Innovation within the circle has exhausted, while innovation outside the circle is thriving.
Author: Dayu
CRCL surged to 300, with a trading volume exceeding 10 billion. Unfortunately, I realized it a bit late—though being late is better than missing out. I would rather be stuck in a position than not get in at all; not getting in feels worse than a breakup—even if the bride price is to buy 250 CRCL, I would agree.
In contrast, the crypto market has already cooled down. The reasons are comprehensive and deep-rooted, simply put, they include the following points:
1. VCs have been cut or have cut others; they won't come back.
VCs set up projects with overly high valuations. From the feedback in the comments regarding MOVE, Bearchain, Eigenlayer, etc., it is quite clear which ones were setups and which VCs genuinely invested due to their ideals.
From the beginning, those who set up the schemes knew who to cut and how to cut. After they cut, they won't come back, leaving while cursing "sb"—they are actually the clearest ones, knowing that apart from BTC, 99% of the rest in the crypto market is garbage.
Idealistic VCs clearly thought that this wave of BTC would surge to 100,000 or 250,000, and that protocols like Eigenlayer would soar alongside ETH breaking through 10,000 or 20,000, making a valuation of tens of billions seem reasonable. However, the coins haven't even unlocked, and the crypto market has already cooled down.
These VCs won't stick around either, as their LPs have already lost 60-90%. The funds are either dissolving or struggling to hold on until they do. As far as I know, many first-tier funds in the crypto space have nearly disbanded, and the reason a few remain is to employ some "stay-behind veterans" to accept coins that project parties want to issue but haven't yet.
If you were to interview many first-tier VCs and ask them to summarize their thoughts in one sentence, it might be: "I am sb; I should have just bought BTC."
2. Innovation within the circle has exhausted.
In past bull markets, whether it was ICOs, DeFi, or NFTs, there were great innovations, and some things were preserved. This time, however, there is only one limping innovation, which is inscriptions, but unfortunately, nothing will be preserved because everyone realizes this is not innovation.
Is there still innovation in the crypto space? This is actually debatable. Internally, there seems to be none left; while we cannot predict the future, the probability of great innovations emerging has dropped from 50% to 10%. However, outside the crypto space, innovation is thriving.
3. Innovation outside the circle is thriving.
Is CRCL an innovation? Yes, it aims to disrupt Visa's $600 billion market cap and take over the vast imagination of cross-border payments—because its efficiency and cost are 100 times stronger than traditional cross-border payments. From this perspective, 250 CRCL seems too expensive compared to 60, but if you believe it will reach 3000 and are not afraid of temporarily being stuck at 60, it doesn't seem like a bad idea.
RWA is an innovation, but it probably won't be useful; at its core, it still aims to issue coins and cut leeks.
Is compliance "innovation"? Strictly speaking, calling it innovation is a bit of a stretch, but compliance is essentially just a bridge; the essence is that crypto is on the road to mainstream acceptance.
Some things can be anticipated:
Compliance is a major trend; the premise for significant development in the crypto space is large-scale compliance. Non-compliant exchanges and applications, including USDT, will increasingly face restrictions.
Under the trend of compliance, the most outstanding projects in the crypto space may gradually stop issuing coins and instead go for IPOs in the US stock market, where the pool of capital is much larger.
In the past, the value and consensus of Bitcoin were somewhat supported by the innovation and prosperity of altcoins, and this segment has cooled down. I have always been concerned about this, but later I realized that the way we play in our circle needs to change significantly!
In the future, the dissemination of Bitcoin's consensus will not rely on web3 breaking the circle—this has already become a false proposition. The tricks used in our circle to cut leeks will no longer work on the old leeks outside the circle; instead, it will rely on the integration of web2. Through compliance, in the future, when people shop on Amazon or Pinduoduo, they will directly use compliant USDC for payment. They won't need a U-card based on USDC; a built-in wallet in the app will suffice, supporting BTC and USDC payments.
I believe the most likely form of BTC payment is not some garbage like the Lightning Network, but rather something like the official wallets of Coinbase or USDC, or cbBTC hosted on the Base chain. For example, users can exchange BTC for cbBTC, making it very convenient to use—and the underlying assets are hosted by Coinbase, which is relatively reassuring, as ETFs are also fully hosted there.
Of course, those with a lot of money might think that self-custody is not good, but the opinions of a minority are not important; the hundreds of billions of dollars in ETFs are the conclusion.
Through the reasons above, I have gained a comprehensive understanding of the current crypto space both inside and outside. I often say, "Go fishing where there are many fish." Moving forward, whether we are investing or speculating, we should think along this line.
I have summarized several questions to consider before investing/speculating:
- Will outside capital be interested in this?
- Is it easy to speculate on this?
- Is there a large imaginative space for this?
Thus, I believe that outside capital is currently focusing on stablecoins and compliance, which is a direction that needs to be considered seriously.
There are not many investable targets in this area.
If CRCL drops back to 60, countless people will want to rush in, making it difficult to drop back in the short term. If you don't want to predict, either don't look at it and wait for it to drop before considering, as nothing will keep rising indefinitely; if you fear missing out, buy a small position to hold and then research, and in the future, dollar-cost average down to 60.
Recently, I have also spent a lot of time researching Hashkey's platform token HSK, with an FDV of over 400 million, but the company's cash burn is likely already more than 400 million. HSK is an exchange platform token and also the gas for the Hashkey public chain, somewhat resembling the strategy of Coinbase + Base.
With the concept of compliance and the stablecoin boom, it serves as OTC settlement (the OTC business should have kept the company afloat), so as long as it gets listed on an exchange like OKX, the depth will be sufficient to trade in the current heated market.
However, the downside is that the business is poorly managed; I have heard that there is significant internal conflict, and they probably haven't found the right people. It would be best to find someone who has made a lot of money in the crypto space, understands the crypto market, has ideals, and doesn't need a salary, but can do a good job and share enough profits in the future. However, for short-term speculation, it's better not to waste effort "teaching others how to do things."
From a patriotic perspective, I am also very much looking forward to an Eastern Coinbase emerging. Coinbase has a market cap of 100 billion, while here the FDV is 400 million; OSL, which previously had similar energy to Hashkey, is listed on the Hong Kong stock market with a market cap of 7 billion, but its business volume is only 1/10 of Hashkey's.
CRCL is an investment, while HSK is speculation—investing in US stocks and speculating on HSK is quite good.
Currently, HSK has relatively more depth on Gate, but it is still far from enough. Similar to the period of inscriptions, it was only available on Gate at first, and liquidity only became comfortable after it was listed on Binance.
In the meme field, I feel that conspiracy coins and the like are not worth participating in; they seem meaningless, just a way to show off to friends; traditional ones are also not fun.
Referring to the logic of the stock market, I believe that only memes that interest outsiders have a future.
Currently, there is only one Labubu, and I am glad to see it remain relatively strong; if it collapses, it will be gone. Many people have not researched Labubu and do not understand how popular it is compared to Pop Mart.
Brands like Parado, Chanel, and LV are continuously declining, while Labubu has become the most discussed term among wealthy women, with stores opening next to luxury goods.
Labubu is the main force of Pop Mart, and there will soon be movies and other promotions. Pop Mart's strategy is not just to create more IPs; another key point is to hope to create a century-old IP.
Currently, Labubu is more popular overseas than domestically, with unboxing videos spreading spontaneously on TikTok, generating much more heat than PEPE and similar tokens.
Those who do not understand memes might wonder what this has to do with your garbage coin. In fact, understanding PEPE makes it easier to understand Labubu; both are bought overseas, and China only rises later. The PEPE frog is a meme on the internet; what does it have to do with the crypto space? It merely stood firm at several million at the beginning.
Currently, the only cultural thing that outsiders understand and will continue to spread is Labubu; this level of heat cannot be compared to the three-minute heat generated by Old Ma posting a picture.
When it comes to memes, if you are going to gamble, bet on those that have a long duration and high ceiling.
Currently holding BTC, hype HSK, and Labubu; if you have a vested interest, please do your own research before buying.
In the stock market, I have positions in PDD, UNH, Coinbase, Tencent, etc., and have added a small speculative position in CRCL.
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