The crypto market is becoming more and more like the US stock market, and retail investors' trading logic has already changed
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The crypto market is becoming more and more like the US stock market, and retail investors' trading logic has already changed
Whether in the U.S. stock market or the cryptocurrency market, the market structure has already shifted from "open growth" to "private domain development," with capital gains front-loaded.
Navigating Web3 tides with focused insightsAuthor: Kogawa Mine
Let's discuss why the crypto market will never again see the kind of altcoin seasons we had before, and how to navigate future markets.
In one sentence: The crypto market is becoming more and more like the US stock market, and today’s US stock market is no longer what it used to be.
What was the US stock market like in the past, and what is it like now?
The typical path for the US stock market before 2010 was: Startup – Growth – IPO – Retail investors join during growth phase – Long-term compounding (companies eventually buy themselves back via profit-driven share buybacks).
Duan Yongping once said: The only real buyer of a true company is the company itself. It uses its own earnings to eventually buy itself back. But there are many derivative states—so as long as the company ultimately earns enough profits, so much that you're drowning in them, it will inevitably have to buy back shares.
For example, Tesla’s IPO price was $17 (June 2010). Accounting for the 5-for-1 split in August 2020 and the 3-for-1 split in August 2022, the total return today is approximately 354.7x—with stocks like the Magnificent Seven, retail investors could participate in a company’s journey from billions to trillions in market cap.
The Magnificent Seven all follow this logic ↑ retail investors only need to deeply understand a company’s business model and core culture, then buy and hold long-term—they’d basically capture the era’s rewards of the US stock market. Buffett-style success was also shaped by the times.
After 2010, the US market path shifted to: Startup – Losses – Prolonged fundraising – Continued losses – Soaring valuations – IPO at peak – Capital recoups cost, profits, and retail investors get stuck holding the bag (even if they eventually break even, they must first endure massive drawdowns and opportunity costs).
After 2010, with the explosive growth of VC, PE, and sovereign funds, the phenomenon of “prolonged privatization” emerged. For example, leading AI companies today like OpenAI—still private—already boast a valuation of $500 billion, while Anthropic is valued at $180 billion.
Rounds and rounds of funding allow companies to reach billion-dollar valuations before going public; by the time they go public, the juiciest part of their growth has already been consumed by early-stage investors. Ordinary investors are left getting “dumped on,” not “being time’s friend.”
A hot stock might offer a short-term FOMO-driven surge—multiples within days—but just like new tokens on Binance, some may spike for two days after listing. Hold on, and chances are you’ll end up paying the bill. A classic example is Circle (CRCL), which jumped from its $31.00 offering price on its first trading day, opened around $69, surged close to $300, then steadily declined. The current price is back at $70—a rollercoaster that fell right back to its opening level on day one.
The crypto market today is exactly the same. In the past, countless altcoins had market caps in the tens of millions, offering many 100x or even 1000x opportunities. Now, almost any new token launches with a $100 million to multi-billion dollar valuation, and most peak at launch, then decline for years—even as their absolute market cap grows larger.
Whether in the US stock market or crypto, market structure has shifted from “public growth” to “private development”—capital gains are front-loaded. Today, even many institutions participating in early-stage crypto deals are losing money. This sentiment cascades through the ecosystem, causing everyone across the value chain to rush into harvesting mode, afraid to stay patient. Under these conditions, it’s increasingly difficult for retail investors in crypto to make big money from altseasons or altcoins.
Also, don’t just focus on US indices and the Magnificent Seven. First, ask how many people CRCL trapped. From the beginning of this year to now, over half of the stocks in the S&P 1500 have been down—doesn’t that sound familiar, just like most altcoins in crypto?
How to respond:
1. Large capital in crypto should go long only on major coins like BTC, ETH, BNB, XRP, etc. (criteria: staying in the top 10 market cap across 3+ bull-bear cycles), rather than DCA’ing old alts or new alts this cycle that you believe have long-term potential. Remember: even if a new altcoin this cycle makes you financially free, the fate of the old alts will eventually catch up to them too.
The same applies to the US market: if you can’t beat it, just buy Berkshire Hathaway or the S&P 500 index, or DCA into the Magnificent Seven (Apple, Microsoft, Amazon, Alphabet\Google, Nvidia, Meta, Tesla)—long-term, these are basically guaranteed wins. But making money doesn’t mean you understand it—yet if you actually do this, you’ve already shown that you do understand.
2. For short-term trading, when a new coin launches—regardless of its background—either don’t believe at all, or believe early. Never hold long, never try to catch the bottom—only ride the first wave as a short-term play.
No matter how strong the fundamentals or story, never hold long-term. Trump coin and Circle (CRCL) have already taught us a powerful lesson. Don’t fear missing the “next Nvidia”—you likely won’t hit it anyway, and your principal might already be gone. And buying doesn’t mean you can hold; most people would be better off gaining self-awareness early.
3. Avoid futures contracts and leverage, especially in a highly centralized, weakly regulated market like crypto—retail traders’ data is exposed and running naked, visible to exchanges and whales. With such severe information asymmetry, you might win short-term, but you will lose in the long run.
(The results of Synthetix’s recent trading competition are out, featuring many top traders from the industry—search for details yourself)
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