I. Evolution of Investor Strategies in the Crypto Market: From Diamond Hands to Agile Trading
Since its inception, the crypto market has been known for its extreme volatility, which once brought significant wealth effects to early investors. However, as the market continues to develop and mature, this characteristic is no longer merely an opportunity but more like a double-edged sword. The past simple strategy—buying altcoins at low prices and holding them long-term, waiting for the bull market peak to profit—has become unsuitable in today's complex and dynamic market environment. The current crypto market resembles a "huge casino" filled with uncertainty and competition, where investors need unprecedented sharp insight and quick adaptability to establish themselves in this game.
Unlike the early market, which centered around narratives of "store of value" and "decentralized vision," today's cryptocurrency ecosystem has become more diversified and fragmented. In recent years, emerging fields have proliferated, from meme coins (like Dogecoin and Trump Coin) to the on-chainization of real-world assets (RWA), from the combination of artificial intelligence (AI) and blockchain to the ever-evolving DeFi (decentralized finance) applications, and to the art, gaming, and practical scenarios of NFTs (non-fungible tokens). Each field is vying for investors' attention and capital. This diversified ecosystem brings more opportunities but also makes the market more complex and unpredictable.
For example, at the beginning of 2025, the presidential meme coin launched by U.S. President Trump before officially taking office attracted a large influx of new users into the market, becoming a hot topic in a short period. However, this explosive attention also caused a "vampiric effect" on many traditional altcoins, leading to a significant shrinkage in their market capitalization. Another typical example is the launch of Berachain, which attracted massive capital inflow but impacted the Abstract ecosystem. After countless market trials, investors realized that in such a dynamic and unpredictable market, the wisest approach is to accept volatility as the norm. With the continuous emergence of new coins, new chains, and new projects, this volatility may further intensify.
In this context, investors have had to readjust their strategies; some choose to increase their holdings of Bitcoin (BTC) and stablecoins to hedge against market risks, while others prefer to seize market volatility opportunities through short-term trading.
The current cryptocurrency cycle is filled with unprecedented challenges, primarily due to a stronger sense of uncertainty permeating the market. This uncertainty mainly stems from the fact that even popular altcoins, after experiencing significant declines, do not inspire enough confidence among investors to confirm that they will rebound.
In past market cycles (such as 2017 and 2021), investors were usually confident about the downturns of altcoins, believing that these coins would regain value as the market cycle recovered. Many early attention-grabbing coins often maintained their market positions until the cycle ended. However, the performance of this cycle is entirely different. The narratives in the market have become more short-lived and fragmented, and investors' confidence in "buying the dip" has significantly weakened. The narrative of a coin can collapse in a short time, leading to its value rapidly dropping to zero. This phenomenon has made investors more cautious, realizing that relying solely on narratives or market sentiment is no longer sufficient to support long-term investment decisions.
This shift also reflects a change in the mindset of market participants: from the past "diamond hands" (referring to investors who hold onto their assets despite market volatility and sharp price declines) to a more pragmatic "opportunistic" approach. Investors' goals are no longer to find the next "1000x coin," but to seek stable returns through flexible trading strategies in a highly volatile market.
II. Market Fragmentation and the Rise of Small Cycles
Why has the crypto market undergone such significant changes? What are the underlying market reasons?
Unlike previous cycles, the current cryptocurrency market has exhibited a high degree of fragmentation, no longer dominated by a single narrative or trend. Mainstream assets like Bitcoin (BTC) and Ethereum (ETH) remain "safe havens" in the eyes of many investors, especially during market turmoil, as their stability and relatively mature ecosystems attract substantial capital. However, the growth potential of these mainstream assets has significantly weakened, making it difficult to meet the demands of investors seeking high multiples of returns. As a result, market attention has gradually shifted to more emerging fields and hot narratives, giving rise to multiple independent small cycles.
These small cycles often revolve around a popular narrative and quickly attract market attention. For example, in the fourth quarter of 2024, AI concept tokens sparked a sensational market frenzy. Driven by the rapid development of AI technology, these tokens attracted a massive influx of capital in a short time, with many projects reaching historical highs in a very short period. However, as the narrative gradually cooled, market enthusiasm quickly faded, and the prices of the vast majority of projects significantly retreated from their peaks, even losing investors' attention entirely.
Similar situations have frequently occurred in other fields. For instance, the GameFi and NFT markets were highly sought after in previous cycles but now face the same predicament. Many projects that were once considered "revolutionary" struggle to maintain sustained user growth and market heat, ultimately stagnating or even declining. Various phenomena indicate that market fragmentation is reflected not only in the diversity of narratives but also in the rapid switching of hot topics and the shortening of their life cycles.
This fragmented market environment presents investors with two main challenges:
How to identify genuinely promising emerging trends: The life cycle of market hot topics is becoming increasingly short, requiring investors to possess higher sensitivity to capture these opportunities.
How to manage investment risks: A seemingly promising project may collapse within days, necessitating more cautious position management strategies for investors.
Additionally, the rise of small cycles also means that market liquidity is being dispersed across multiple fields. For instance, for a period, capital may concentrate in the meme coin market, while in the next phase, it may shift to AI-related tokens. This rapid change in capital flow further exacerbates market volatility, forcing investors to continuously adjust their strategies to adapt to the new environment.
III. The Rise of Meme Coins: From Entertainment to Mainstream
In this fragmented and rapidly changing market context, the rise of meme coins has become a thought-provoking phenomenon. As one of the most entertaining, viral, and controversial asset classes in the crypto market, meme coins were initially just extensions sparked by meme culture or jokes, and many viewed them as synonymous with "speculative bubbles." However, as the market continues to evolve, meme coins have transformed from mere jokes into a market worth tens of billions of dollars, becoming an indispensable part of the cryptocurrency ecosystem by 2025.
Two key factors underpin the success of meme coins:
Strong community drive: Meme coins typically rely on vibrant communities that drive up coin prices through social media, viral marketing, and collective action. The high interaction and cohesion among community members enable meme coins to attract significant attention in a short time and form a strong market influence.
Brand fun and emotional resonance: Many meme coins establish emotional connections with investors through humor, satire, or cultural symbols. This emotional resonance not only enhances investors' sense of identity with the project but also allows meme coins to stand out in the market, attracting a large number of loyal fans. For example, certain meme coins reflect social hot topics in a humorous way, even becoming a cultural phenomenon.
Specifically, here are some representative cases of meme coins:
Dogecoin (DOGE): As the pioneer of meme coins, DOGE features a Shiba Inu as its mascot and has established an ecosystem filled with charitable spirit and tipping culture.
Shiba Inu (SHIB): Through ShibaSwap and multiple supplementary tokens, SHIB has developed into a massive ecosystem.
Floki Inu (FLOKI): Named after Elon Musk's pet Shiba Inu "Floki," this meme coin rapidly rose to prominence thanks to Musk's influence and widespread community support, attempting to break the traditional limitations of meme coins by launching practical features (such as FlokiFi and educational platforms).
PEPE Meme Coin: Themed around the classic "Pepe the Frog" internet meme, this meme coin gained market support through emotional resonance with early internet culture. Baby Doge Coin (BabyDoge): As a "descendant" of Dogecoin, BabyDoge attracted a large number of novice investors through low barriers to entry and highly entertaining marketing strategies.
TRUMP Meme Coin: The meme coin themed around Trump attracted significant attention due to its controversial nature.
The Fusion of AI and Meme Coin Ecosystems: A New Collision of Technology and Culture
In recent years, the meme coin ecosystem has begun to integrate with AI (artificial intelligence) and other emerging trends, giving rise to a new batch of conceptual tokens. These tokens not only continue the entertainment aspect of meme coins but also infuse them with more practical value and narrative dimensions through technological and cultural innovation, injecting new vitality into the cryptocurrency field.
AI16Z: The First AI-Operated DAO Token, Managed by Marc Andreessen's AI Mimicker @pmairca. Currently, the creators of ai16z have announced plans to develop ai16z into a Layer 1 for AI agents.
Fartcoin (FART): A meme coin that combines artificial intelligence with meme culture, its uniqueness lies in its NFT ecosystem, where users can generate NFTs with a "breeding" mechanism and unique themed NFTs, similar to the early "CryptoKitties." Additionally, the Fartcoin community enhances interactivity by hosting meme contests and green initiatives (such as tree-planting programs linked to token minting).
GOAT (Goatseus Maximus): A meme coin accidentally birthed from an AI-driven creative experiment, this project gained popularity through the autonomous promotion of the AI robot Truth Terminal. Truth Terminal is a meme dissemination experimental project developed by Andy Ayrey and supported by the venture capital firm Andreessen Horowitz (a16z).
PIPPIN: The story of this token blends creativity, technology, and community spirit. Initially, this AI-generated unicorn image was named "Pippin" by ChatGPT, later evolving into a meme coin on the Solana blockchain. This inspiration led creator Yohei to create his first Solana wallet, acquire tokens, and develop Pippin into an AI-driven virtual influencer. The Pippin community continues to grow by sharing creative content and participating in community activities, becoming another innovative case of the intersection between blockchain and AI.
The emergence of these meme coins indicates that the market is continuously innovating, combining cryptocurrencies with other fields (such as artificial intelligence and cultural creativity) to explore new possibilities.
IV. Trading Guide: How to Profit from the High Volatility of Meme Coins
1) Wise Choice of Trading Methods
- Spot Trading - The Preferred Choice for Conservative Investors Spot trading is particularly suitable for investors who have thoroughly researched the project and are confident in its development prospects. These investors typically:
Have a positive outlook on the project's long-term development blueprint, such as a unique community culture or philanthropic vision.
Adopt the classic "buy and hold" (HODL) strategy.
Do not use leverage to reduce liquidation risks.
Can remain calm during market fluctuations and focus on the project's fundamental value.
2. USDT Futures - The Playground for Advanced Players
The futures market provides an ideal platform for traders seeking higher returns:
Amplify trading scale through leverage, using small funds to leverage large markets.
Support two-way trading, allowing profits in both rising and falling markets.
Requires more professional market judgment and risk control awareness.
Suitable for short-term players with rich trading experience.
2) Key Points of Risk Management
1. Take Profit and Stop Loss - The Lifeline of Traders
In the rapidly changing market of meme coins, a reasonable take profit and stop loss strategy is crucial:
A trending tweet can cause the coin price to surge several times.
Negative news can lead to a sudden price drop.
It is recommended to use automatic orders to execute take profit and stop loss.
Avoid missing the best trading opportunities due to emotional fluctuations.
2. Position Control - The Eternal Winning Rule
Scientific position management can help you stand firm in a turbulent market:
Control leverage ratios; excessive leverage is the biggest risk.
Diversify investments; do not put all your eggs in one basket.
Losses in a single position should not threaten the overall account security.
Remember that the volatility of meme coins far exceeds that of Bitcoin and Ethereum.
3) Data Analysis and Tool Application
1. Social Media Trend Tracking
The price of meme coins is highly correlated with social media popularity:
Focus on the discussion heat on Twitter, Reddit, Telegram, and Discord.
A sudden increase in community activity often indicates that a market trend is about to start.
Beware of the "sell the news" trap; the retreat of news hotspots often accompanies price declines.
Social signals should be combined with other indicators for comprehensive judgment.
2. On-Chain Data Analysis and Hotspot Alerts
Professional data analysis tools are key to winning in the meme coin market:
Use on-chain platforms like AVE.ai to track the fund movements and holdings changes of large wallets.
Identify potential risk projects in advance through smart contract security audit features.
Monitor the operational behavior of project addresses to warn of possible crash signals.
Analyze the distribution of token holders and changes in liquidity.
Accurately capture trading opportunities and keep pace with market rhythms,
Grasp market rhythms to enhance trading efficiency:
Use AVE.ai to view multi-chain market conditions in real-time and discover price anomalies at the first opportunity.
Pay attention to trading signals pushed by the platform to receive market hotspot alerts.
Analyze market sentiment through trading volume and buy-sell orders.
Participate in trading activities regularly held by the platform (like the Meme Trading Airdrop Competition), to earn additional profits.
3. Track Project Development
Quality meme coin projects often gradually develop practical application value:
Pay attention to the project's layout in areas like NFTs and DeFi.
Track technological updates and the launch of new features.
Assess the completeness of community governance.
Observe the long-term development plans of the project team.
V. Looking Ahead: The New Normal of Meme Coins and the Crypto Market
By 2025, meme coins are no longer just representatives of meme culture but symbols of the deep intersection of technology, culture, and finance. With the continuous development of AI-driven meme coins, NFT integration, and DeFi applications, the influence of these tokens will continue to expand, gradually transforming from mere speculative tools into key forces driving innovation. Meanwhile, the operational model of the crypto market is also undergoing profound changes, with flexible trading and rapid adaptation becoming the new survival rules.
The future crypto market will be more complex and diverse. Investors need to possess sharp market insight, flexible response strategies, and a deep understanding of on-chain data to gain an advantage in this challenging environment.
For investors, rational judgment and flexible responses will be the keys to success. By leveraging professional tools (like AVE.ai) for on-chain data analysis, understanding market trends, and identifying potential risks, one can remain undefeated in a complex and ever-changing environment. In an era of both opportunities and challenges, those who can keep pace with the times and continuously adjust their strategies will undoubtedly stand out in this wave of market evolution.
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