This Bull Market Cycle Differs from the Past

Ritu77

For the upcoming bull market, there are three major differences compared to previous ones. Based on these differences, our trading strategy needs to be adjusted.

1) Difference in capital size: Currently, the total cryptocurrency market cap is $2 trillion, with the price of BTC at $50,000. At the beginning of 2020, BTC was only $10,000.

2) Difference in consensus about the bull market: In previous bull markets, there were reports suggesting cryptocurrencies would go to zero before the bull market began. However, in this cycle, even during the major downturn in 2022, most people believed the next bull market would come.

3) Difference in market participants.

These three differences are obvious and can be used to deduce the differences in this bull market cycle.

1. Increase in market professionalism and the rise of professional secondary institutions: With the increase in the capital volume of the secondary market, the professionalism of the market will undoubtedly increase significantly. With the increase in specialized secondary fund institutions, the need for professional research teams becomes apparent. Additionally, there are funds specifically dedicated to the secondary market. In general, these funds have professional teams, abundant capital, and rich resources. As retail investors, it's unwise to compete with them. Over the past two years, predicting BTC's trend has become more difficult due to the increased presence of powerful institutions, leading to a battle between these institutions.

So what should retail investors like us do?

1) Some existing skills may become less accurate due to the increase in market professionalism.

2) Consider entering the core circle of professional institutions through relationships and networking.

3) If unable to find institutions, form groups with equally capable individuals to conduct research together.

4) In trading, exploit the disadvantages of professional institutions. For example, institutional investment decision-making is slower than individual decision-making, leading to slower reactions to new projects or trends. Institutional investment targets are limited because institutions tend to follow mainstream investment logic, making some investment sectors unsuitable. For example, memes. In the future, opportunities for projects similar to memes may increase.

2. Deepen involvement in certain projects or ecosystems: Suppose reaching a certain market value for a project (e.g., $1 billion circulating) requires a certain amount of capital. In this bull market, the market capitalization has increased tens of times, which means opportunities have also increased tens of times. Of course, the reality might be somewhat different due to the need to exclude projects with initially high market values. However, compared to the last bull market, there are still many more opportunities. In this bull market, a good project or public chain with several institutions and some community users who believe in it can become a project with a decent market value.

At the same time, it also means that a project doesn't need many believers, or even without believers, it won't have any problems. Because it only needs a small proportion of institutions, large holders, and retail investors in the market to recognize it, it will still have a decent market value.

Taking this bull market as an example, memes may have experienced the greatest increase in value, followed by the Sol ecosystem. However, apart from the general market trend, many coins have performed very well, and some have not even been heard of. Not to mention, some new projects that come online benefit a group of people. For example, Pixel, Dym, and so on.

However, don't be too happy too soon. Although there are more opportunities, there are also more institutions and professional teams. Therefore, better projects will attract many people. So in this bull market, you are still just dipping your toes in the water, or following the trend. Then you may only get what they have left, and sometimes not even that.

So the best way to maximize profits is to focus on cultivating good projects. Because there is a lot of capital in the market, good projects will have decent returns in the future. But make sure you're on board early.

3. Obvious premium in valuations, very few undervalued projects: In this bull market, it's already apparent that many projects that go online have very high market values. This is an inevitable manifestation of a market with abundant capital. But what many people haven't realized is that there are very few undervalued projects in the market.

The reason is simple: there's a lot of money and a lot of people in the market. Some professional teams can find projects undervalued by market capitalization. But it's very difficult for ordinary people to find them. So, for me, instead of spending time looking for undervalued projects, it's better to study the bottoms of the trend cycle. Every cyclical adjustment in the market will lead to a downturn in coins, and almost no one can escape. Moreover, prices are misjudged during times of panic. So, spending time studying the bottom of the cycle will make it easier for you to buy at attractive prices.

Using information asymmetry is also a way, especially when the market is awash with capital, the time from the appearance of new projects on the chain to their discovery will take some time.

Iravan774

The bull market has already arrived, it's not just something that's about to come.

977Iti

It's time to make some adjustments.

Isha000

This time feels like a rapid and crazy bull market.