Crypto Assets Market Outlook and Trend Analysis

This weekend, I have more time for reflection, and I would like to share some views on the market.

I believe that the overall directional trend of the Crypto Assets market will only become clear after September. Considering factors such as macroeconomic resistance, summer liquidity constraints, and quarter-end position adjustments, the real market dynamics may only manifest when market participants return after the August holidays. From recent market activities, the rise of most small Crypto Assets has been mainly driven by short squeezes. Traders, influenced by the reflex of the previous rebound, are chasing short-term trends, but this time there is a lack of support from long-term holders. Most investors have already suffered losses in the previous market fluctuations. As expected, the vast majority of rapidly rising tokens subsequently experienced similarly severe corrections.

Ethereum unexpectedly rebounded, with sectors that were previously hit hardest, such as artificial intelligence-related tokens, leading this round of recovery. On the other hand, tokens with practical applications, strong fundamentals, or buyback mechanisms have shown notable resilience—not only performing more steadily during the downturn but also recovering more quickly. From this, we can draw the following insights:

1. The demand for Bitcoin is sustained and real

Traditional capital is gradually entering the market through various regulated channels.

The current capital nature supporting Bitcoin is fundamentally different from previous cycles. This is why a large-scale Bitcoin sell-off is unlikely to occur unless triggered by significant macro events.

2. The internal differentiation of small Crypto Assets intensifies

Ultimately, funds will flow back into the small Crypto Assets market—but it won't be a comprehensive influx. Only those tokens that have clear use cases and practical application scenarios are likely to attract these funds. This is also why I believe Ethereum will outperform other public chains. The clarity of regulation, the growing usage of decentralized finance, the deflationary structure, and the demand for staking together create a strong positive feedback loop. Moreover, due to Ethereum's long-term failure to meet expectations, there are still potential buyers waiting on the sidelines.

3. Tokens Supported by Venture Capital Face Structural Risks

Token unlocks will continue to exert pressure on price movements. 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 tokens with overvalued valuations listed on mainstream trading platforms are not a good choice for the future. Tokens from certain ecosystems, in particular, face continuous selling pressure due to their validator reward structures that lead to this situation.

4. Meme coins have structural advantages

Meme coins have structural advantages, with no venture capital unlocking pressure, adopting a fair issuance model, 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 issuance events and the launch of related coins mark the peak of interest in meme coins. Following this, the interest in meme coins began to wane. Even during the rebound in April, the performance of certain public chains was not as good as Ethereum—if everyone has already held these tokens, when the momentum of meme coins fades, who will become the marginal buyer?

Some meme coins may still perform well, especially those that gained popularity outside of crypto assets social media, such as on short video platforms, driven by influential figures. These may still bring about asymmetric wealth effects. However, the era of "cute animal coins" as alpha has ended. Only those coins with strong narratives and broad market recognition possess real speculative value.

Ironically, the fatigue and skepticism towards venture-backed tokens have opened the door for fair launch Web2/3 projects, which will become the next wave of wealth creation opportunities.

To seize these opportunities, you need to actively participate in on-chain activities. When there is information asymmetry, significant opportunities always arise. Once everyone is aware of an opportunity, it no longer offers high returns.

This is why I pay more attention to on-chain market dynamics. The success of certain projects has sparked the desire to find the "next opportunity," and capital is beginning to chase similar fair launch narratives in small crypto assets. Just like some traders earn huge profits by trading meme coins—attention directs the flow of funds.

5. Future Market Trends

So, if meme coins are no longer the main opportunity, what will the next focus be?

My view: The combination of artificial intelligence and Crypto Assets.

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

Similar to the hype around decentralized finance, most early artificial intelligence projects failed after the initial speculation. However, truly practical projects are quietly being built during this bear market. We have already seen some of these projects emerging on-chain.

As the profits from meme coins dwindle, market attention will naturally shift to new narratives. Artificial intelligence, with its clear practicality, is well-suited to become the next hotspot.

Many projects combining artificial intelligence and Crypto Assets adopt a fair launch model, echoing the narrative mentioned earlier.

This is why I took the time to research and position myself in this field during the relatively calm weeks in the market. 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.