The market is ruthless, so are all the people who lose money innocent?
Source: Talking Outside the Lines
I remember mentioning a viewpoint in a previous article: this round of the bull market is primarily driven by ETFs, while in the altcoin space, MemeCoins have captured most of the attention, traffic, topics, and liquidity throughout the process. The launch of this year's presidential MemeCoin TRUMP seems to mark the peak of the cyclical phase for most MemeCoins from a certain perspective, as no individual or organization can have a greater and more outlandish influence and appeal than a U.S. president issuing a coin. After this, the various celebrities issuing coins are merely following suit.
Last year, I also mentioned in an article that my initial plan was to consider gradually liquidating the remaining altcoins in my holdings when TOTAL2 reached around $2 trillion. However, after President Trump started issuing coins this year, followed by First Lady Melania also issuing coins… I felt that the market seemed to be getting a bit out of hand. As shown in the figure below.
At the end of that article, my reminder was: the biggest contribution of the TRUMP token to the crypto market is creating an out-of-circle effect and a leading effect, bringing more liquidity to the market. But if you don't know where the market's liquidity comes from, then you are the one providing liquidity.
Moreover, in an article earlier this month (February 3), based on preliminary considerations of on-chain data issues, we further lowered our expectations for the new round of altcoin season (TOTAL2 market cap scale).
In fact, if we look back at the articles from the past two months, we can see that we have undergone a general psychological change regarding altcoins. However, overall, we remain more optimistic than most people: it is highly likely that this is not the end of the current bull market, but theoretically, the time left for this bull market is becoming increasingly limited, unless something happens that breaks the four-year cycle pattern, as we mentioned in the January 17 article. At this stage, we still have a positive outlook on the development of the ETH ecosystem, and we still believe there may be opportunities for an altcoin season this year, but this altcoin season may be completely different from what you imagine (or from the altcoin seasons in previous bull market cycles).
Based on some comprehensive considerations (market aspects + personal aspects), I have also been trying to modify some of my original plans and optimize my personal time and energy over the past two months. For example, in a recent article, I further shared and organized my thoughts, stating that I would consider liquidating the remaining positions in altcoins at any time. As shown in the figure below.
The market is always changing (24/7), and sometimes these changes seem ruthless yet interesting.
In recent days, market sentiment seems to have taken some new hits, especially as more and more people (including KOLs or large holders) feel that the PvP of MemeCoins is becoming a ruthless game. The LIBRA issued by the Argentine president on February 15 also exposed many to the brutality of PvP, with some even believing it to be a heist against the crypto industry.
Whether it's the Argentine president (or the team behind him) issuing coins to cut leeks, or even yesterday (February 17) when an old player with a surname containing "Zhong" directly issued coins to cut leeks, and surprisingly, many people supported it. Some even foolishly claimed that being able to buy this player's coin was a "honor for Chinese people," which is hard to understand. What is happening in this market now! While the market is ruthless, are all the people losing money innocent?
When the market seems to be on the brink of collapse, we often see a few extreme situations, such as:
1. Desperate people seeking quick fixes
A few days ago, a friend messaged me saying: "Big Dragon, didn't you say there would still be an altcoin season? Please help me, I just want to double my money back immediately. Just recommend which altcoin I should buy to double my money back, and I won't blame you for any results."
I certainly understand this friend's emotions, but this behavior is indeed a bit desperate. Perhaps this friend occasionally reads articles from Talking Outside the Lines, but it seems they haven't grasped the underlying logical thinking expressed in the articles. Just because I mentioned that there might still be opportunities for an altcoin season this year doesn't mean I can casually recommend one or several altcoins to help others recover their losses or make money. If I truly had the ability to accurately predict the market and control its ups and downs, wouldn't I just make a fortune myself and not bother writing articles or holding onto Bitcoin (which, if I held for a few years, would only yield an average return of 3-5 times)?
Additionally, a few days ago, due to the popularity of the PI coin, another friend asked me: "Can I still buy PI in OK? Please give me some operational advice."
I originally wanted to show them an article I wrote about PI in 2022, but unfortunately, I deleted it two days before OK announced it would list PI, because I no longer want to mention such projects. I don't even want to criticize them; I just don't want to have any association with that project. Maybe I'm superficial, or maybe I don't understand, but I certainly won't touch PI, let alone promote it. If someone wants to play, then it's still that old saying: use only the funds you can afford to lose. The PI project might be far larger than we imagine; perhaps the gameplay and logic of the project itself are fine, but due to the hierarchical system and the scale of over a hundred million people (many of whom are middle-aged and elderly), it cannot be ruled out that various pyramid schemes or scams are hidden within. It's like a health product that may not be harmful in terms of ingredients, but if someone uses it to establish a strict hierarchical system, serious problems may arise.
Don't rush to seek quick fixes out of desperation; the result may be that not only will you lose your life savings, but your situation may worsen. By then, it may truly be too late to turn back.
2. Silent people and various circles
I've heard that many communities have been silent in recent days, with fewer and fewer people speaking up, creating an atmosphere reminiscent of a bear market.
The main reason people are silent is that they haven't made the money they expected (or planned) in the market. For example, those who set goals two years ago to earn 10x or 100x in this bull market may have only achieved a few times' return after more than two years of messing around with altcoins, or even found themselves stuck, leading to their silence. Similarly, those who entered the market last year or this year, hoping to become rich overnight by betting everything on a certain altcoin or MemeCoin, found themselves losing everything overnight and have also become silent.
The best remedy for silence is a few big bullish candles, but unfortunately, many people have already chosen to give up or have been scared off before that. Even if there is a chance to see big bullish candles in the future, most will only continue to chase highs and get stuck. Because even after experiencing failure, most people cannot face and let go of past failures to reflect on themselves (for example, still thinking about quickly recovering losses through gambling) and cannot calm down to understand what position management and risk management are.
The constant fluctuations and oscillations in the market are meant to eliminate or bury those who are not steadfast or are blindly steadfast (for example, betting everything on an unfamiliar project and confidently claiming to be making a long-term investment without setting stop-loss or take-profit levels).
3. The few who can still make big money
Since there are people losing money in the market, there will naturally be people making money.
I remember the title of an earlier article stated: over 90% of people in the crypto market are losing money. As a result, this article received comments accusing me of creating anxiety and being alarmist. The commenter even added that entering this circle is to make big money; if over 90% of people are losing money, who would still want to play in this crypto circle?
I wonder if the commenter has achieved their goal of making big money by now. In fact, saying over 90% is already conservative; I initially wanted to write that 99% of people would lose money.
So, who is making money in this market? Everyone can think about this for themselves.
Recently, I saw a very interesting wallet address that made $10 million on Libra and over $9 million on Melania. In just the last month, this wallet has traded 660 different MemeCoins, as shown in the figure below.
As for whose wallet this is, I don't know, and I'm not sure if it's an insider's wallet. All I know is that no matter how the market performs, there will always be smart people who manage to take others' money.
At the same time, it should be noted that even such a smart wallet (or person) does not make money on every coin they trade. If you haven't considered your own position and risk tolerance, don't easily follow (copy) such smart money in trading.
Strictly speaking, the issues of buying and selling must be based on one's own position and risk tolerance. For example, some friends always like to ask me when to sell so they can reference it for their own selling. However, such answers are not very referential because everyone's holding costs, risk preferences, and target plans may differ. To put it bluntly, my buying cost for SOL is $18, and I already sold half of my SOL position when it reached $36 (even though I sold too early, I was still executing my trading discipline at that time). The remaining SOL position, I can choose to liquidate at any time without considering the cost or hold onto it indefinitely. Can you do that?
For instance, it seems that many crypto KOLs have recently shifted to the stock market (such as Hong Kong stocks) and are claiming to be making a fortune in the stock market, intending to lead their followers from the crypto circle into stock trading. You must consider your own position and risk tolerance in this context. Do you understand the gameplay of the stock market? Are you making money in the stock market by following others, or are you just giving away your money?
In summary, anyone who chooses to enter a market (stock market, crypto market, etc.) is aiming to make money. However, the essence of any financial market is to make as many people lose money as possible. Only those who leave the casino with chips in hand are the true winners. This world is always filled with various conflicts and resolutions, especially for most ordinary people, who seem to be manipulated by invisible hands while trying to find their so-called balance amidst various conflicts. The market is ruthless and cruel. In such circumstances, as ordinary people, what we should first consider or do is not to quickly break the balance to leap across classes or tiers, but to focus on a specific field or aspect, ensuring that we (or our team) can stay ahead of more people (or other teams) and ultimately leave safely with our chips.
At the end of the article, let's briefly look at some other noteworthy or interesting events from the past few days:
- Is Binance selling?
Actually, there were rumors earlier that a major exchange was going to sell. However, in recent days, due to several leading exchanges targeting each other online, the issue of Binance's potential sale has come to the forefront. Based on current information and CZ's statements, Binance is unlikely to sell outright but will probably have well-known institutions participate in Binance (i.e., Binance will sell some equity to other institutions). As shown in the figure below.
- Anonymous users and brain-machine chips
An anonymous programmer, suspected to be from China, has destroyed over 600 ETH, donated about 1,950 ETH, and left mysterious messages about mind control and brain-machine chips in the related transaction records. As shown in the figure below.
This matter may be sensitive, so we will just touch on it briefly. Interested friends can search for more information on Google.
- HKD-backed stablecoin is coming
Standard Chartered Bank's Hong Kong subsidiary, Animoca Brands, and telecommunications company HKT have teamed up to establish a joint venture to issue a stablecoin pegged to the Hong Kong dollar. As shown in the figure below.
Hong Kong is relatively advanced in the crypto space; in December last year (2024), it enacted the "Stablecoin Act," and now some institutions are planning to issue stablecoins pegged to the Hong Kong dollar. However, this is unlikely to have a significant positive impact on the current market situation; the market mainly still depends on U.S. policies. Additionally, just because Hong Kong has legalized it doesn't mean that the mainland will open up or provide legal support for crypto; these are completely different matters.
- Negative sentiment for SOL
Solana, which has been riding high on the narrative of MemeCoins, seems to be experiencing some negative sentiment in recent days. As of the writing of this article, SOL's price has dropped to around $160, with a nearly 20% decline over the past week. As shown in the figure below.
Looking back over the past year, we can see that SOL has experienced similar negative sentiment about three times: once during the network congestion incident on April 6 last year (when Solana recorded an astonishing TPS of 1,504), once during the institutional/whale sell-off on August 31 last year (when institutions were estimated to have sold $19.5 million worth of SOL), and then starting from February 15 due to the Libra incident (along with a large unlocking event, where 11.2 million SOL will be unlocked on March 1), leading to negative sentiment.
Logically, negative sentiment for SOL should directly benefit ETH. However, ETH seems to have stalled around $2,800 and has returned to around $2,600. Although some MemeCoins seem to want to replicate some of Solana's success stories on Ethereum, it currently appears that Base is more suitable as a launchpad for MemeCoins.
- The quietly surging OM
While everyone is busy with PvP and feeling disheartened by MemeCoins, someone suddenly discovered that the previously overlooked MANTRA (OM) has quietly surged over 400 times since the start of this round of market (October 2023). As shown in the figure below.
MANTRA is a project in the RWA concept, with a team based in Hong Kong, and can be simply understood as an L1 project in the RWA field. In fact, the OM token was launched in 2020, but they only secured $11 million in funding in March 2024 and launched their mainnet in October 2024. This project has certainly caught the tailwind of the RWA concept. Of course, some say it is just a public chain funding scheme disguised as RWA. We won't analyze or evaluate the project's quality here, but in terms of price speculation and performance, it is indeed a project with a very high increase.
However, it is best not to chase the price now, as no one knows when the reaper's scythe will start to harvest. This is just to illustrate that no matter how bad the market is, there will always be someone who becomes a big winner and finds a gem. This OM project, which has rarely been promoted or hyped by KOLs, has managed to rise 400 times, which seems worth reflecting on for all those eager to follow KOLs in pursuit of hundredfold coins.
Here are some other updates:
KAITO announced on February 17 that it has completed the KAITO Yaps snapshot, and the airdrop is coming soon. The project has deployed 1 billion tokens on the Base chain, with an estimated 33.3% allocated for airdrops.
On February 17, Binance launched a community vote to decide whether to list the Pi token. It appears to be user-driven on the surface, but in reality, Binance doesn't want to miss out on this wave of traffic, once again lowering its bottom line.
FTX began repaying $16 billion to creditors on February 18, with the first phase set to repay $6.5 to $7 billion. I wonder what those receiving cash compensation will choose to buy next?
On February 18, Circle minted another 250 million USDC on Solana. The market cap of stablecoins continues to reach new highs, and as of the writing of this article, it has reached a scale of $225 billion. The money in the market is increasing, but the money in many retail investors' hands is decreasing. As shown in the figure below.
Ton will become the exclusive blockchain platform for Telegram mini-programs starting February 21, and TON and Telegram seem to be completing their integration.
MultiversX (EGLD), which just completed a network upgrade earlier this month, may launch new AI products by the end of this month or next month.
Musk confirmed that xAI will establish an AI game studio to develop games. Will the AI+Game concept become the next hot topic?
Monad announced that its testnet will go live on February 19, with the mainnet expected to launch in the second quarter of this year. The project completed $225 million in funding last year and is one of the more talked-about projects recently. Various projects are still accelerating towards TGE; will there be new market movements in the second quarter? Will there still be enough retail investors left by then?
That's all for today.
