Original author: 0xTodd , Partner at Nothing Research
In the past week, many friends have called me to ask about the market. I feel it is necessary to make my thoughts public and disclose my views on the current market situation - what has changed and the future course of events.
My family members who have been following me for a long time know that I am a long-term investor. Therefore, starting from 2019, I have an annual strategy that is updated every year. This is probably the one for 2024-2025, for discussion with my family members.
1. DeepSeek bursts the bubble
When DeepSeek came out, no matter whether it really took 5 million US dollars to train such an AI, the narrative is this: algorithm improvement has defeated computing power improvement at least in the short term.
Dont worry about whether this thing is true or not - since the market unanimously recognizes the 500w thing, you should treat it as true. At the end of 24 years in our crypto industry, apart from meme, I dont want to admit but objectively there is only one narrative left: AI Agent, which can be said to be the hope of the whole village. However, no one expected that AI Agent would be ruthlessly beaten by DeepSeek, which is on the real AI track next door. For example, the DS team is full of real IQ200s, fresh graduates from Peking University and Tsinghua University, and Olympic medalists.
In contrast, in our industry, we are always courting unemployed second-tier programmers and AI engineers who were fired by big companies or are secretly working on side projects. So sometimes, we are forced to have an IQ of 50. So…
On January 27, I closed all my AI token positions with tears in my eyes. I didn’t sell at the highest point, and I sold a lot of them after a big retracement. It would be a lie to say that I didn’t feel bad. But the more cruel fact is that this thing has made our entire AI Agent track a clown. This is probably true. The reason why narrative is narrated before event is because this event has not yet landed, and it can only rely on narration. Once the story can no longer be told, the decline of the track is really irreversible.
II. The President and His Mob
I don’t know how everyone feels during the Chinese New Year, but my experience is that many friends and relatives are asking how to register BN or OKX, simply because they want to buy Trumpcoin. The last time they were so crazy was during the National Day, when they wanted to open an account to invest in A-shares.
Shanghai Composite Index Trend Source: Tencent Securities
If I remember correctly, those brave warriors who entered the A-share market on October 8 are still hanging on the top of the mountain. After taking profit AI, to be honest, the more I thought about it, the more scared I became. Then I saw this post.
In summary: The president seems to be losing money, but there are two possible reasons:
1. He doesn’t make money in the way you can see;
2. He is a fool;
Anyway, I know the answer is definitely not 2. Yes! Memes are now played by the president, and he can also make money through channels unknown to us. To be fair, are the memes we play worthy of sitting at the same table with Trump? Can a hippopotamus from Thailand, a squirrel from the United States, and a bottle of longevity medicine that prolongs the life of flies really sit at the same table with Trump who is firmly in the Oval Office?
It was Chinese New Year, one table for adults and one table for children. Adults drank famous liquor, and children only drank Sprite. So, I basically sold all the memes I had that day. My meme positions had a huge floating profit, but because I took the initiative to lower my IQ to 50, I did not complete the great retreat, but kept joining the great revolution. It felt like a dream.
3. A top signal: A high school student earns tens of millions
I believe that all my family members who play meme, and even those who don’t, have heard of this recent legendary story. A high school student joined the game and sat for a month, and suddenly bet on Jelly, winning tens of millions at a very low cost.
Of course, as time went on, it became more and more outrageous and there were more and more rumors. Im not sure if its 100% true, but I know that the taste is right.
Looking back at the 1-3 days before the 69K historical peak in 2021, I was sighing:
The interns’ rate of return easily beats the fund bosses;
ENSs grassroots community contributors received tens of millions in airdrops;
At that time and moment, just like this moment.
I liked this post. A TIME editor (or a hacker) can immediately harvest countless SOLs with a fake tweet. I ask you, what does this mean?
It’s not that making money is not possible - experts can always make money, even at the bottom of a bear market. But if the subject becomes an ordinary person: interns make a lot of money, ENS contributors make a lot of money, high school students make a lot of money, and editors make a lot of money.
Meaning: [At this moment, everyones hands are particularly loose] Friends who often play cards know that they will only become loose when the floating profit is extremely high.
This represents the real peak of the greed index. This is a super top signal.
So, on the 30th, I liquidated almost all of my altcoins, leaving only BTC and a small portion of mainstream coins ETH/SOL/DOGE/exchange coins. Although there are still losses, it is still a small amount of victory. I admire Gao Gaos wonderful operation, and I also respect the market rules of this alternative investment product.
IV. Questions about BN and BN’s responses
Well, to be honest, I don’t want to talk about this topic.
As a former CEX practitioner, I have seen this consultant-listing-shipping drama too many times. From the initial anger to the gradual numbness, I have become accustomed to it.
However, in the past, this thing was placed under the table and regarded as petty corruption is the lubricant of development;
It’s like “when the water is too clear, there are no fish”, the water is slightly turbid beneath the surface, which is part of the rules of the game.
After all, we are not living in a utopia, nor in a vacuum hometown. However, the most taboo thing about this thing is to bring it from under the table to the table. I have no intention of criticizing BN or Yijie, because this thing exists in almost every CEX.
If this is put in the traditional world, it would be a huge scandal, exaggerating to say that it could cause hundreds of people to lose their jobs and dozens of people to be imprisoned. Maybe it would be better for the first sister not to respond, learn from the stars to deal with it coldly, and give retail investors some hope. However, our industry is mostly skeptical, and a huge scandal is like a heavy hammer, swinging hard on the hearts of every holder.
It shattered the faith of many people. Our industry really needs a god because it is maintained by consensus.
But when everyone discovered that the public servants under the original God actually wanted to make some quick money, their faith suddenly disappeared, and they soon projected it to the relationship with God - all the altcoins on BN are now facing huge suspicion and eyes from retail investors. Since AI and HOOK are like this, are other coins really better?
5. Future Scripts
If we follow the view of carving a boat to find a sword, this decline is very similar to the one on May 19. I suggest that everyone review the trend after May 19.
Trends after 519 in 21 years, source: Bitfinex
If we follow the script of May 19, what follows will be a repeated shock plot that will last for two months until even the most loyal people are washed out, and then a new $Bitcoin ATH will be ushered in.
Of course, some people suspect that this is the 12.4 drama, AKA the beginning of the bear market.
From my inner inclination, I hope this is 5.19. After all, the US national strategic reserve of Bitcoin is becoming clearer. Never underestimate the huge influence of this matter, really. Even if Bitcoin reaches 85K-88K, I am willing to add some more positions.
6. My position distribution
My current position:
40% BTC; 20% mainstream currencies (ETH, SOL, DOGE, BNB/MNT); 40% stablecoin investment;
Bitcoin is my eternal belief. I think I will never sell BTC and will not do short-term trading again. Reasons for keeping ETH: To be honest, the belief in ETH is weakening.
However, objectively speaking, the president’s DeFi project is buying ETH.
I don’t know how many of my family members trade U.S. stocks, and many of them regret not following the orders of [Nancy Pelosi, the Capitol Hill stock goddess].
Image source: CommonWealth Magazine
Pelosi’s highlight was once Speaker of the House of Representatives, which is only the third-ranking position in American politics.
And now Trump is the real president. This crypto president is holding a large position of ETH (although it has been deposited in the untraceable Coinbase custody). This amount should not be underestimated.
Secondly, ETH has fallen to where it is today, and I think it has reached the extreme of FUD, and there may be a thought that things will turn around when they reach the extreme. I can’t buy when no one is interested, but at least I shouldn’t sell when no one is interested.
Reasons for retaining SOL: There is a small probability of ETF; however, the cooling of AI narrative and the short-term sluggishness of MEME are two small clouds of haze.
Reasons to keep DOGE: Grayscale has already launched the Dogecoin Trust, and Doge also has a small probability ETF;
In addition, Musk is working very hard in the DOGE department. I think I can sleep well in the same car with the worlds richest man and the Director of the U.S. National Development and Reform Commission.
Reasons for retaining exchange tokens: Let’s be frank. There is no possibility for exchanges to enter a bigger stage. Coinbase will not list BNB, and Binance will not list MNT. However, exchanges are the only institutions in our industry that can make money and give profits; if the bear market really comes, exchange tokens are relatively more resistant to declines, and occasionally an IEO can make up for the losses. This is the only way to survive the bear market.
7. Cruel view: The good days of Lao Deng are over
In addition to the above, I probably won’t hold a large position in any altcoins in the short term - the reason is very simple, inflation is too fast.
The speed at which new users and new funds enter the market is simply not as fast as the speed at which these coin-issuing maniacs print coins.
Source: Decrypt
A few days ago, there was a statistic that the most powerful account on Pump Fun issued 17,000 coins in 3 months. Not 170, not 1,700, but 17,000! His contribution alone may exceed the total amount of tokens issued during the entire bull market in 2017. Why did the investment strategies of the old Dengs fail?
So many options! So many angles!
There are even N CAs for the same angle, so how can the old Dengs have a chance to copy them?
The favorite strategy of the old Dengs: Buy a mid-level altcoin at 100M or 200M. Hold it for 2-3 months and bet that it will outperform Bitcoin. However, it is now probably far from even outperforming ETH.
Marshal Ps favorite strategy: buy a project with a valuation of 10K in the inner market. He ran away after 30 minutes. A real man never looks back at the explosion. Obviously, in todays token inflation, Marshal P is far better than Lao Deng. I am not calling on everyone to become a young P general, I just hope that everyone will at least not be Lao Deng.
8. Best Position: 50% Bitcoin + 50% Stablecoin Investment
In addition, I sincerely recommend that you hold a certain amount of U to get through the next period of time. You have to accept the fact that no one can really sell at the super top.
The top of the mountain is reached every 4 years. In more than 1,000 days, you are asked to find a day to sell. The probability is 1/1000. Naturally, only a few people can do it. All of them are super lucky. At this stage, half position is the best choice. 50% of your principal is invested in financial management. We don’t talk about mining or arbitrage.
Let’s do the simplest Ethena USDE. Pendle can still give an interest rate of 18%. If you are too lazy to use Pendle, you can just put it in AAVE or mainstream CEX financial management, and you can still get 10%. The other 50% is mainly in Bitcoin, quietly waiting for the day when the US Bitcoin strategic reserve arrives.
With interest cash flow, dreams and beliefs, you will definitely feel comfortable.
Of course, you can cut out another 5% and use it for some altcoins you truly believe in, whether it is ETH, SOL, DOGE or any coin you believe in. Cut out another 5% of your funds to play PVP for fun. If you win, you can enjoy it. If you lose, just treat it as consumption and keep your hand feeling. Isnt it wonderful?
Finally, this distribution of Tai Chi diagram is formed.
PS: This is also how I want to slowly adjust my holdings. Source: 0x Todd
IX. Final
I am quite satisfied with my current position. After all, this is my 8th year in the crypto industry. I have gained some experience after so long. The only thing I regret is that I have been playing in Osaka for the past few days during the Chinese New Year. I was lazy and did not organize these thoughts and send them out in the first place.
The same strategy, if mentioned a few days ago, may help many people, but if mentioned a few days later, it becomes an afterthought. However, it is never too late to mend the fold.
I hope that every family member can get their own big results in the crypto market. Of course, if you cant get big results, then keeping some small results and earning more spiritual wealth and social wealth is also worth the trip. Finally, I wish my family members - the Year of the Snake, the golden snake dances wildly.
Todd
February 5, 2025
