. From your experience, has the difficulty of approaching these chariots and grabbing gold pieces changed?
Chain Nomad: This change ties closely to narrative. For example, if Heaven needs goods from the mortal realm, more heavenly chariots appear. Like during the BTC ecosystem or Meme boom. When narratives emerge, wealth creation and opportunities multiply. Ten passing chariots mean more gold to collect than just one. This returns to our earlier point about timing and trends—important in primary markets. When trends arrive, invest more energy, focus intensely, and earn aggressively. When they fade, adopt a steadier, more cautious posture. Even if you collect fewer gold pieces, at least ensure you don’t lose what you’ve already gathered.
Alex: Let me briefly summarize your answer. First, your mindset is optimistic and open—you believe primary opportunities always exist, so maintain continuous market awareness. Second, even as opportunity forms and narratives evolve, you believe the ability to identify, approach, and profit from them persists. Despite varied formats, ordinary people still have chances. So you don’t believe it’s objectively harder now.
Chain Nomad: Exactly. Primary market players shouldn’t give themselves such mental cues. Distinguish between going all-in versus playing defense—but either way, maintain openness to opportunities and reject bias. Bias is taboo in primary markets. Once you view markets with bias, profit opportunities will surely flee.
Best Move This Cycle
Alex: OK, let’s discuss the third topic. This cycle—from 2023 to now—isn’t fully over yet. What was your single best investment decision or strategy so far? Can you share your thought process and context?
Chain Nomad: I’d summarize my best moves into two main directions. First, as mentioned earlier, what I call the “blue-chip strategy.” When narratives emerge—like BTC ecosystem or Meme ecosystem—we should actively participate in leading projects, those with strong consensus, and allocate significant positions. For example, blue-chips in inscriptions like ORDI or SATS, or leaders in new protocols—they offer higher multiples, better liquidity, and higher market cap ceilings. When trading Memes, platform coin leaders or AI narrative leaders had the highest multiples, market caps, and liquidity. So my most valuable—and correct—action this cycle was focusing on blue-chip opportunities and avoiding second- or third-tier projects. Isn’t there a classic saying: “Iron-clad number one, ever-changing number two”? Number two spots shift constantly, but the most consensus-driven, widely recognized leader holds greater potential. You can pursue other new launches, but once a narrative starts trending upward, I reinvest profits into leading assets. Only after reaching a satisfying personal threshold do I cash out entirely.
The second lesson came from a mentor in primary investing—I find it extremely valuable: dynamic rebalancing. This is critical for primary players. Think of bull markets in two halves. During the first half, regardless of chain (BTC, ETH, SOL), I periodically manage primary market profits. For instance, rebalancing weekly or biweekly, reallocating my portfolio. Example: I set initial allocations as 50% BTC, 30% primary, 20% liquid USDT. Regular rebalancing maintains healthier portfolio structure and reduces drawdown. In the second half, I gradually reduce BTC exposure, increasing USDT allocation and shrinking primary positions. This converts primary gains into BTC and USDT, protecting against severe drawdowns from market volatility. In primary trading, dynamic rebalancing is essential. Often, you think price is flying, unrealized gains are piling, profits are secured—but these are three different things. Rebalancing keeps your primary portfolio healthy and supports rational decisions.
Alex: Understood—basically setting a discipline to manage human weaknesses. Now over to Colin.
Colin: I started gradually accumulating BTC in late 2023, around September to December. I followed my spot cycle system based on on-chain signals. Though not perfectly timed at the absolute bottom—market sentiment made me hesitant—I still executed according to signals and my trading plan, entering slightly later. I held this position from late last year until fully exiting in early 2024. This trade delivered the highest return over the past one to two years, given BTC’s standout performance this cycle.
To be honest, I missed the rally from $103K to current levels after exiting. But upon careful review, my actual gain during that period was limited to funding fees. Even if I hadn’t exited, I might not have achieved better results. As the other guest noted, spending more effort trading at the wrong time doesn’t guarantee profits—it may cause losses. I fully agree. My system signaled last year that 2025 would be extremely difficult to navigate.
So choosing to exit and switch to earning funding fees helped me mentally adapt. Had I held positions—or remained fully invested in BTC spot as before—I might have made worse decisions amid tougher external conditions. Thus, despite missing the top surge, I’d still make the same choice today. Otherwise, both mindset and execution could have warped.
Another solid move was in early April. Markets panicked severely due to tariffs—not just Bitcoin, but U.S. equities too. I observed something interesting worth sharing. Normally, U.S. major indices fluctuate smoothly—maybe 1%–2% intraday swings. But during the first and second weeks of April, opening volatility looked broken: indices might surge 3%, then plunge 5%. Just from index movements, extreme panic was evident.
So I re-entered my previously exited U.S. equity positions. There was another interesting observation: Taiwan has a National Security Fund that announces market interventions under specific conditions. Reviewing history, its intervention points almost always coincided with relatively good entry levels for Taiwan stocks—historically high win rates. Interestingly, these points also aligned well with good U.S. equity entries. I don’t know why—maybe they’re just really skilled. Besides abnormal index swings, seeing this news prompted me to fully re-enter U.S. equities on April 9. It turned out to be a solid low point, with prices rising steadily since.
I consider this my best move this year—though unrelated to crypto, it’s worth sharing. In the future, if similar situations arise—like extreme stock index volatility—observe whether markets have entered excessive panic. Such extremes shouldn’t happen; when they do, pay attention.
Alex: Understood. I sense that the extreme stock volatility and NSC Fund entry Colin described reflect emotional chaos and severe price deviation. This applies not only to stocks but also to past bear markets—like May 2020 during Luna’s collapse, or November 2022 during FTX’s implosion—when ETH might drop 20% in a day, emotion peaks. Buying in at relatively low historical levels usually yields decent long-term results.
Worst Mistake and Lessons Learned
Alex: Let’s move to the next question. So far in this cycle, what was your biggest investment mistake? How have you reflected on it?
Colin: I touched on this slightly in the last episode. My most painful lesson was over-trusting Ethereum’s #2 status. While ETH remains #2, during the early-to-mid bull phase, I began building BTC positions. At that time, I tried using ETH to capture some alpha. My logic: ETH correlates highly with BTC, but has higher volatility. Since the bull market had just begun, ETH should offer more upside than BTC. So I swapped part of my BTC spot for ETH—effectively going long on the ETH/BTC exchange rate. In hindsight, this was a major failure. I didn’t lose money outright, but I missed substantial potential returns—opportunity cost. Later, if I recall correctly, ETH/BTC traded around 0.05 in first-half 2024, then declined after August 5th’s crash. I lost potential gains then. I believed ETH’s #2 status was unshakable—its market cap dwarfed #3 and #4. BTC had just passed its ETF, and ETH was hyped for the same expectation—even eventually getting approval. I got overly FOMO-ed, hoping ETH could replicate BTC’s beautiful ETF-driven rally.
But reality didn’t cooperate. Post-ETF, it became an exit channel for seasoned players. This lesson should be etched in everyone’s mind: In today’s crypto market, besides Bitcoin, never place strong faith in any other asset. Faith is a double-edged sword. Holding a token with faith might yield 100x, 1000x, even 10,000x gains. But high payoff ratios inevitably come with low win rates—a trade-off. If you encounter an opportunity with both high reward ratio and high win rate, it must suffer from extremely low frequency. All three traits can’t coexist. Another risk of faith: it may cause excessively large MDD (Max Drawdown). Large drawdowns are taboo in trading. Even if prices recover later, what if they don’t? With low win rates, a failed bet—say, losing 80% of capital—requires a 5x gain just to break even. That’s my personal lesson.
At this market stage, besides Bitcoin, no other asset deserves such strong faith to buy-and-hold indefinitely—not even Ethereum. I fully exited my ETH holdings around $4,000 in December last year—after Trump’s election—based on data and signals. Honestly, I was reluctant then—it hadn’t reached prior highs. I wondered if Trump’s win might push ETH to new highs, but it didn’t. Still, signals and data supported selling, so despite reluctance, I executed. Looking back, that decision was correct and helped recover earlier opportunity costs.
Chain Nomad: These lessons are truly paid for with money—each point reflects costly experiences. First: Never gamble on price direction in primary markets. The core of primary investing is finding asymmetric opportunities—high probability, high payoff. If during opportunity evaluation you gamble on whether it’ll rise or fall, or guess what the “whales” will do, the more gambling involved, the lower your chance of success. Reflecting on my own losing trades, they often stemmed from excessive gambling rather than sound logic. Guessing future moves is unreliable.
Second: A fatal trap for newcomers—lacking strict stop-loss rules, or not setting stops at all. This matters not just at entry, but also at exits and profit-taking. For example, during the Trump coin event, I used multiple accounts—some sold progressively, others used tighter setups. One tightly managed account rose ~20x from entry to peak—very profitable. But due to weak conviction or poor execution on strict stop-loss principles, profits suffered massive drawdown—extremely painful. So beginners in primary investing must prioritize stop-loss discipline—not just cost-based stops, but also profit protection.
Third: Inadequate research—another deadly flaw. Sometimes you think you’ve done research, but later realize it was shallow and incomplete. Before buying an asset: Did you clearly define your rationale? Decide position size? Determine holding period? Establish expected return? Have you systematically scanned information sources—key traders, monitored KOL groups, public Twitter data? Before selling: Did you conduct thorough due diligence and repeat the same steps? This is crucial. Sometimes we deceive ourselves into thinking we’ve researched when we haven’t. Poor research affects both entry and exit decisions.
Those are my top three. Minor points include: strictly controlling position sizes when averaging down—never keep adding as prices fall, which is deadly; avoid trading while distracted—like shopping or gaming—such trades are inefficient and prone to losses. Those sum up my painful experiences.
Alex: Good, very detailed and helpful. Our next planned question was: What’s the most important insight or lesson you’ve gained this cycle? Any takeaway you can apply to the next one? But both of you have already shared many insights. Beyond what’s been said, if you had to summarize your most important takeaway in one or two sentences, what would it be?
Colin: One additional point worth sharing occurred in March last year. BTC surged to $73K–$74K—the first major uptrend. But comparing crypto sentiment to U.S. equities revealed something odd: U.S. markets were already range-bound, lacking enthusiasm, unlike steady bull moves. Yet BTC sentiment was extremely heated. Another unusual detail—few may remember—that around that time, market expectations for rate cuts were severely dampened. U.S. markets reacted accordingly, but Bitcoin showed no reaction at all. That felt strange. So in April, I exited a significant portion of my altcoin holdings. Later developments are known: BTC ranged from March to October, while alts entered a poor bearish trend during the same period.
Two points from this observation: First, we don’t need to focus solely on internal crypto news or sentiment. Comparing crypto sentiment to other markets—equities, commodities, bonds—offers valuable perspective. Second, assuming we believe the bull market isn’t over but want protective measures, beyond partial profit-taking, we should: First, hold onto BTC; second, eliminate relatively weak assets. For example, if you hold five alts, remove the weaker ones first. Prioritize high-risk, underperforming assets for elimination. This helps reduce overall risk. These two angles offer useful observational frameworks.
Chain Nomad: I prepared one point I find extremely important. If I had to pick one: solidify your own trading system. I believe this is the critical—if not sole—factor distinguishing A8 or even A9-level primary traders. I feel this deeply, observing myself and elite traders like 0xsun, Dayu, Lengjing, Ao Ying—they all possess strong, well-defined trading systems. You can clearly sense their logic. When we spot an opportunity, we typically identify it emotionally or logically, then react based on established trading habits, validating prior logic and systems, locking in profits—that’s the process. But such systems are highly experience-dependent. For example, in 2023 when I entered, were 0xsun, Lengjing, Leishe Cat, James Monkey Brother, Wang Xiaoer always this skilled? No. Early 2023, Lengjing played shitcoins PVP-style—amateurish. Why did they capture big opportunities during Trump coin or later Meme waves? Because they’d already built robust systems. When liquidity surged—“the floodgates opened”—they capitalized better, amplifying wins. That’s the key difference between A8/A9 traders and PVP players. If we lack such experience, can we compensate? I think yes. Take the Pump coin: post-launch reaction time is extremely short. Without a solid trading system, quick response is hard. Solution: thoroughly predefine various scenarios. Run through all possibilities, prepare contingency plans—this makes launch participation more prepared and targeted, partially offsetting system gaps. Improvement is simple too: deeply review every trade. Recently I realized writing daily reports is vital for primary traders. I’ve noticed top players—including host Alex—maintain this habit. It sharpens your summary and review of events and trades. Validated correct logic stays with you; learned mistakes become permanent lessons. I believe both practices are crucial.
I’d also like to share a passage deeply relevant to this topic—one I read in an article. Four sentences, very classic: Risk—whether from era shifts, policy, or event shocks—is unavoidable for everyone. Personal risk—such as overbuying, selling too early, hesitation—often stems from lack of systematic training, worsening losses. Whether you profit depends on whether you’ve trained reflexive response mechanisms. The retail trader’s greatest enemy isn’t the market, but their own emotions and undisciplined habits. These words offer a fitting conclusion to this topic.
Alex: Well said. First, continuously refine and solidify your personal trading system. When the system is incomplete, at minimum, develop thorough pre-trade plans as supplements.
Outlook on Altseason
Alex: Let’s now discuss a topic everyone cares about but also finds painful: altcoins. This cycle, even with recent rebounds, alts still massively underperform BTC and ETH. In your future cycle trading plans, do you include assessments or preparations for an altseason? Do you still expect one? Do you believe sizable alt rallies with strong wealth effects will emerge? Note: altseason includes not just secondary assets or smaller alts beyond ETH, but also opportunities Chain Nomad focuses on—on-chain plays.
Chain Nomad: I’ll focus on on-chain aspects since I’m less familiar with secondary altcoins. Primary markets have clear seasonality. Think of it as “harvesting”—it requires such a cycle. After a period of consolidation, “lambs” grow taller or stronger, liquidity accumulates. When narratives emerge—inscriptions or Memes—lambs rush in, liquidity improves, and on-chain primary bull runs emerge, attracting external flows and lifting the market. But after the recent Meme harvest, lambs are largely gone—requiring rest and recovery before “distant waters” in primary markets flow again. So my current stance is cautiously participating. But I’ve noticed a shift: lately, primary markets increasingly revolve around “whales.” Attention now centers on whether whales are manipulating. For example, recent PUMP and BONK platform PKs—BONK clearly has whales driving pumps to attract in-market activity. So if you want to participate in primary now, follow the whales—avoid high-retail pools. The lower the retail concentration, the greater the potential—I see this as a clear shift.
I also have a question for Alex and Colin: Recently, renewed optimism about Ethereum has emerged. Many speculate ETH could follow BTC’s path—doubling after hitting new highs, possibly reaching ~$10K. Would love to hear your views.
Alex: Good standalone topic—we’ll discuss shortly. Back to Chain Nomad’s point: currently waiting patiently for primary on-chain opportunities, until lambs regenerate and new narratives emerge. If forced to act, better to join whale-led projects with clear strategies. Projects relying purely on consensus, community, or sentiment carry higher risks now. Colin, what’s your take on altseason?
Colin: Two key points on altseason. First, we’re all here to make money. As long as we profit, nobody cares whether there’s an altseason. Even without one, if you make big money, everyone would accept it. So before discussing altseason, return to a more fundamental question: When choosing to buy or trade altcoins, recognize this: alts are highly volatile. Most retail investors buy alts hoping they’ll outperform BTC. Of course, they also fall harder than BTC. Regardless of strategy, understand this: the decisive factor for each buy or trade is its expected value. Like a lottery—winning pays big, but odds are tiny. That’s the risk-reward tradeoff. For alts, executing a buy-and-hold strategy is questionable because expected value likely isn’t positive. Suppose you bought an alt in early 2024, then BTC stagnated, causing your alt to drop 80%. Even if it later rises 4x, you’re still underwater—cost unrecovered. Simple math. Whether altseason comes or not, whether you anticipate it—this debate misses the point. Return to first principles: alts rise only with capital inflows. For a true altseason, capital must flood into nearly all alts simultaneously. Given the sheer number of alts today, broad-based rallies are extremely difficult.
Second point: Some may recall that during 2024’s first major surge—early this year—altcoins broadly rose with Bitcoin. But afterward came a painful period. Then in November—Trump’s election—alts rallied again, but this rally differed sharply from the first. This time, alts rose via sector rotation: DeFi one day, platform tokens next, oracles the day after—very obvious. One sector surges 20%–30%, shifts to another in days. This isn’t the broad rally seen earlier. I realized then: even a crypto-friendly president’s election—sending BTC above $100K—resulted in alts rising only through rotation. That seemed unreasonable. Logically, they should surge more violently. Rotation implies insufficient capital. Imagine smart money rotating profits from sector A to B, then to C—hence the rotation pattern. Observing this, I turned bearish on future alt markets. If even such a major catalyst only produces rotational rallies, capital preference is clear. After all, 2024 belonged to Bitcoin. Year-end brought this rotation signal—I’ve been bearish on altseason since. Recent strength? Each alt rebound stems mainly from BTC or ETH surging, dragging alts along. The key isn’t whether they rose, but whether they sustain. Sustaining doesn’t require further gains—just holding ground. If an alt rises 80% then slowly drifts back, holders suffer immensely—likely negative expectancy. So returning to point one: fundamentally, if you trade alts, recognize this: you’re playing a “timing” game. It’s not about whether it’ll outperform BTC eventually, but about drawdown severity. If it drops too far, even multi-baggers may not recoup cost. From April to May last year, many friends-of-friends believed alts were oversold and aggressively bottom-fished. Later, many couldn’t endure, cut losses, and faced losses. This lesson must be shared: upside is huge, downside capped at 100%. But if you drop 80%, you need 5x to breakeven. Hence “timing”: buying alts means not just picking the right asset, but the right moment. Alt trading isn’t just betting on volatility—time is equally critical.
Alex: Understood, very comprehensive. We discussed altseason in the last episode too. I shared our team’s internal view then—still unchanged: we remain skeptical. Conclusion is simple: even with recent alt rebounds, we’re still bearish—especially on sustainability. Reason is direct: fundamentals across alts are generally terrible. As Colin noted, this cycle’s disillusionment with alt valuations is typical, evolving stage by stage. Around February–March 2024, alts exploded—felt like reliving 2021. Groups buzzed daily: “What’s up today? What’s pumping tomorrow?” Everyone seemed explosive—money ready to deploy. After that bubble burst, we reached the point Colin mentioned: Trump’s election. BTC surged first, alts followed weakly—hesitant, lacking force. Alts were quickly overtaken by Meme coin mania. Liquidity vanished, interest faded. This current rebound may be the third minor alt bounce in the cycle—but personally feels weaker. For example, ETH rose ~22% last week, but most L1/L2 alts with far smaller market caps rose less than 22%—failed to outperform ETH. That’s barely keeping pace. Some alts showing larger gains did so because their prior drops were deeper—like Algo or Story (IP chain)—up 30%–40% recently, but from much lower bases. So our team’s current alt assessment remains: weak fundamentals, weak narratives, ongoing valuation collapse. One could interpret this as market maturation—a sign of investor sophistication. Viewed this way, it’s quite reasonable.
Preparing for Cross-Market Investing
Alex: Next, the final originally planned topic—after which we can discuss Ethereum. Many around us face this: numerous crypto investors and even professionals believe industry opportunities are rapidly shrinking, so they’re exploring non-industry jobs or investments—like U.S., Hong Kong, or even China’s A-shares. A-shares have performed reasonably well recently. Do you have specific views on this? Have your own approaches changed? Would you consider opportunities beyond crypto? We know Colin invests in U.S. equities—mostly index-based, if I recall. Any plan to study individual U.S. stocks? And Chain Nomad, any preparation on your end?
Colin: Yes, I do invest in U.S. equities—primarily indices. Regarding whether crypto opportunities are dwindling, I echo earlier points: the market is maturing. It’s entering mainstream awareness through diverse channels. More people notice Bitcoin, want to participate. BTC’s market cap grows visibly fast. This resembles Bitcoin
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