What is the dilemma of the hardest bull market to make money in history? How long will the craze for AI Agents last?

Source: Talking Li, Talking Outside

The CES2025, known as the Spring Festival Gala of the tech world, is being held as scheduled these days, and NVIDIA has once again become one of the focal points. Jensen Huang showcased a series of products, including:

• Project DIGITS (a personal supercomputer priced at $3,000, reportedly with performance 1,000 times that of a regular laptop)

• The new RTX Blackwell series (including RTX 5090)

• NVIDIA GB200 NVL72 (a data center super chip equipped with 72 Blackwell GPUs)

• NVIDIA Isaac GR00T Blueprint (a simulated workflow for synthetic motion generation)

• Thor Blackwell (next-generation automotive processor)

• NVIDIA Cosmos (an open-source, open-weight foundational model for video worlds)

Moreover, Jensen Huang predicted that Robotaxis (autonomous taxis) and Self-Driving will become the first trillion-dollar industries, with NVIDIA collaborating with Toyota to produce the next generation of self-driving cars. Additionally, they plan to deploy autonomous trucks on a large scale by 2027.

In contrast to the excitement in the tech world these days, the crypto market seems to have kept many people awake at night. According to on-chain data, in the past 24 hours, 176,564 people across the network were liquidated, with a total liquidation amount of $562 million, primarily from long positions, amounting to $504 million. As shown in the figure below.

This morning, I also noticed that some partners in the group have had some new reflections and reviews regarding the market conditions of the past few days. I think this is very good; trading is inherently a serious matter, and we should manage our positions well while quickly controlling our emotions. As shown in the figure below.

Many people have been complaining about the market recently, but I think this needs to be viewed comprehensively:

From the price perspective, in this cycle, BTC has risen from around $15,000 to about $108,000, and ETH has risen from around $800 to a peak of about $4,100, which is quite a significant increase.

From the development perspective, after years of failures, the spot ETF finally passed the review last year (2024), and the inflow of funds into BTC ETF and ETH ETF has been setting historical records. Moreover, with the entry of large institutions like BlackRock and MicroStrategy, as well as the election of a crypto-friendly U.S. president, the crypto industry has now become a recognized sector, and in the not-so-distant future, Bitcoin may even be included in the strategic reserve plans of more and more countries.

Although the market may continue to face various issues in the short term, from a long-term perspective, we are very optimistic about the development of the crypto market.

1. The Most Difficult Bull Market to Profit From in History

So far, this bull market has been referred to by many as "the most difficult bull market to profit from in history." We actually understand this viewpoint very well because, compared to previous bull markets, most of the increases in this bull market seem to have been driven by external macro factors. As some partners have put it, this bull market has basically lacked internal innovation.

Regarding the issue of a lack of innovation, we have discussed this in previous articles on Talking Li, Talking Outside. We believe this is also a necessary path for the development of things because, as an industry matures from its wild growth phase, the internal innovation engine typically slows down periodically. This can be simply understood as a natural phenomenon.

However, it should be noted that in some special circumstances, even if the internal innovation engine of an industry slows down, prices may still rise. One important logic here is the external factors driving the market (for example, the ETF has driven this bull market).

In the current crypto market (or crypto industry), we believe that the lack of innovation may not be the fundamental issue. One of the core reasons for market volatility now may be that the overall sentiment is gradually undergoing a qualitative change.

In the past, the crypto market was characterized by completely wild growth, filled with radical ideas and high-risk gaming, with the slogan that blockchain would change (or even revolutionize) the real world being a common refrain. Now, with the popularization and advancement of ETFs, the deeper participation and adoption by traditional large institutions, and the ongoing regulatory follow-up by government departments… more and more people are beginning to return to rational investment, no longer pursuing the traditional radical ideas and high risks of the "crypto circle."

In terms of viewing the development of things, Vitalik's (V God) thinking seems to always remain ahead of the curve. For example, he mentioned a broader vision in a previous blog:

"we are not here to just create isolated tools and games, but rather build holistically toward a more free and open society and economy, where the different parts --- technological, social and economic --- fit into each other."

"We are here not just to create isolated tools and games, but to build a more free and open society and economy as a whole, where different parts can integrate with each other, such as the integration of technology, society, and economy."

However, currently, Vitalik's personal vision seems to have diverged somewhat from ETH's vision. Although we still have confidence in ETH's performance going forward, it is evident that ETH seems to have lost some of its original ambition, and Ethereum seems to have offloaded some of its initial visions to L2.

2. Does AI Count as Innovation?

Earlier, we talked about innovation, and some may start to disagree: don't the recently popular AI agents count as innovation?

Of course, I do not deny that. What I mentioned earlier is that the internal innovation engine of the crypto industry is slowing down, but I did not say that there is no innovation at all in the current crypto industry. In this cycle, if we had to summarize a relatively representative innovation that could convince most people, the AI x Crypto concept would likely rank quite high.

Let's continue to explore the innovation of AI:

If we recall the past cycle, we should be able to intuitively see that the AI concept has gone through several rounds of popularity.

First, at the end of 2022, ChatGPT became a global sensation, sparking a wave of interest in large AI models. At that time, we published some articles about ChatGPT, although some of those articles are no longer accessible. As shown in the figure below.

Subsequently, tokens related to the AI concept began to be speculated upon, with prices rising and many AI-themed MemeCoins emerging. If you experienced the first quarter of 2023, you should still vividly remember the market conditions of AI concept coins at that time.

Next, around September to October 2023, as the scent of a new bull market grew stronger, various sectors began to see rising trends, one of the most representative being the AI narrative. During that period, we also shared and organized some AI-related projects, as shown in the figure below.

Finally, we have already experienced the AI Memes from last year and are currently going through the AI agents craze.

After recalling the major waves of AI x Crypto over the past few years, if we take a moment to think, we will notice a clear issue: AI is actually more of an external innovation.

This can be simply seen from NVIDIA's stock performance over the past few years. In the past five years, NVIDIA's stock has increased by 2,193.62%, as shown in the figure below.

In other words, if this bull market had not been driven by the external innovation of the AI concept, further igniting the AI x Crypto concept, the crypto market might have lost much of its excitement, and there wouldn't have been so many MemeCoins (even though the vast majority are likely to go to zero). Moreover, MemeCoins seem to be one of the core narratives that can still maintain the original "wild growth" nature of the "crypto circle" in this bull market, as their sole purpose is gaming, and this unique rapid wealth (or zero) model in the crypto circle seems to have been relatively unaffected by external factors.

Aside from (AI x Crypto), we seem to have not seen many innovations that can sustain their popularity in this cycle. Concepts like BRC20 and the Bitcoin inscription ecosystem have only heated up twice, and the Runes concept hasn't even seen the large-scale explosion that people initially imagined. Many other so-called new concepts (innovations) have even completely fizzled out in less than two weeks. In contrast, in the previous bull market cycle, we could still see many internal innovations, such as DeFi, NFT, GameFi (P2E), and Metaverse.

In short, the ICO boom of 2017 can be considered an internal innovation, the DeFi boom of 2020 (including various innovative token economics models, liquidity mining, algorithmic stablecoins, etc.) can also be considered an internal innovation. However, in this cycle, the vast majority of projects no longer pursue internal innovation or visions that can change the world; they prefer to issue tokens through simple copying (or pseudo-innovation) to profit from retail investors.

However, as long as there are opportunities for speculation, this field will continue to attract people with dreams of quick wealth to join, even though it is filled with higher risks and more of the "dark forest" rules (survival of the fittest, where veterans earn from novices).

Perhaps we are currently experiencing some bubbles or are about to face larger bubbles, while also dealing with the issue of the internal innovation engine slowing down or even stagnating. However, the wheels of history will surely move forward, and perhaps in the near future, after the so-called bubbles dissipate, at least 1-2 killer applications will emerge to continue driving the industry's development. As for who will ultimately come out on top, we do not know; we can only leave that to the market and time to verify.

If you are merely speculating in this field and do not believe in its future development, then how you choose to game is your freedom, as long as you can bear the risks involved. However, if you hope to grow alongside the crypto field, you should remain patient and pay more attention to narratives or projects with long-term development visions. There is no need to look far; the simplest approach is to hold BTC, or you can directly choose your favorite projects from the top 100 by market cap. Just to name a few examples:

Chainlink, ranked 13th by market cap, is essential for connecting blockchain with the real world, and it has a solid foundation and advantages in this niche.

Uniswap, ranked 20th by market cap, has seen increasing acceptance of DEXs, and as the leading DEX by market share, Uniswap can be likened to an "excellent company" in traditional finance.

AAVE, ranked 31st by market cap, is currently a leader in the lending space, holding over 60% of the market share. If large institutions are optimistic about it, why shouldn't you be?

Ethena, ranked 46th by market cap, is a synthetic dollar protocol with complete transparent on-chain support, integrating DeFi, CeFi, and TradFi.

Pudgy Penguins, ranked 53rd by market cap, was quite popular in 2023 and was referred to as the "new NFT king" at that time because it managed to rise against the tide during a downturn in the NFT market, becoming a highly visible project and expanding its Web3 IP brand into Web2.

WorldCoin, ranked 60th by market cap, was very popular after its launch, but it later generated considerable controversy, such as privacy issues. Scanning human eyes (iris) with the Orb device is a very radical action, but if this project succeeds in the future, its commercial value could be revolutionary.

Arweave, ranked 94th by market cap, is a topic that people don't discuss much anymore, but there is an underlying demand in this field. In terms of application, AR's implementation and real adoption seem to be relatively well executed.

Of course, the above are just a few random examples selected from the top 100 by market cap for demonstration; you need to conduct targeted research based on your preferences. The above content is not investment advice.

3. How Long Can the Popularity of AI Agents Last?

Returning to the topic of AI, let's continue discussing AI agents. According to on-chain data, AI agents have remained at the top in performance over the past 30 days, indicating their popularity. As shown in the figure below.

I remember when I was in the workplace, some people always shouted slogans about innovation, innovating for the sake of innovation, only to end up stacking blocks in the same place, as most people did not break out of their established thinking patterns. This seems somewhat similar to the current hottest topic in the crypto market: AI Agents.

According to on-chain data, there are currently at least 1,000 projects related to AI Agents, with about 100 of those projects (tokens) being relatively active in trading. The total market cap of Agents-related tokens has already exceeded $15 billion. As shown in the figure below.

As usual, whenever a concept (narrative) becomes popular, new related tokens will spring up like mushrooms after rain. Now, AI agent tokens based on ai16z, Virtual, and Swarms ecosystems are rapidly increasing, and scams related to the Agents concept have also noticeably increased, making the risks even greater. If you still want to catch this wave, you must be cautious and strive to adhere to what we mentioned in the article: avoid what you do not understand.

Before participating in any Agents-related projects, you should conduct some necessary research, such as:

• Entering the project's website to check the real discussions in the TG group.

• Finding the GitHub link through the website to check the number of files or the code's reasonableness, such as avoiding projects that upload code via "Add files via upload" or lack detailed update descriptions (you can search for tutorials on using GitHub on Google/YouTube).

• Conducting searches on social media platforms to see the discussion levels around the corresponding project and any evaluations from others.

• Checking the token's distribution, whether a small number of wallets hold most of the tokens, and if the top 100 token-holding wallets are mostly newly created wallets, etc.

In short, you need to find dimensions that you care about to understand the project as much as possible, rather than blindly buying in.

As for how long this wave of AI Agents token issuance that started around November last year will last, we do not know; it may continue until the end of the first quarter of this year. However, it is foreseeable that as the popularity of AI Agents declines, most of these tokens will likely go to zero like MemeCoins, because aside from many scam tokens (which appear to be packaged as smart agents but are actually operated manually behind the scenes), the majority left are just meme-like and socially driven chatbots without any real technological innovation. However, at least 1-2 impressive projects will surely emerge.

This field is characterized by various waves of popularity (speculation) coming and going, with one wave after another, but this does not dampen people's enthusiasm for participation, as they only see the price increases (being dazzled by the gains). In fact, any popular narrative is the same; most people who rush in after the heat rises end up becoming bag holders.

This market has never lacked so-called hot topics (speculation). If the popularity of AI Agents declines one day, perhaps new combinations of heat like AI + DeFi will continue to take over.