In the past week, many friends have called me to inquire about the market situation, and I feel it is necessary to publicly share my thoughts and disclose my views on the current market situation--
【What has changed】
【The future process】
Those who have been following me for a long time know that I am a long-term investor. So, since 2019, I have had an annual strategy that is updated every year, and 2024-2025 is probably this one, for sharing and discussing with my family.
I. DeepSeek has burst the bubble
When DeepSeek came out, you don't have to worry whether it really used $5 million to train this AI, but the narrative is like this: 【Algorithm Improvement】 has at least defeated 【Computing Power Improvement】 in the short term.
You don't have to dwell on whether this thing is real - since the market unanimously recognizes the $5 million, you have to take it as true.
By the end of 2024 in the Altcoin industry, apart from meme, I am reluctant to admit but objectively there is only one narrative left: AI Agent, which is the hope of the whole village.
However, no one expected that the AI Agent would be ruthlessly crushed by DeepSeek from the neighboring true AI track.
Like the DS team, they are all real IQ200, fresh graduates from Tsinghua and Peking University, with math olympiad medals.
In contrast, the ones we worship in this industry are second-tier programmers who stay at home, AI engineers who were fired from big companies or secretly do side businesses, so sometimes we are forced to have an IQ of 50.
So...
On January 27th, I tearfully took profit on all my AI token positions, didn't sell at the highest point, and had to take a big drawdown, it's not true that I don't feel hurt.
But the colder fact is that this thing has turned our entire AI Agent track into a joke, and this is probably true.
The reason why "narrative" comes before "event" is that this "event" has not yet materialized, and can only rely on "narrative". Once the story can no longer be told, the decline of the track will be irreversible.
II. The President and the President's Mob
I don't know how everyone felt during the Chinese New Year, but my physical experience is that many relatives and friends are asking how to register on BN or OKX, because they want to buy Trump coins.
The last time they were this crazy was during the National Day, when they wanted to open accounts and rush into the A-shares.
Shanghai Composite Index trend Source: Tencent Securities
If I'm not mistaken, those brave warriors who entered the A-shares on October 8th are still hanging on that mountain top.
After taking profit on AI, to be honest, I'm getting more and more scared, and then I saw this post.
Roughly: The president seems to be losing a lot, but for two possible reasons:
1. He doesn't make money through the ways you can see
2. He's an idiot
Anyway, I know the answer can't possibly be 2.
Yes! meme has now become what the president is playing with, and he can also make money through channels that are unknown to us.
Frankly, can our meme players sit at the same table as Trump?
A Thai hippopotamus, an American squirrel, a longevity drug that extends the life of flies, can they really sit at the same table as Trump, who sits in the Oval Office?
It's Chinese New Year, adults at one table, kids at another.
Adults drink fine wine, kids can only drink Sprite.
So on that day, I also basically sold off my meme positions. My meme position used to have huge unrealized gains, but because I actively lowered my IQ to 50, I didn't complete the great retreat, but kept joining the great revolution.
It feels like a dream.
III. A Top Signal: A High School Boy Earns Millions
I believe that all the families who play meme, and even those who don't play meme, have heard about this legendary story recently.
A high school boy, after joining and sitting still for a month, suddenly hit Jelly, and with a very low cost, he made a big bet and won millions.
Of course, the story gets more and more exaggerated as it spreads, and there are more and more rumors, I'm not 100% sure this is true, but I know the taste is right.
Looking back at the 69K historical top in 2021, 1-3 days before, I was sighing:
-Intern, easily outperforming fund managers
-ENS grassroots community contributors, getting airdrops worth millions
At that time
Just like
Now
I liked this tweet, a TIME editor (or maybe a hacker) can immediately harvest countless SOL just by a fake tweet.
What does this mean?
It's not that making money is wrong - masters can always make money, even at the bottom of a bear market.
But if the subject becomes ordinary people:
Intern making big money, ENS contributor making big money, high school boy making big money, editor making big money.
It means: 【At this moment, everyone's hands are very loose】
Friends who play cards often know that it's only when the unrealized gains are extremely high that they become loose-handed.
This represents the greed index reaching a true peak.
This is a super top signal.
So on the 30th, I cleared out almost all my Altcoins, only keeping BTC and a small portion of mainstream coins ETH/SOL/DOGE/exchange coins.
Although there are still losses, at least I have left some victory fruits.
I admire the brilliant operation of the high school boy, and I also revere the market law of this alternative investment.
IV. Doubts about BN and BN's Response
Sigh, to be honest, I don't want to talk about this topic.
As a former CEX practitioner, I have seen this advisor-listing-dumping routine too many times, from the initial anger to the subsequent numbness, I have become accustomed to it.
However, in the past, this thing was placed under the table, belonging to "small greed and small corruption are the lubricants of development";
it belongs to "when the water is clear, there are no fish", the water surface is slightly turbid, which is part of the game rules.
After all, we are not living in a utopia, not living in a vacuum homeland.
But the thing that is most taboo is to take it from under the table and put it on the table.
I have no intention of criticizing BN or the elder sister, because this thing exists in almost every CEX.
If this were in the traditional world, to exaggerate, it would be a huge scandal that could immediately lay off hundreds of people and dozens of people in shackles.
Perhaps the elder sister would be better off not responding, learning from the stars to do cold treatment, and giving the retail investors a little hope.
But our industry is already dominated by skeptics, and a huge scandal is a heavy blow, ruthlessly swinging at the hearts of every holder.
It has shattered the faith of many people.
Our industry really needs "gods" because it is sustained by consensus.
But when everyone finds out that the public servants under the "gods" also want to make some quick money, the faith suddenly vanishes, and it is quickly projected onto the gods-related - all the Altcoins on BN are now facing a huge skepticism and attention from retail investors. If AI and HOOK are like this, will the other coins really be better?
V. The Future Script
If we follow the "clinging to the sword in the boat" view, this drop is very similar to 5.19, and I suggest everyone review the trend after 5.19 themselves.
The trend after 5.19 in 2021, source: Bitfinex
If following the 5.19 script, the next will be a repeated and sustained two-month volatility drama, until the most loyal people are also washed off, then a new $Bitcoin ATH will come.
Of course, some people also suspect this is the 12.4 script, AKA the beginning of the bear market.
From my inner tendency, I hope this is 5.19.
After all, the matter of Bitcoin as the US national strategic reserve is moving towards clarity, and you should never underestimate the huge impact of this.
Even if Bitcoin reaches 85K-88K, I would still be willing to add some more positions.
VI. My Position Distribution
My current positions:
40% BTC
20% mainstream coins (ETH, SOL, Doge, BNB/MNT)
40% stablecoin finance
Bitcoin is my eternal faith, I think I will never sell BTC again, nor will I do any more swing trading.
The reason for keeping ETH:
To be honest, my faith in ETH is weakening.
However, objectively speaking, the President's DeFi project is buying ETH.
I don't know how many of you family members are trading US stocks, many people regret not following [Nancy Pelosi, the Goddess of Congress Stocks].
Source: CommonWealth Magazine
Pelosi's heyday was as Speaker of the House, which is only the third in line in the US political arena.
And now Trump is the legitimate President, this Crypto President is holding a large position in ETH (although he has already deposited it into the untraceable Coinbase custody), this weight is not to be underestimated.
Secondly, ETH has fallen to its current position, I feel it has reached the extreme of FUD, and there may be a reaction of extremes. I can't do it when no one cares, at least don't sell when no one cares.
The reason for keeping SOL:
There is a small probability that there may be an ETF;
But the cooling of the AI narrative and the short-term sluggishness of MEME are two small clouds.
The reason for keeping Doge:
Grayscale has already launched a Dogecoin trust, Doge also has a small probability of an ETF
In addition, Musk, is working hard in the D.O.G.E department;
Being on the same car with the world's richest man and the "US Reform Commission director", I think I can sleep well.
The reason for keeping exchange tokens:
To be blunt, exchanges have no chance of getting on a bigger stage.
Coinbase will not list BNB, and Binance will not list MNT.
But exchanges are the only institutions in our industry that can make money and give back;
If the bear market really comes, exchange tokens will be relatively more resistant to declines, and the occasional IEO can also recover some blood, relying on this to get through the bear market.
VII. Cruel View: The Good Days of the Old Timers Are Over
Except for the above, I will most likely not hold any Altcoins in a large position in the short term - the reason is also very simple, inflation is too fast.
The speed of new users and new capital entering the market is simply no match for the speed at which these coin minting maniacs are printing.
Source: Decrypt
A few days ago, there was a statistic that the best account on pump fun had issued 17,000 coins in 3 months.
It's not 170, not 1,700, but 17,000! His contribution alone may exceed the total issuance of tokens in the entire 2017 bull market.
Why has the investment strategy of the old timers become ineffective?
Too many choices!
Too many angles!
Even the same angle has N CAs,
How can the old timers' Altcoins compete?
The favorite strategy of the old timers: buy an Altcoin at the $100M, $200M position.
Hold it for 2-3 months, bet on it outperforming Bitcoin.
However, now it may not even be able to outperform ETH.
And General P's favorite strategy: buy a $10K valuation project on the internal market.
Run away in 30 minutes.
Real men never look back at the explosion.
Obviously, in the era of token hyperinflation, General P is far superior to the old timers.
I don't urge everyone to become a P warrior, I just hope that at least everyone won't be an old timer.
VIII. Best Position: 50% BTC + 50% Stablecoin Finance
In addition, I sincerely advise everyone to hold a certain amount of U to get through the coming period.
You have to accept the fact that no one can really sell at the super top.
The top 1 in 1,000 can do it, and they are all super lucky.
At this stage, a half-position is the best choice.
You invest 50% of your principal in wealth management, and we won't talk about mining or arbitrage.
We just do the simplest Ethena USDE, and now Pendle can still offer an 18% interest rate.
If you're too lazy to mess with Pendle, just throw it into AAVE or mainstream CEX wealth management, and you'll still have 10%.
The other 50% is mainly in Bit, quietly waiting for the day when the US Bit strategic reserve arrives.
You have both interest cash flow,
and dreams and beliefs,
You must be comfortable,
Packed.
Of course, you can also cut out 5% to allocate a little to the Altcoins you truly believe in, whether it's ETH, SOL, Doge or any other faith coin.
Cut out 5% of the funds to PVP a couple of times, win with style, and lose it as consumption, keeping your hand in, isn't that great?
Finally, form this Yin-Yang distribution.
PS: This is also the shape I want to slowly shape my own portfolio into Source: 0xTodd
IX. Finally
I'm quite satisfied with my current position, after all, this is my 8th year in the crypto industry, and after so much precipitation, I do have some experience.
The only thing I regret a little is that I've been playing in Osaka these past few days, being lazy, and didn't put these thoughts together and send them out right away.
The same strategy, if I had said it a few days ago, might have helped a lot of people, but a few days later it becomes a post-mortem.
But it's not too late to make up for the lost sheep.
I hope that every family can get their own big results in the crypto market.
Of course, if you can't get the big results, then keep some small results, earn more spiritual wealth and social wealth, it's not in vain.
Finally, wish the family - Snake Year, the golden snake dancing wildly.
Todd
February 5, 2025
