What is the best cryptocurrency investment strategy after the Federal Reserve cuts interest rates?

Original Title: 《Raoul Pal Reveals the BEST Crypto Strategy After Fed Rate Cut》

Source: Real Vision YouTube Account

Translation: zhouzhou, BlockBeats

Editor's Note: The cryptocurrency market has shown strong performance in the past week, with expectations of a Fed rate cut initiating a global easing cycle. Compared to the same period last year, Bitcoin has risen by 13%-14%, while altcoins have surged over 50%. The market enthusiasm for Solana has waned, with more focus shifting to new L1 projects like Sui, and investor sentiment is gradually returning to rationality. The future market may fluctuate around elections, technical aspects, and macroeconomic backgrounds, with ETH seen as having undervalued opportunities and the potential for a revival in the NFT market. Raoul Pal is optimistic about the future of X Copy's NFTs and digital art, discussing the combination of NFTs and meme coins and their potential to enhance community engagement, especially the multi-cycle value of meme projects like Pepe and Doge, while emphasizing the importance of nostalgia and internet culture in the NFT market.

Guest Introductions:

Mando: Co-founder of Canary Labs and creator of Mando Minutes.

OSF: Co-founder of rektguy and Canary Labs.

Raoul Pal: CEO and co-founder of Real Vision.

TL;DR:

• Strong rebound in the crypto market: The cryptocurrency market performed well last week, with macroeconomic dynamics, especially changes in Fed policy, triggering a market rebound, particularly as technical sell-offs have become a thing of the past.
• Impact of Fed rate cuts: With the initiation of a global easing cycle, the market enters a new era of monetary policy, with Bitcoin and many altcoins significantly rising.
• Waning enthusiasm for Solana: Regarding the competitive landscape between Solana and Ethereum, it is noted that the Solana hype has diminished, and user attention has shifted to other L1s like Sui.
• Rise and fall of the meme market: The decline in meme coin speculation is similar to the downturn in the NFT market. Meanwhile, despite the current low sentiment around ETH, there remains significant potential in both the ETH and NFT markets during the macroeconomic easing cycle.
• New L1 projects gaining attention: Sui has performed strongly recently, mainly due to its integration with Circle's USDC and increased market attention. Avalanche's gaming ecosystem also shows potential, especially with Web3 gaming projects like "Off the Grid," which may drive a strong comeback.
• Quick Q&A: It was mentioned that the current market is mainly seeing a return of off-market funds rather than a large influx of new investors. Despite concerns about the yield curve and rate cuts, overall market sentiment has not seen significant capital inflows, with more institutional participation expected only when Bitcoin reaches new highs.

Strong Rebound in the Crypto Market

Mando: The cryptocurrency market has performed very well in the past week; how does everyone feel about the market?

Raoul Pal: We have been emphasizing that September is a good time to accumulate. The macroeconomic news this week is significant, especially the Fed's dynamics seem to have triggered a market reaction. There have been many major events this week, but now it seems everyone has a clearer understanding. People were hoping for a rebound after receiving more clear guidance, and clearly, many technical sell-offs have become a thing of the past.

FTX is set to return in the fourth quarter, and it seems this is a well-orchestrated Fed policy; we may be entering a two-year rate cut cycle. Although we may not immediately shift to quantitative easing outside of China, the global easing cycle seems to have restarted.

OSF: A few weeks ago, in the last two shows I participated in, we mentioned that if you plan to enter the market, now is the best time. At that time, Bitcoin was barely holding between $54,000 and $55,000, and we experienced a very volatile and illiquid summer. Before this week's rate cut, we discussed this issue, considering that the elections and benchmark rates are between 25 and 50 basis points, the Fed actually has a lot of room to cut rates.

Therefore, I think we mentioned a few weeks ago that whether you are bullish or not, if you want to take a risk in the market, that was the best time. Because Bitcoin has risen about 13% to 14% since then, and many altcoins and popular coins have risen over 50%. Now we need to figure out if this rise can be sustained; compared to previous false breakouts, we are at the beginning of an easing cycle, and the Fed hasn't done this for over three years, possibly even longer. We must understand that this is a paradigm shift, and we are about to enter a new era of monetary policy and global liquidity.

Impact of Fed Rate Cuts

Raoul Pal: This chart is very nice, provided by GMI Global Weekly, showing the liquidity of the private and public sectors of major global economies. This is a perfect indicator, leading by 10 weeks. The performance of M2 is similar. We also see that Bitcoin's seasonal performance has always been strong.

Let me share another chart. Bitcoin is repeating last year's trajectory, almost perfectly. We have the macro backdrop, the Fed will continue to cut rates, other central banks will also participate, and the seasonal and global liquidity cycles are in place.

I don't know what else is left; it seems now is the best time. Even the chart patterns indicate that there are usually three touches within the range at tops and bottoms, which is usually effective, so all factors are in place.

Mando: I publicly stated on this show that I have been dollar-cost averaging (DCA) over the past few weeks. But I think we may experience some volatility during the elections; if Trump wins, I think we might see a fierce rebound by the end of the year, as other factors are also at play, and the fundamentals are strong, with gold hitting new all-time highs every day.

This indicates that the divergence between gold and Bitcoin provides an excellent buying opportunity for Bitcoin. The recent negative correlation between them has mainly been due to technical sell-offs, but now it seems there will be technical buying in the fourth quarter. This week we have already seen Michael Saylor increase his convertible bond supply by $700 million, raising it to $1 billion, which means he has about $1.5 billion worth of Bitcoin to buy, and he will continue to buy.

This week, BlackRock stated they would tell investors that Bitcoin is the best hedge against the current U.S. debt crisis, further indicating that institutional demand is increasing. Additionally, countries like Qatar and Bhutan have also disclosed significant Bitcoin holdings this week, showing that more sovereign nations are entering the market. Meanwhile, FTX also has about $16 billion returning to the market. I believe both technical and fundamental factors have aligned. However, we may still see some volatility before the elections, but this window is really short; you will buy during the upward process rather than waiting for the lows.

Raoul Pal: These fluctuations may occur near the trend top, fluctuating around the $70,000 level for Bitcoin, possibly hovering between $70,000 and $75,000. However, regardless of the election results, the market will rise afterward, which has been validated in the past. The market performed well during Trump's presidency because he was very supportive of stimulus policies, friendly to cryptocurrencies, and regulatory aspects may also be more favorable. If this really happens, it could inject more momentum into the crypto market. During the last bull market cycle in 2016 and 2017, the Fed did not massively ease liquidity but had just begun to raise rates.

Mando: I think the impact of political factors is relatively small; market clarity is more important. I feel that even if Kamala is elected, the market will rebound. The market always rises when uncertainty decreases, and Trump may introduce more aggressive crypto policies, and there may be progress in crypto regulation. People are starting to talk about things like Solana ETFs, and I believe these will appear in the market; although they may be more favorable to altcoins, the overall market will rise in all scenarios because the fundamentals remain strong.

Raoul Pal: Kyle Samani mentioned in his speech whether Solana is an Ethereum killer, about whether ETH is really dead, and the trading situation of L1 and L2. What did you notice as the focus of the discussions in Singapore?

Waning Enthusiasm for Solana

OSF: I feel that the debate between Ethereum and Solana has reached a conclusion, especially given the significant price fluctuations of Solana in the past 12 months, so this topic is no longer heated. The atmosphere of discussion is more focused on macro-level issues, with everyone pondering whether this rebound is real or just another false breakout. This is the main focus of people's attention. What surprises me is that there is a general acceptance that Solana may not achieve much in the next 12 months, and many people are starting to pay attention to other L1s like Sui.

Raoul Pal: Why has the enthusiasm for Solana waned? There seems to be no signs of change in the ecosystem.

OSF: From my personal observation, people's sentiment may stem from the previous hype of meme coins, which many believe drove Solana's rebound in the first half of this year. And as the gaming nature shifted from PvE to PvP, many may have lost money in the process, leading to decreased attention. Many are starting to focus on Monad and Bear Chain, which are set to launch next year, and this seems to be one of the reasons I have become more cautious about Solana.

Raoul Pal: Monad and Bear Chain will launch in what could be the final phase of a bull market; why would retail investors buy them? Aren't only early investors likely to sell?

OSF: That's exactly the characteristic of retail investors; they did the same in the previous cycle, just like they did with Solana in 2020.

Mando: I think L1 trading has become more competitive. About 12 months ago, Solana was an obvious choice, but a lot has changed in recent months. When Solana was a practical trading asset, its use shifted to buying meme coins, which changed the trajectory of the coin. In the last 2-3 months, Solana's performance hasn't been bad, but it has shifted more towards payment infrastructure and DeFi, with user numbers remaining high but trading volume declining. I think this will slow growth.

Rise and Fall of the Meme Market

Raoul Pal: Do you think this cycle has ended? Or is this just the first rebound? Can it be compared to the early cycle of NFTs? What do you think? I feel we still have another wave, but it may be more concentrated.

OSF: I think this marks the end of meme coin speculation; it feels like the NFT market in 2022. At that time, you were no longer an early participant in this huge casino; the excess profits disappeared, and market participants became more mature. Now there are many tools and bots to enhance trading advantages. The simplest way is to create meme coins, provide internal supply, hype them up, and then dump them before moving on to the next project.

In the early days of NFTs, only a few projects performed well, but by mid-2022, new projects were appearing daily, many created by the same team. That freshness has disappeared, and it will be difficult to restore it. Unless a large number of users flood in, but I personally think that is unlikely, as the potential attention far exceeds the actual participants, and attention is dispersed.

Regarding Solana, besides price, market capitalization and circulating market cap are also important. Solana's circulating market cap is close to its historical high, currently at $69 billion, while the peak in 2021 was $75 billion, and this year's high was around $80 billion. It's important to remember that many Solana tokens are still locked, and a large number will unlock early next year, so don't just focus on price.

Mando: I'm not a short-term trader, but I think due to the strength of the meme coin cycle, new wallets may not rush back. While the tokenization of internet culture will be a major use case for blockchain, it may take some time to calm down. But I think some meme coins may continue to perform well, but the overall hype of meme culture may significantly weaken. NFTs and culture will merge into new forms, which may manifest in the next cycle.

I bought a lot of ETH this week; I feel the current narrative has been suppressed. Many people are discussing L1 and L2 issues, and I've seen some analysts suggest we are nearing the bottom, with a potential rebound. Although ETH hasn't seen a real rebound yet, I believe it is undervalued.

Raoul Pal: I want to share a hopium chart with you. Although these charts sometimes collapse when needed most, technically, they seem to be on track.

OSF: It now feels like Ethereum's sentiment has reached a historical low. If there is a general risk rebound, ETH should perform alongside BTC. But ESPDC has dropped from 0.059 before the ETF announcement to now 0.04, a significant decline, mainly because the Ethereum Foundation is selling, and participation is not as active as in other projects like Solana. The attention within the Ethereum ecosystem is highly dispersed, with many different L2s and meme coins. It feels like if someone wants to chase returns, they might choose to buy other L2s rather than focus on ETH.

Mando: I'm not always bullish, but from a relative value perspective, if Bitcoin continues to decline, while Solana may rebound towards a fully diluted market cap of $100 billion, I think ETH also has a lot of potential.

Raoul Pal: I have recently been buying X Copy's NFTs, primarily digital art. X Copy's works have performed well recently, with some smaller pieces selling for 300 ETH, which may indicate that the NFT market could be reviving. I have a strong theory that as the crypto market cap rises from $2 trillion to what I believe will be $100 trillion, the art market will also thrive, creating unprecedented wealth.

I started buying X Copy in January and have been buying throughout this year. This has inspired many people, and I often share my views that culturally relevant artworks will be the first to be sought after. But I believe the market will expand again; art will not disappear. Although X Copy's prices have declined, I think we will see rotation, just as Bitcoin dominates the market; as the market expands, other Layer 1 and Layer 2 assets will follow suit.

Mando: I agree; in 2021, we saw many emerging artists enter the market with successful releases. My point is that for a long time to come, the tokenization of internet culture will continue. People will continue to buy relics of internet and blockchain culture. What we are seeing now is that more and more major collectors are starting to pay attention to these digital artworks, which could lead to a new sales boom.

Nostalgia is valuable; people always look back, and that sentiment is precious. For example, the prices of Oasis concert tickets are now very high, which is turning nostalgia into money. People are willing to pay high prices for this because these cultural moments mean a lot to many. The cultural moments of 2018, 2019, and 2021 will forever remain in the memories of participants, and over time, the value of these works will only increase.

OSF: Do you think similar NFT collecting activities will happen on Solana or other chains? Will it be lasting?

Raoul Pal: I have NFTs on Solana, but I can't see them in the same place, nor in my OpenSea or wallet, which I find troublesome. So I feel these activities are more likely to happen on Ethereum.

OSF: Do you think NFTs and meme coins will merge at some point?

Raoul Pal: To some extent, the rarity of NFTs has greatly enhanced the status of the meme coin community. When I discussed with the Smoking Chicken Fish team, I mentioned that they could issue identities as NFTs for priests and bishops, and everyone could use NFTs to purchase these identities.

OSF: I think the PFP community was one of the strongest communities in 2021. For them, the biggest barrier is joining this club. If the cheapest NFT is several thousand dollars, it is hard for people to become part of this community. If you have an NFT collection with a meme-based community and a related meme token, that's A plus B. I think this is a very powerful combination because you can show off by buying a gold or rare NFT, but you only need to spend $1 to enter this community.

Raoul Pal: I know many people are not optimistic about the Bored Ape Yacht Club, but they really have a club in Miami, and we all use it when we go there. I can see this idea spreading; they are also trying to leverage ApeCoin and ApeChain, and they have grand ideas that are all interconnected.

Mando: What would you suggest the audience buy as the top three items? Besides X Copy, since you need $700,000 to buy it. What items might be more valuable?

OSF: I still think Pepe is severely undervalued in the NFT market. Although technically it is not an NFT on Ethereum, the original ones are rare. You can purchase the original NFT from 2016, which I believe represents the largest meme character in internet history. Moreover, the difficulty of purchasing is high, which I think is actually a feature. So, owning a rare Pepe is almost the most primitive existence in the NFT field, both in historical and cultural significance. And I absolutely wouldn't underestimate Doge; if someone asks me what I would buy to enter this field, clearly X Copy has already secured a place in the art narrative. I think Pepe and Doge might be the largest multi-cycle memes you can own; they will experience wild fluctuations but will never go to zero, always retaining some value of internet culture.

Mando: What about the broader NFT market?

OSF: I feel that many NFT prices have already been suppressed, but I can see projects like Bored Apes rebounding. Perhaps the prices of Mutant Apes are currently relatively cheap, while X Copy is in a state of maximum pain.

Raoul Pal: We should also agree on the value of Punks; everyone talks about Red Guy, but I don't oppose it either. I think Red Guy, MFS, and Crypto Butts are all works of that era and will always be remembered by culture, so they will always have value. The key is whether MFS or MF tokens truly have value or are just gimmicks to attract attention.

I believe that as long as there is an opportunity to revitalize the NFT community at the right time, it will be rejuvenated. Most people ultimately won't sell these things; they just identify with them. If I share my screen, you will find that these things will always be remembered. I think now is the time to pick those projects that were still remembered from the last cycle but are relatively cheap; they are likely to continue to receive attention in the next cycle.

I do believe these things will persist, but now you really need to choose wisely; internet culture and crypto culture will clearly accompany us, and you can guess which things will become folklore, but you must have those qualities.

New L1 Projects Gaining Attention

Mando: Next, let's focus on this week's top performers. Do you know how L1 chains are performing? For example, Sui, which was trading at less than $0.5 in mid-August, has now risen to $1.5, tripling in less than a month and a half. I feel it is close to its historical high, and its market capitalization is also increasing, although there is some dilution due to a significant amount of unlocking.

This week they announced the integration of Circle's stablecoin USDC onto the chain. Last week, Grayscale also started paying attention to Sui, beginning to raise funds from institutional investors. All of this feels like it is building momentum. Raoul Pal, do you think this project will continue to push higher? Could this be a game changer for Sui?

Raoul Pal: I have been thinking that perhaps this is one of the chosen projects. The reason is that the team is excellent; they have built a scalable blockchain suitable for over 3 billion people. Their technical strength is strong; although the narrative was initially lacking, it is now gradually becoming active. In fact, they have reduced the chain's latency to 600 milliseconds, which is very fast. They are building a data storage layer called Wall Rust, which will be an independent token, basically similar to AWS, built on the entire Move virtual machine. Additionally, their Pilot Fish is also launching, similar to Fire Dancer, which can provide almost unlimited TPS. Moreover, their business development team is very strong.

Clearly, they have just partnered with Circle, and there are definitely many other collaboration opportunities, whether in gaming or real asset fields. So they are now attracting market attention. It is worth noting that this project has low circulation; once it attracts attention in a low circulation situation, performance usually exceeds expectations because the surrounding quantity is small.

For other projects like Ethereum, the situation will not change much. I know people have biases against low circulation projects; you will like them in a bull market and hate them in a bear market because of their volatility. But they are successfully attracting market attention, and people are looking for the next big opportunity. Now everyone is asking whether Solana's trading is over and what will come next? So this project seems to be very well positioned; I don't think there are any other projects that can dominate the market right now.

I looked at the charts of Sui against the top 20 tokens and didn't see any projects that can compete with it; recently, only Monad and Bear Chain might perform. But that doesn't mean projects like Celestia won't rise; it's just hard to see any other projects outperforming Sui.

Mando: It is indeed the best performer among the top 100 this week. I remember you posted a comparison chart with Solana a few weeks ago, and it performed really well during that time. Its market cap is $4 billion, with an FDV of $15 billion, and the unlocking amount is also relatively considerable. Large-scale unlocking has already occurred, and the worst seems to be over.

I think Sui's story leans more towards B2B; their recent integration in B2C has not been very obvious, especially with some consumer crypto applications. However, the integration of USTC may allow their DeFi projects to grow. The current total locked value (TVL) is also substantial, reaching $80 billion, putting it in a good position. This is a project that has tripled in a month and a half, so caution is warranted. But at the same time, it has indeed attracted attention and is leading among other L1s. Phantom is also a highlight because they have some new dynamics, but Sui seems to be more in the market's spotlight. We see many people selling Ethereum to invest in Sui, feeling they missed the opportunity with Solana.

Raoul Pal: Another interesting project is Avalanche. I just interviewed John Wu from Avalanche, who is the head of gaming at Term Delphi. He mentioned their investment in the game "Off the Grid," which might be one of the best Web3 games I've seen. If this game succeeds, it will be a big event.

Previously, gaming experienced a strange cycle; about a year ago, it was very strong, with many different coins emerging. Today, a game coin worth $1 billion was launched on the Ton network. Additionally, a mobile game launched by ByteDance on Telegram also reached a market cap of $1 billion today. Next week, a game called "Hamster Combat" is set to launch, which is expected to reach billions.

Mando: If that's the case, AVAX's gaming ecosystem is indeed strong, and we might see its strong comeback. At the OSF conference in Singapore, did you hear any other narratives about altcoins? Someone mentioned Deepin as a major one, but I feel it has some integration with Grab, and it seems to be the strongest in its current direction.

OSF: I agree with that. However, this conference didn't yield any special insights for me. Usually, when I attend such conferences, there are always some new ideas or projects worth paying attention to, but this time it felt like a meeting filled with disappointment. Compared to previous events like NFT NYC or Consensus, everyone seems to be focused on whether there will be a rebound, with no particularly exciting projects.

Mando: Have you discovered any interesting projects or early trend projects recently?

Raoul Pal: I joined the board of Club Divan, and they are launching their token today or tomorrow. For me, it's not about the token price, but whether these things can truly be used for loyalty, logistics, deep integration, and all the discussions around it.

In the market, I am very concentrated in my investments, mainly in Solana and Sui; even my meme currency only consists of Doge and Smoking Chickenfish. So I am very concentrated. My NFTs are my long-term savings investments, aiming to hold good things for ten years. If you think there is a good investment story, don't act rashly, as you may inadvertently mess things up.

Mando: Additionally, I saw a headline this week about Bhutan, claiming to hold $780 million worth of Bitcoin. I know you have contact with various sovereign wealth funds and governments, providing blockchain and blockchain strategy advice. Do you think we will see more stories like this? About a week ago, Qatar introduced crypto regulation, which was relatively quiet? Based on your conversations, do you think we will see more adoption at the sovereign level?

Raoul Pal: I think if they do this, they may keep it low-key. The last thing you want to do is signal to the U.S. reserve currency that you don't want to hold their currency, or even be somewhat hostile towards them. So I feel Bhutan is an exception; they are reclaiming electricity. We know Iran is mining, and I believe Saudi Arabia is also mining. I have talked with Abu Dhabi about utilizing gas flaring for mining. I think there will be experiments, but I don't believe there will be large-scale accumulation of Bitcoin by sovereign nations.

Don't forget, the U.S. can analyze blockchain item by item, so you can't avoid them. The only real way is to invest in Bitcoin miners like Temasek to acquire virgin Bitcoins, so that is the only untraceable way.

Mando: Do you think Gulf countries will develop a strong interest in Bitcoin as a diversification tool due to changes in oil prices and many commodity prices, especially in the energy sector? I see a lot of articles about Saudi Arabia under budget pressure.

Raoul Pal: Their payments are all made in dollars, and they must handle these matters very carefully. They will do some things behind the scenes, but I don't think we will suddenly see Saudi Arabia buying $10 billion worth of Bitcoin every day for the next 50 years. I just don't think that will happen. I think that is a somewhat overly optimistic thought, but of course, there will be more participation.

I have talked to the head of a sovereign fund in Australia, and he clearly stated, "I will never put cryptocurrency on my balance sheet." He said he would engage in venture capital and other things. I asked him why, and he said, "I can't do that at G7 meetings or World Bank meetings; I can't do it." This indicates their clear attitude towards cryptocurrency.

Mando: Do you think Gulf countries might not even be allowed to purchase cryptocurrencies? They must buy dollars and may not be allowed to diversify?

Raoul Pal: To some extent, they will do some covert operations within their sovereign wealth funds, but this is all marginal. Don't forget, Saudi Arabia has not yet participated on a large scale in this field; they are still hesitating, and the regulations are not very clear. Perhaps Qatar and some other countries will take action, but I don't think there will be any public announcements; operations like Bhutan's have been ongoing for years in a low-key manner.

Mando: If oil prices continue to fall, I think there might be a diversification impulse. Especially if the large shale oil fields in the U.S. recover production or grow, Gulf countries will face more questions about how they view cryptocurrencies.

Quick Q&A

OSF: How do you classify those database-based alternative tokens?

Raoul Pal: He has about $1,000 worth; I understand the significance of utility tokens, but I'm not sure how much value they can accumulate in such a large use case. If they can build a larger ecosystem and compete with standards and other data services, then it will be a valuable network. But it's still uncertain; let's continue to monitor their progress.

OSF: Regarding deep incentives and their role in the cycle, which specific projects are you focusing on?

Mando: I learned about this project from comments at Token 2049. Singapore has begun integrating some deep incentive applications, and the most successful application in the U.S. is the mobile provider Helium. I think it is growing rapidly, with hundreds of thousands of users using their mobile plans, and they hope to continue expanding. If this project succeeds, you will see similar projects emerging in many different countries. Basically, you can run a small network at home, enhance the 5G capabilities, and get rewarded with local tokens. Currently, their network coverage in the U.S. is very good, and they seem to be planning to promote it in multiple countries.

I think this is a major winner in the deep incentive cycle, along with some other projects that have merged AI and data storage, but this is one of the standards I believe in. Additionally, I think they are experimenting with a version similar to Uber on Solana; this idea has been proposed for a long time, but it didn't succeed when tried in India, and now a new project is launching, which could be interesting.

OSF: Does the inversion of the yield curve returning to normal raise concerns? Many say this is an indicator of economic recession.

Raoul Pal: This is the macroeconomic pessimists looking for another reason for a market crash; inflation will return. This signal has appeared in the past but did not work. Our current yield curve is distorted by factors like the Fed issuing bonds, and I think we should ignore it.

Mando: I agree. People often say that historically, rate cuts are signs of economic recession. But you can't just use rate cuts to speculate on every situation. Did we have a crazy AI bubble and AI craze the last time rates were cut? When that happened last time, rates reached a 40-year high, and the stock market continued to create historical highs; this has never happened. So we are in a new paradigm now, because of the impact of AI and tech stocks; you can't simply compare the current market situation with past rate cut situations.

OSF: The market feels like retail investors are repurchasing and trying to position themselves as early as possible. Are there any signs of large funds flowing into the cryptocurrency market?

Raoul Pal: I haven't seen any signs, and everyone I've talked to says they are not raising funds right now; everyone is waiting and watching. I think RAA networks, family offices, and some institutions are more likely to enter when Bitcoin exceeds $80,000. The current flow of funds is just some off-market funds returning; I haven't seen more situations. Have you seen anything?

Mando: Throughout the cycle, I also feel that there haven't been many new investors entering the cryptocurrency market this time. There was a bit of incremental growth at the beginning of the year, but it gradually weakened. However, I think ETFs have also siphoned off some on-chain holders. Currently, the number of Bitcoin holders and deposit addresses is at a five-year low; I feel a lot of funds are shifting towards ETFs. To get people to FOMO in, they need to hear attractive stories; Bitcoin needs to reach new all-time highs again, so it seems people are just repurchasing assets they previously sold rather than new wallets joining, but that doesn't mean they won't enter later.

Raoul Pal: For example, in March and April, there was a large number of inquiries, and now the market is consolidating; they might hesitate a bit. I guess when we reach new all-time highs again, their conversion rate will be very high; that's a natural tendency.

Mando: FTX is also a big project; $1.6 billion is not a small amount, but most of the pre-sale went to Galaxy and Pantera, which somewhat suppressed the market because these unlocks have already occurred. Some say the actual funds entering the market may only be $2 billion to $3 billion.

OSF: This potential impact has two aspects: FTX's asset sales have been running in the market for a while, and the other is the flow of funds back to depositors, some of which have also been sold. I heard some sold claims for 10 cents, and of course, the recovery price has now exceeded par. But I think the secondary market impact of returning funds to depositors should be positive, provided not everyone has sold their claims.