Crypto Assets Market Outlook and Investment Strategy Analysis

Recently, I have had more time to think, and I would like to share some views on the market.

I believe that the overall trend of the Crypto Assets market will only become clear after September. Considering factors such as macroeconomic resistance, limited summer liquidity, and quarterly position adjustments, the true market direction will only be revealed when participants return after the August holidays. Recent market activities show that the rise of most small coins is mainly due to short squeezes. Traders, influenced by previous rebounds, are chasing momentum but lack support from long-term holders. Most people have already suffered heavy losses in the previous market. As expected, most tokens that surged sharply later experienced a decline of equal magnitude.

Ethereum unexpectedly rebounded, with previously hard-hit sectors, such as artificial intelligence and some popular coins, leading this rally. In contrast, tokens with real applications, solid fundamentals, or buyback mechanisms exhibited stronger resilience — performing more steadily during downturns and recovering more quickly. From this, we can draw the following insights:

1. The demand for Bitcoin remains solid and persistent

Traditional capital is gradually entering the market through regulated channels such as ETFs.

The capital nature that currently supports Bitcoin is vastly different from previous cycles. This is also why large-scale Bitcoin liquidations are unlikely to occur unless impacted by significant macro events.

2. The internal differentiation of small coins intensifies

Ultimately, the funds will flow back to the small coin market— but it won't be comprehensive. Only those tokens with clear use cases and practical application scenarios are likely to attract this capital. This is why I believe Ethereum's performance will outperform other public chains. Regulatory clarity, the growing DeFi adoption rate, deflationary structure, and staking demand together create a strong positive cycle. Moreover, due to Ethereum's long-term failure to meet expectations, there are still potential buyers waiting on the sidelines.

3. Venture-backed tokens face structural risks

Token unlocks will continue to exert pressure on prices. In the case of insufficient liquidity, the ongoing selling pressure from validators and early investors limits the upside potential. This is why I believe that highly valued tokens listed on centralized exchanges are not an ideal choice for the future. Tokens from certain ecosystems are particularly facing ongoing selling pressure due to their validator reward structures that lead to this situation.

4. Popular coins have structural advantages

These types of coins usually do not have venture capital unlocking issues, adopt fair issuance, and are entirely based on attention. This is a purely speculative mechanism – just like in the early cycles, it has worked.

But I think this stage is coming to an end.

Recent token generation events and the launch of popular coins mark the peak of interest in this type of coin. Since then, people’s interest in these coins has begun to wane. Even during the rebound in April, the performance of certain public chains was not as good as Ethereum—if everyone already holds them, who will be the marginal buyer when the hype fades away?

Some popular coins may still perform well, especially those that have gained popularity through influential figures on other platforms outside the Crypto Assets social circle. These may still bring asymmetric wealth effects. However, the era of "cute animal coins" as investment opportunities has ended. Only those coins with strong narratives and deep market understanding have true speculative value.

5. Future Market Trends

So, if the popular coins are no longer the main opportunity, what will come next?

My point of view is: the combination of artificial intelligence and Crypto Assets.

If you have been following my updates, you will know that most of my operations during this cycle—after early investments in certain public chains and venture-backed tokens—have focused on popular coins and AI.

Just like the DeFi summer, most early AI projects failed after the hype. However, projects that are truly based on practicality are quietly being built during this bear market. We have already seen some of these projects emerging on the chain.

As the profits from popular coins dwindle, people's attention will naturally turn to new narratives. AI, with its clear practicality, is well-suited to become the next focal point.

Many AI x Crypto Assets projects adopt fair issuance, echoing the narrative of recent successful projects.

This is why I have been spending time researching and positioning myself in this field during the relatively calm market recently. There is no need to rush into building a full position right now— but I believe that if the market experiences a strong rally again, this field will hold the greatest asymmetric opportunities.