Source: Talk Li Talk Outside
Today is the fourth day of the Lunar New Year. I originally wanted to go to the Temple Fair at the Temple of Earth or Chaoyang Park, but I think it might not be that interesting, so I'll just chat with everyone about the market these days.
Coincidentally, yesterday was also Vitalik Buterin's birthday (January 31, 1994), and I found that the group members have been discussing ETH topics quite a lot, of course not to celebrate Vitalik's birthday. Due to the price performance of ETH, the way people refer to the Ethereum founder has also changed: Vitalik - V-boy - V-dog - V-dog.
For a period of time, many people have been FUDing Ethereum, and "Ethereum" seems to have become "Ethereum pit". The most recent backstage messages are still mainly about ETH prices, such as some members asking: I can't hold on anymore, should I switch ETH to SOL? And some members will ask: How high do you think the ETH price can go?...
From my personal experience, many members seem to dislike reading articles, and instead prefer to ask all kinds of questions right away, hoping to get corresponding effective solutions. In fact, if you read the articles of Talk Li Talk Outside frequently, you will know that we have always been quite optimistic about the long-term development of Ethereum.
Let me give a few examples of recent articles:
In the article on January 14, we mentioned: I am still optimistic about Ethereum in the long run. After all, ETH is the only cryptocurrency other than BTC that has passed the spot ETF. Maybe we still need to be a little patient with Ethereum. Currently, ETH is still the second largest after BTC, and as long as Ethereum can find a new balance point in L2 expansion and other narrative waves, the price will not be a problem, let the bullets fly a little longer.
In the article on January 16, we mentioned: If the Trump administration can introduce some policies that are favorable to cryptocurrencies, it may give the crypto market further prosperity. At the same time, if Staking is allowed in regulation this year, it will be a good boost to the currently sluggish ETH, and DeFi will also be further revived and developed.
In the article on January 21, we mentioned: We remain optimistic about Ethereum's performance, and $4,000 is likely not the end of this ETH bull market.
Of course, if you still don't know how to make a choice, there is a simplest way, just hold both ETH and SOL, kids do choice questions, adults should take it all, provided that you control the proportion of capital allocation according to your own position and risk preference.
Many people like to make comparisons, such as directly comparing their earning ability with others, seeing someone make a few million dollars a day playing on-chain memes and thinking they can do it too. Or some people like to directly compare the price increases of two projects (tokens), thinking that the one with a bigger increase is a good project and the one with a smaller increase is a shit coin.
If we just compare ETH and SOL, in terms of investment return and relative valuation, ETH is indeed lagging behind SOL quite a bit. As shown in the figure below.
And in this cycle, ETH has only increased about 4 times from around $800, while SOL has increased about 30 times from around $8.
But is SOL really better than ETH?
Strictly speaking, both ETH and SOL are not perfect. In terms of speed, SOL is faster than ETH, and in terms of fees, SOL is cheaper than ETH, but in terms of security and stability, ETH is better than SOL.
The on-chain activity and transaction volume of SOL are indeed quite good at the moment, and new projects are exploding like bamboo shoots after the rain, especially the MEME coin projects (tokens), but if you can monitor them carefully, you should be able to find that many of the projects deployed on the SOL chain may announce their death or go to zero in just a few days or weeks. Now to make big money on this chain is simply a high-end PVP final.
Although there are similar situations on the ETH chain, the situation is relatively mild.
The development of things always has a stage, we can't just look at the high tide and ignore the mess that may appear after the high tide. For projects that want to develop in the long run and pursue stable operation, ETH is still the best choice at the moment.
It's still the same old saying, mainly look at whether you want to speculate or invest, look at whether you want to make quick money or slow money. If you like speculation, you can certainly participate in all kinds of on-chain PVP competitions, see who gets in early and runs fast. But if you are pursuing a longer-term investment result, you should not just focus on the current price, as long as the fundamentals of the corresponding project are still there, just hold on and wait for the opportunity.
Or, if you still don't know what to do, you can take a look at what WorldLibertyFi (WLFI), which is supported by the Trump family, is doing: from the monitoring of the public wallet address, WLFI has also been buying ETH recently, and they currently hold about 50% ETH in their portfolio. As shown in the figure below.
If you think WLFI is not enough, then take a look at BlackRock (Blackrock), they are said to have bought another 24,529 Ethereum today (February 1). As shown in the figure below.
You don't like ETH, but institutions like WLFI and BlackRock are buying, buying, buying. You always think BTC is too expensive and don't want to buy it, but MicroStrategy has been buying, buying, buying, as shown in the figure below.
In short, the big legs of institutions are not being embraced, but you have to go and listen to the opinions of some bloggers or KOLs on the internet and go All In on those shit coins or on-chain memes that you don't understand at all, and then lose money/go to zero, and then attribute it to bad luck or not running fast enough, what else can we say?
Recently, various institutions and celebrities have been launching their own MEME coins, especially TRUMP, which seems to have become a topic of discussion on many elderly people's dinner tables during the Spring Festival. On the one hand, this may mean that a lot of elderly people will come in and lose their savings and retirement money, on the other hand, this is a good thing for the crypto market, as it means more liquidity injection.
As of the time of writing this article, the total market value of crypto stablecoins has exceeded $206 billion, especially since Trump's victory announcement (November 2024), it has increased by $38 billion. From this perspective, the current market is still overall healthy, indicating that capital is still flowing into the crypto market.
From the market perspective, we will continue to maintain the positive views expressed in previous articles, and remain optimistic about the overall performance and potential opportunities this year, but higher positions also mean greater risks. It's not a bear market now, but we need to prepare for the bear market in advance, just as we have already prepared for the new round of bull market in 2022. We have tentatively planned to start considering a new cycle of scheduled investment plan in 2026.
Any transaction carries a certain degree of risk, and there is no 100% guaranteed way to make money in the investment field. We can only continuously optimize our strategies to increase our chances of making money (win rate). At the same time, we must also consider the possibility of losing money. For example, before making any moves, I habitually make two plans (Plan A and Plan B) - if I make money, I can hold on to it, and if I lose money, I can afford the loss. This is what is called proper position and risk management. The most difficult part of a bull market is not making money, but holding on to it.
Also, let's not forget the phrase we've repeated N times in our previous articles - for most people, the two basic principles of investing are: preserve the principal and don't touch what you don't understand.
Finally, let's briefly review some of the more noteworthy or interesting events of the past few days:
- The Federal Reserve kept interest rates unchanged at 4.25%-4.50%, suggesting the first rate cut this year may come as early as June.
- Venice (a private, uncensored AI project) announced that it will airdrop 25% of the VVV token supply to holders of major AI protocols like Virtuals and Aixbt. Apparently, some partners have received a whole pig's foot, so it seems that trying out some new things can pay off unexpectedly.
- Jupiter announced a large-scale buyback program for the JUP token, with 50% of the protocol fees used to purchase JUP. This is good news for JUP holders, as it has already been reflected in the token's price performance.
- Pump Fun is facing a class-action lawsuit (filed in the U.S. District Court for the Southern District of New York) for allegedly selling unregistered securities, with investors who lost money on MemeCoin seeking to sue the platform for creating tokens that violate securities laws. Pump Fun has collected nearly $500 million in trading fees in just over a year, so it seems the bigger they are, the harder they fall.
- Grayscale has filed an application with the New York Stock Exchange for an XRP ETF.
- Tether (the issuer of USDT) released its Q4 2024 proof-of-reserves report, showing a profit of $13.7 billion last year. This is what it means to "make money while lying down".
- Reportedly, the parents of SBF (who once led the FTX and SOL explosion) are seeking a pardon from President Trump for their son. Imagine the scene: after his release, SBF quietly pulls out his long-hidden SOL, laughs out loud, and mutters to himself, "CZ, I'm going to destroy you."
- European Central Bank President Christine Lagarde stated that BTC will not be included in the reserves of EU member states, citing concerns about Bitcoin's liquidity, security, and regulation. How should we interpret this? Could it be that "no" means "yes" when a woman says it?
- The Czech Republic Central Bank is considering a proposal to invest $7 billion in BTC as a reserve asset.
- MicroStrategy has raised $563.4 million through Perpetual Strike Preferred Stock, indicating they will continue to purchase more BTC.
- MetaPlanet, a Japanese company emulating MicroStrategy, has issued 21 million stock options, raising 116 billion yen (about $747 million) to buy Bitcoin, which will be the largest Bitcoin purchase in Asian stock market history.
- Swarms (a token that has joined the 10th batch of Binance Alpha projects) has posted on the X platform stating that the team currently only holds 2% of the tokens, and they are proposing to increase the team's holdings to 10%. Haha, haha, haha...
Okay, that's all for today.
