Original Title: "EP32: This Cycle, My Experience and Lessons Learned"

Original Source: Mint Ventures

· Host: Alex, Research Partner at Mint Ventures

· Guests: XinGPT, Crypto Investor; RainyNap, Crypto KOL

· Recording Date: 2025.7.4

Disclaimer: The content discussed in this podcast episode does not represent the views of the guests' respective organizations, and the mentioned projects do not constitute any investment advice.

Hello everyone, welcome to WEB3 Mint To Be initiated by Mint Ventures. Here, we clarify facts, explore realities, and seek consensus in the WEB3 world through continuous questioning and deep thinking. We aim to elucidate the logic behind hot topics, provide insights beyond the events themselves, and introduce diverse perspectives.

Alex: Today we have two guests. The first guest is XinGPT. I remember the last time XinGPT was on the show should have been in September 2023, before the infamous meme coin bull run officially broke out. We discussed a so-called bull market's primary uptrend topic back then. The other guest is appearing on our show for the first time, and is a well-known KOL, RainyNap. Let's have both guests introduce themselves.

RainyNap: Hello everyone, I'm RainyNap, a KOL on Twitter, specializing in narrative and fundamental-related sharing. I'm currently focusing on how to leverage data for successful trading.

XinGPT: Hello everyone, I have been involved in VC investment and more investment research before. Recently, I have been paying more attention to DeFi and US stocks, and looking at some AI-related things, so it's like transitioning from the primary to the secondary.

Evaluation of the Current Stage and Reasons

Alex: Today's topic may be different from the previous few episodes. In the previous episodes, we picked a specific track or narrative to discuss, including stablecoins, RWA, and so on. This time, we will talk more about subjective, emotional, and personal experience. The theme of this episode is "This Cycle, My Experience and Lessons Learned," aiming to discuss what everyone has experienced in this cycle up to now, what can be summarized, reused, and shared with the audience. The first question today is about the current stage of the cycle, which many people are currently concerned about. What stage of this bull market cycle are we currently in? What are your reasons for this judgment?

XinGPT: I think it's actually quite difficult to define what stage of a bull market we are in, depending on whether it's a Bitcoin bull market or another type of bull market. If we're looking at it from the perspective of a Bitcoin bull market, I think we are still in the middle of the bull market, and it's hard to judge which specific stage we are in. However, in terms of altcoins, I believe we have entered a very deep bear market stage. From around January and February onwards until now, I think we have entered a deep bear market stage for altcoins, and most players can feel it. Currently, I think there is still hope for Bitcoin, but I believe altcoins may need some time to adjust, possibly even more than half a year of adjustment. So, during this time, players in the crypto space may not feel particularly comfortable, at least that's my personal feeling.

雨中狂睡: My view is actually quite similar to XinGPT's. I think the current cycle has completely deviated from the previous four-year cycle theory. I believe we should not think about what stage of a cycle the entire crypto market is in right now. It's a very chaotic state at the moment, with BTC standing out, altcoins in a slump, but stocks surging when associated with the crypto concept. It's unpredictable which cycle we are in. I think we should dissect and analyze each part separately. For example, stocks are stocks, BTC is BTC, altcoins are altcoins, each market follows different logic. For example, I am bullish on BTC and have higher expectations for BTC because I think more buyers will come to BTC, making it hard not to be bullish on BTC's price performance. With major altcoins, focus on the fundamentals. For example, AAVE, HyperLiquid, these projects have buybacks, making them good long-term holds. You can wait to buy the dip when the price is relatively low, then hold for the long term because their fundamentals are strongly correlated with price. When dealing with small-cap altcoins, it mainly depends on market makers, and liquidity is poor. Market makers are most likely to manipulate through contracts during events, so you need to observe the behavior of market makers through contract data, such as whale holdings, long/short ratios, open interest, trading volume to make a judgment and predict whether the price will go up or down in the future.

Alex: Let me briefly summarize the opinions of these two. In this current cycle, it's very difficult to summarize Bitcoin, altcoins, and crypto-related stock concepts with a single complete cycle. This time, the differentiation is very obvious, with Bitcoin having its fundamentals, altcoins having their own fundamentals, and within altcoins, there are those with strong fundamentals and those with weak narratives and fundamentals, showing different price performances and cycle stages. Moreover, there has been the emergence of the so-called coin-stocks as a new format. Previously, there might have only been a few projects like MicroStrategy, but now there are many such projects, all in different cycle stages.

Investment Difficulty Change in This Cycle

Alex: So let's discuss the second question. I don't know if this cycle is the time when both of you entered the crypto industry, or when you started your crypto investment journey? Personally, do you feel that investment has become more difficult or easier in this cycle? What might be the reasons for this?

Rainmaker: Okay. For me, it has become more difficult. For someone who experienced 2021, this cycle is really tough. It used to feel like as long as you constructed a narrative and accurately predicted the narrative's direction, you could easily make money. Perhaps you bought into the narrative of the second or third blockchain dragon, and the price increase far exceeded that of the first dragon. For example, at that time there was GameFi, DeFi, such as when Ethereum's performance was not great and couldn't accommodate more users, there emerged the concept of a forked Layer 1, such as BSC, Avalanche, and so on. At that time, as long as you bought in and entered the PVE stage, you could easily make money. If you bought projects in GameFi and DeFi, basically as long as you understood their products and how their tokens functioned, you could easily make money.

Moreover, the ways to make money also offered you a variety, such as providing liquidity, playing games, earning rewards, all of which were basically PVE games. At that time, I was just entering the industry, but still made some money. Sometimes it was a matter of holding on to the assets, and you would see tens of multiples in gains, which was quite terrifying. Now, my experience is definitely a bit more seasoned, but the difficulty of making money is like night and day. Firstly, the market liquidity is not great, forcing some project teams to not aim for larger gains and then exit the market. Many project teams nowadays are only concerned about getting listed quickly on major exchanges, creating a high FDV, and then just being inactive.

Alex: They also lack vision.

Rainmaker: Yes, this is something many heavily funded project teams want to do, which is to have a high listing price. For small projects with listings in the tens of millions, they may actually hope to make some money through Binance's Wallet IDO or Alpha contract. This cycle is probably like this. Of course, this cycle also involves on-chain activities, which for many people may actually be a good way to make money. But I am not particularly good at on-chain PVP. Although I made money during the AI agent wave, it was more because I understood the narrative, then ambushed or positioned some tickers, and finally when the narrative unfolded, there was a significant price increase for about a month, roughly like that.

XinGPT: I think everyone actually feels that it has become more difficult, right? I believe this is a macro issue, with no easing at the macro level. The main issue is that we have always been in a high-interest-rate environment, and in reality, everyone is still benefiting from the money injected by the Federal Reserve. Secondly, from the perspective of the secondary market, Bitcoin's market cap is also quite high now. If it were to surge further, a very significant amount of capital would indeed be required, which is an objective reason. Looking at the bigger picture, this is indeed the case. On a micro level, perhaps because of my previous experience as a VC, I feel more deeply about this imbalance of supply and demand. On the supply side, VCs have raised a large amount of capital after 2022, especially in North America, VC fundraising amounts to hundreds of millions or even tens of billions of dollars in scale. However, projects in the Web3 space, with their scale, find it very challenging to absorb this level of funding, leading to a situation where many projects have raised a lot of money but are unsure of what to do with it, resulting in an oversupply scenario. This situation also exists in the AI field, although AI has not issued coins; however, the valuations in the primary and secondary markets in AI are currently experiencing a bubble scenario. Hence, this is a structural issue in the primary and secondary markets.

Additionally, I'll add one detail, that is, as Professor Shui mentioned before, holding onto a diamond without moving will bring rewards in a wave. In fact, I have an impression that few people talk about market manipulation, including engaging in chip analysis. Because in the previous bull market, liquidity was too abundant, so basically, those who wanted to manipulate the market and hold chips, be it project teams or market makers, ended up being unable to hold onto these chips. When they wanted to sell high and buy low, as soon as they sold, funds from an unknown source directly pumped up the market price. So, in the last wave, what I heard most was that the manipulators sold off or the project teams sold off. In this wave, what I hear most is that the manipulators have rug-pulled or some market makers have engaged in price manipulation. I think the crypto industry is still a long-tail market for finance, or you could say it's a global market with relatively lower liquidity compared to the U.S. stock market.

So, from a financial perspective, I think it still cannot escape the rule of financial bubbles. But subjectively, I think the crypto industry's intrinsic creativity has weakened somewhat in this cycle. For example, although AI is in a huge bubble, starting from 2023, ChatGPT has grown to hundreds of millions of users, and Cursor now has tens of millions of users. So, its actual value can offset this bubble. Including companies like NVIDIA, of course, they are in a bubble, but NVIDIA's graphics cards are still in short supply. So, I think there are fewer things intrinsically capable of offsetting bubbles. Stablecoins might be more prevalent, but stablecoins are still quite separate from tokens. In the last wave, DeFi and NFTs were actually in a state of bubble deflation, although they also contributed to the creation of bubbles. Especially for NFTs, when NFTs were sold outside the circle, the people from outside the Web3 world who bought in were in a state of bubble deflation, which is actually a form of consumption. However, in this cycle, we have hardly seen external players coming in to buy in, except for Bitcoin; only Bitcoin has that attraction.

Alex: Yes, so regarding whether this investment cycle is harder or easier, almost everyone's answer is clearly that it's harder. The first issue is the lack of liquidity, as there hasn't been a significant easing of monetary policy yet. Another issue, as XinGPT just mentioned, is our internal innovation and product attractiveness, which is weak both within and outside the industry, compared to the previous cycle. In the last cycle, DeFi attracted a large amount of capital, and projects like NFTs and gaming brought in many entrepreneurs and players from outside the industry. I remember that at that time, a representative NFT project was NBA Top Shots issued on FLOW, creating digital player cards using NFTs. Many people outside the industry were trading this, bringing in a significant number of users, funds, developers, and industry capital to hype up the market. This time around, there is nothing like that, leading to weak fundamentals and business data, preventing valuations from rising.

The Most Correct Operation in This Cycle

Alex: So, in this challenging cycle, which investment operation or strategy do you think has been the most correct one you have made so far? Just mention one or two. What was the background of the strategy formulation or operation at that time?

XinGPT: In this cycle, I feel that it's all a lesson, and there have not been many correct operations. I can list many wrong operations. As for the correct operations, well, to be honest, this year has been okay because the market conditions have been quite tough. I haven't lost much money this year, which is already very good. Last year was relatively poor; I may still have been in the process of transitioning from the strategy used in the previous bull market. I bought a lot of low-quality projects last year, and it resulted in significant losses. A good thing this year is that I have distanced myself from those low-quality projects. I can mention two good moves. First, in February and April of this year, when Bitcoin plummeted twice, I bought some. Of course, I didn't go all-in or leverage up; I just used cash to buy some Bitcoin and have held it until now, which I think is better than before. Previously, I almost didn't hold any Bitcoin, but now about half of my position is in Bitcoin. This shift is significant, and I bought at a reasonable price, not at a peak. I think at least capturing the beta is crucial. The second good move is that I exited the altcoin bubble trend quite timely. I remember during the Deepseek wave, which was around January 30, if I remember correctly, when the U.S. stock market crashed. At that time, I basically sold all my altcoins at the peak without waiting for a rebound. Later, in February, when the altcoins were down by 80% to 90%, I still managed to preserve most of my gains. I think these two moves were decent.

Alex: You just mentioned a very important point, which is that previously Bitcoin had relatively little allocation, but during this year's round of bottom fishing, you went half in on BTC. What was the motivation or thought process behind this shift in thinking or strategy?

XinGPT: I think perhaps people in the crypto circle who were speculating on altcoins, especially those who entered the circle after 2019, mostly didn't have much Bitcoin. Perhaps the very old-timers who entered before '16, when they entered the circle, focused on speculating on Bitcoin as the primary asset. Later entrants may have been more into altcoins and Ethereum because that's where they made their money. In the previous bull run, I mainly relied on Ethereum earnings and some altcoin gains. Everyone tends to path-dependently buy Ethereum and altcoins. But you'll notice that in '24, altcoins basically had negative returns, which makes you question the strategy. Moreover, you'll find that new entrants nowadays basically don't buy altcoins, they only buy "meme coins". The market structure is such that many institutions are buying Bitcoin, not altcoins, and some are not even buying Ethereum. I was previously in a family office where the people were very traditional; they only understood Bitcoin. Trying to convince them about Ethereum, Solana, or other seemingly solid projects was very difficult to get their approval.

When it comes to Bitcoin, everyone has been brainwashed quite thoroughly. Even though they may not necessarily agree or have doubts, the reality is that everyone is buying it. And these new entrants only buy "meme coins" and don't touch altcoins, leaving only old hodlers or veteran players in altcoins. But the altcoin supply is constantly flowing, creating a very poor market structure. I used to have first-hand knowledge of many project teams discussing, and everyone feels that launching a project is not profitable anymore. After distributing tokens to the exchange, conducting airdrops, engaging agencies, and going through market making, they realized that it's often more profitable not to launch the project at all. So in this scenario, altcoins lack the growth momentum. The project teams lack the motivation to pursue their projects, and there's no one willing to take over. This ecosystem is very weak. Therefore, when you calculate everything, Bitcoin still offers the most stable returns, even though it may not provide the highest multiples. I also compared Bitcoin to other major asset categories in some markets. In the case of the US stock market, apart from those very high-flying stocks like NVIDIA, Palantir, and Rocket Lab, Bitcoin has basically outperformed most of the stocks. So, at least in my view, it is a relatively high-quality asset category. After lowering my expectations, I still believe that Bitcoin is a good choice.

Rain in the Wild: Let me talk about the AI Agent narrative. Last year, I wrote an article about the All In Agent narrative, and indeed, I reaped many rewards from that wave. For example, Virtual, which I bought around $0.35, and then started selling above $4, selling all above $3. The background was that Goat emerged, and I began to realize the market's high interest in this kind of Ticker's sector. Besides, considering that at the end of the year, OpenAI seemed to have a module for an Agent coming up, there was an expectation. Furthermore, with the Fed's rate cut that would boost market confidence, so I made a related Ticker in that sector. This is what I think was the correct investment move I made. But actually, this was also an anticipation of the Agent's narrative, and I bought a lot of OLAS, and then lost money. At that time, there wasn't an environment ripe for such a large-scale narrative explosion. So, I learned from that lesson and when there was a hint of an opportunity, I jumped right in.

Alex: Got it. So, you mean to say that the most successful move in this cycle, or the one that brought you the highest return, was being early to recognize the AI Agent narrative or the early breakout of this narrative. At that time, the asset you chose was Virtual, right?

Rainman: Yes, I also had some on Solana, and I made tens of thousands of dollars at that time, but I had a very high outlook and ended up losing money in the end.

Mistakes and Lessons Learned in This Cycle

Alex: Okay. Just now, Teacher XinGPT mentioned that we all found it very challenging in this cycle, and perhaps the lessons we can summarize are more than the good practices. So, our next question is, in this cycle of self-reflection, what is the biggest mistake we should avoid in our investments, and what experience does this mistake come with?

XinGPT: I think the main thing is to do simple things, not always try to pursue alpha and aim for tenfold or hundredfold growth. Everyone knows that the overall financial environment is rather tight, but no one wants to admit that they can only earn beta, can only buy Bitcoin. Everyone tends to focus on the top projects like 0XSUN and fixate on these people who seem to be printing money day in and day out, causing a lot of anxiety. So, everyone thinks, "I can do that too, I can also print money." But this is actually losing sight of the big picture. While being at the forefront is great, most people actually can't make that kind of money. Instead, they exhaust a lot of energy to be at the forefront, even resorting to actions like trading with high leverage or taking large positions in meme coins. I think many people lose money mainly because they are too impatient. Including myself, I have also made some rather foolish moves, buying meme coins at a high price with a large position and getting liquidated in high-leverage contracts. But luckily, I didn't suffer any major losses, and I consider it sensible that most of my positions are in Bitcoin, USDT, cash, and major cryptocurrencies.

So, I think we shouldn't rush. In this kind of market environment, it's generally better to try with small positions. It's good if you can catch a meme that provides hundredfold gains, but if you can't, I think it's important to keep a balanced mindset and admit that you are just an average investor. I think most people are making money off the market, and that's good enough. I think not everyone needs to make hundredfold or thousandfold gains because, first of all, the number of people who can achieve such gains is very, very small, probably only ten to twenty people in the entire market. Second, the effort you put in to gain hundredfold or thousandfold returns is not proportionate. It might require sitting idle for several days and nights, but the returns you get may not even compare to simply holding onto Bitcoin. The other day, I heard Wang Yishi say something. He got into the industry very early, in 2011 or 2012. He did a lot of things, invested, started projects, and in the end, after all the hustle, his Bitcoin holdings were only a tenth of what they were back then. I think it's better to stick to the simplest things. But that's really hard to do, and every day, I have to remind myself to stick to doing the right and simple things, things that are long-term. Everyone knows that Bitcoin will rise, everyone knows that the US stock market will likely rise, so why can't everyone hold on? I think maybe every day you have to think about why you can't be more long-term oriented, why you can't consider things from that perspective. I believe this is the most important lesson I've learned in this cycle.

RainyNap: My main thoughts are mainly three points. The first point is not to predict the market; you should follow the market. The second point is to be cautious when you are overconfident. When your ego becomes stronger, you need to be cautious. When you become more and more confident, you need to be cautious to see if your over-confidence is due to the market changes or profitable investment operations, leading to some erroneous expectations. The third point is to do more trade reviews. I think writing trade reviews is a very important thing in trading. It will help you record some of your past operations, including correct and incorrect behaviors. Looking back more will greatly improve your trading skills. What struck me the most was that at that time, I was very optimistic about the impact of Trump taking office, and I was also overly optimistic about the asset price performance at the beginning of this year. In fact, I made some of the mistakes I just mentioned. At that time, I thought that Trump's inauguration might bring political certainty, and everyone said so, but what he actually brought was political uncertainty. I think XinGPT is right; you have to accept a slow process of getting rich, rather than seeking quick success and making a lot of money all at once, as those are actually low-probability events. You should do simple and right things.

Alex: Okay, you just mentioned a point, and I'd like to follow up with a question. You just said the second point to watch out for is when personal ego becomes more inflated, it might be a risky time. In your personal experience, what signs of an inflated ego could make you aware of it?

RainyNap: It's quite simple. When others tell you something, and you completely ignore it, thinking everyone else is a fool and only your predictions are correct. Then you go back to the first point, which is not to predict the market; you should follow the market and see where it goes. Whether it's small or big, for example, watching how BTC moves. I feel that if you try to predict based on the previous cycle theories, you will definitely suffer a lot in this round, including saying that BTC's rise will bring an altcoin season. I think this is something to be cautious about.

Alex: You just mentioned writing trade reviews, do you have a regular cycle, like writing once a day or once a week, or how?

RainyNap: One trade at a time. Write down the core points of how you made money or lost money. You don't need to mention why you bought that coin; just write down which core point led to making or losing money. Take it out and look at it from time to time. You can also categorize, such as how you did with BTC, small-cap altcoins, large-cap altcoins, stocks separately, categorize them. Using Notion for this is especially convenient.

Alex: Let me talk about my personal reflections on the two questions in this round. The first one is the worst decision I've made. The asset in which I personally suffered the most losses in this round is a project I previously wrote about called Covalent. It provides data services and is somewhat similar to projects like The Graph (GRT). The main reason I lost money at that time was because I had a relatively large position in this meme project. Although it wasn't a large absolute position in terms of percentage of my portfolio, it was one of the highest allocations among all meme coins. I took a significant position because I believed in the project's fundamentals, and it was part of the very hot Solana ecosystem at the time, being one of the core infrastructure projects. However, in reality, the fundamentals of this project were not strong enough to justify such a heavy position. The reason I took such a large position was, as just mentioned by Professor XinGPT, I made an incorrect assessment of this cycle, thinking that the meme season was still to come. Based on the past 21 years of meme seasons, as long as the fundamentals were good and the project was in a relatively low spotlight at the time, virtually unnoticed by others.

If a solid project suddenly attracts significant attention, experiencing a massive marginal improvement, based on experiences from the previous cycle, it would see a tenfold or even several tens of times increase in value. However, as we all know, the meme season did not arrive later. Whether in terms of attention or funds, there was no substantial marginal growth injection into the meme projects, causing this meme project to remain stagnant in terms of market cap, even though its fundamentals were decent. This project was one of the major mistakes I made in this cycle. On the other hand, a relatively correct move I made in this cycle was that I still adhered to fundamental-based investing. Following this principle, last year, quite early on, I noticed a deterioration in Ethereum's on-chain data, especially after the Cancun update, where metrics such as gas fees, active addresses, and various key indicators showed a clear deterioration. Therefore, quite early last year, I switched these Ethereum positions to Bitcoin. Also, due to this philosophy, I didn't buy most meme coins with weak fundamentals. Therefore, I avoided the exchange rate slump of Ethereum against Bitcoin in this cycle and didn't lose much money due to meme coins. This might be a relatively good point that can be reused in the next cycle.

Assessment of the Meme Season

Alex: Now, let's get back to the meme coin issue because this issue is still relevant to most retail investors, who still hope to achieve wealth growth in the crypto market through higher multipliers. So, do you think the meme season will happen again? Because currently, meme coins have significantly underperformed Bitcoin in this cycle. Is there a possibility that at some point, meme coins will experience a significant rebound in the Bitcoin exchange rate? Do you think this possibility still exists, and what could be the reasons for it?

Rainy Daydreaming: I think there may still be a partial altcoin season, as there is no universal bull market. Firstly, there is a lack of market attention, meaning that in an era where the issuance of assets is becoming increasingly convenient, the number of altcoins will continue to grow, making it more challenging. If you are looking at the long term, you can only follow the narrative and fundamentals to buy some high-quality assets, such as AAVE and HyperLiquid, as mentioned earlier. Secondly, I believe it is the interaction between liquidity and market confidence that has made the current altcoin season seem unattainable. If there are macro external factors, similar to when OpenAI launched ChatGPT and brought us that kind of shock, or if the Fed starts cutting interest rates again (as expected twice this year), as long as these events occur, it will be able to instill confidence in the market, encouraging investors to spend money on altcoins they believe in.

Moreover, the market has enough money to drive a narrative hype for specific sector assets, but currently, the market is very pessimistic, and no one is willing to take a risk. For example, regarding the AI Agent mentioned earlier, I think a significant reason depends on the interest rate cut in November last year, which overall raised the market's expectations for the future, leading to a higher preference and enthusiasm for risk assets. I think we are still lacking some relative events to boost market confidence in altcoins, whether it's liquidity expectations or expectations of technological advancements; we are missing such an event. This is my general idea, and there may still be a partial altcoin season, as the market primarily lacks confidence.

XinGPT: If we are talking about a partial altcoin season, I agree. However, if we are discussing a full-scale altcoin season, I think it is highly unlikely. In the current altcoin market, it can be compared to the A-share market. Firstly, the fundamentals are very poor, as most A-share listed companies go public primarily to cash out, which is also the purpose of most project token launches. Secondly, liquidity is highly fragmented. Looking at A-shares, with over 4 million retail investors, most stocks do not see significant increases as liquidity is too diluted with most institutions holding onto only a few stocks. I think it is very challenging to hype altcoins because there are too many of them. If you were to engage in the A-share market, your understanding of the altcoin market would deepen, as it's all about institutions banding together to pump thematic stocks, such as last year's AI Agent, which we have not seen this year yet. Previously, there was a small wave with RWA and PayFi, but it did not constitute an altcoin season. Moving forward, it may be more about institutions rallying together to pump thematic coins.

Another point is insider trading and market manipulation. Similar to A-shares where speculative capital drives up stock prices, in the crypto space, you can see some coins being pumped and dumped through contracts. I believe this tactic is the same, and even many people are from the same group involved in A-shares. Therefore, I believe that a comprehensive altcoin season may not happen in the future, and it may never happen. Previously, I was relatively less pessimistic, thinking that perhaps things would improve after the altcoin market liquidity is cleared out. However, I think that time may never come again. With the increasing number of people working in the crypto space, as well as project teams, and with the overall market size much larger than before, project teams find it much more rewarding in terms of effort and return on investment to launch new projects rather than maintain an existing one. Building an existing project from a $50 million market cap to $500 million is an extremely challenging process. But launching a new project and reaching a $500 million market cap is much easier than pumping an old project. Therefore, I believe the supply of new projects will continue to increase, while old projects will keep draining liquidity. Consequently, I think the altcoin market is unlikely to experience a full-scale bull run, much like the A-share market.

Alex: Actually, our internal assessment of meme coins is that every time one shows some strength, it's just a rebound. Don't speculate on whether it will reach a new all-time high or fully blossom. Because, as mentioned earlier, this cycle lacks intrinsic value, and the fact that it cannot rise in price due to the lack of intrinsic value has basically become a consensus. So, I think that this cycle of the crypto market is quite evidently more mature than the previous two. However, I am currently closely monitoring some industry information, hoping to wait for a moment like in 2021 when we saw DeFi, NFTs, and even GameFi, bringing some exciting and improving points when they initially combined with traditional business models. Perhaps it will happen at some point in the future, but when it will happen is unknown. I can only ensure that when the opportunity arises by maintaining continuous observation of the industry on the front line of the market, I can position myself quite early.

The Pros and Cons of Cross-Market Investments and Experience

Alex: Lastly, the topic we are going to discuss is as XinGPT just mentioned that he is now also looking at some U.S. stocks and exploring other opportunities outside of crypto. Everyone now has a general feeling that there were many money-making opportunities in the last cycle, such as rug pulls, gaming, engaging in contracts, PVP, and many other ways. In this cycle, opportunities have significantly decreased. Many people are looking at opportunities in other fields, for example, starting AI startups or trading U.S. stocks. What are the current work statuses of both of you or your thoughts on exploring other opportunities? Please share with us.

XinGPT: I think U.S. stocks are still a relatively deterministic opportunity similar to Bitcoin. I think in the future, U.S. stock investors and coin investors will mostly overlap. Coins in the crypto circle with liquidity and fundamentals will also go public in the U.S. stock market. For example, HyperLiquid, as well as some meme coins including Tron and ETH, may not necessarily go through ETFs but can also enter the U.S. stock market through a shell listing, joining this larger pool. U.S. stock investors can now buy Bitcoin, Ethereum directly through ETFs, and in the future, Solana and other mainstream coins may also have ETFs. So, for coins without ETFs, without the U.S. stock market, meme coins, it's like a trading market, off-exchange market, or a low-liquidity market, somewhat akin to gambling. So, this differentiation is quite evident. I think the simple approach is to trade U.S. stocks along with these mainstream coins, enjoying the stable monetary policy of the Federal Reserve, while using small funds to engage in on-chain and meme coin battles for high multiples. I believe this fund allocation needs adjustment for me. To engage in U.S. stocks, you need to learn the market's volatility and changes. I think these are some changes in market structure.

Alex: So, considering your current situation, what would be the allocation of your investment funds between US stocks and cryptocurrency?

XinGPT: Currently, I prefer to maintain a 50-50 split. The cryptocurrency market experiences too much volatility, and for me, I lean more towards seeking certainty. The benefit of the US stock market is that you can invest in a variety of asset classes, such as gold, oil, and other commodities. In case of macroeconomic changes, like if you want to engage in options trading or invest in government bonds, the options available are more diverse. So, I am also diversifying into other types of assets. The advantage of the cryptocurrency market is that it offers higher returns for small players. I believe it is more suitable for newcomers who have ample time, a small investment amount, and are very suitable for participating in meme coins or other high-risk investments. This may not be very friendly for players like us, and this is also another reason why I am transitioning to US stocks.

Alex: Actually, our team has recently been evaluating opportunities in the US stock market because this time around, the cryptocurrency sector doesn't seem to have promising projects. We are all familiar with the investment adage, "Fish where the fish are plentiful." Currently, the cryptocurrency pond seems to be drying up in the short term. Bitcoin has been allocated appropriately, so we are considering exploring opportunities in the US stock market. However, we are facing a dilemma. We have been investing in the cryptocurrency market for so many years, thinking that by focusing on this sector, we can benefit from the high growth potential of Web3's business model in the future. Another reason is that compared to traditional stock traders and external investors in traditional finance, we have been working in the cryptocurrency market for a longer period, and we have a deeper understanding of this industry's dynamics, giving us a certain cognitive advantage and stronger initiative.

Now, if we were to transition to the US stock market, XinGPT, based on your personal experience, do you think the advantages of cryptocurrency investment can be transferred to stock market investment? What might be our strengths, as well as the weaknesses we need to be aware of?

XinGPT: In my opinion, there are initially more disadvantages than advantages. Because you are unfamiliar with this market, even your experience could be a liability. For example, Take Circle. As far as I know, not many people in the cryptocurrency community have invested in Circle because they consider it overpriced, or they think stablecoins are a stale topic. However, many outsiders are hearing about stablecoins for the first time, and they find it very novel and experience FOMO. People tend to assign a high valuation to things they don't understand. The less you know, the more impressive it seems, and the more you understand, the more mundane it appears. After all, a rocket is just a few chemical fuels and boosters, right? Therefore, your cryptocurrency experience may initially have a negative impact on your stock trading.

But I think the advantage is that, first of all, the trend of coin-stock integration is increasing. So, when you speculate on these coin-stocks, your understanding will definitely be more solid in the long term, especially when it comes to Circle, Coinbase, and others. The first thing is to familiarize yourself with the mentality and logic of speculation, including some recent shell stocks, which I can see are mainly being speculated on by outsiders. I think one needs to understand the way the U.S. stock market works, who will buy and who won't. The whale mentality in the U.S. stock market may be completely different from the whale mentality in the coin market, even requiring one to abandon some previous conceptions from the coin market. However, the advantage is that there is still a lot of overlap in terms of investment strategies. Particularly in the coin market, it is more about emotional trading and lacks much in terms of fundamentals. But sometimes, it can help you filter out a lot of noise. Sometimes, fundamentals can be noise. Everyone knows that when Nvidia, Microsoft, Apple are bullish, why do their stock prices sometimes fall and sometimes rise? Often, it's a game of emotions. So, if you are accustomed to trading coins, you might be more adept at this emotional game, daring to increase your holdings significantly when others are panicking. This was also my mindset when I bottom-fished Nvidia and Tesla in early April, mainly driven by sentiment. So, this aspect might be somewhat helpful in coin trading habits.

Alex: Yes, for example, with Circle and many coin-stocks now, to us, it might seem like just an encrypted asset with a high premium packaging. We might wonder who buys this! But for stock traders, it's like Circle, it's all a very new thing, so they are willing to trade such assets.

Rain in the Rain: The two speakers touched upon a topic that resonates deeply with me. When crossing borders, it is actually a significant disadvantage. For example, I have previously invested in murder mystery games, and basically, I lost all the money, and there was no return at all. In new environments, it is very difficult to determine whether your investment is correct or not. Even in the U.S. stock market, maybe everyone knows about buying Tesla, Nvidia, and the like. For example, if Tesla drops, everyone rushes to buy the dip. As Mr. XinGPT mentioned, what everyone is mostly doing is playing more on events and emotions. Personally, if conditions allow, I would venture more into cash flow businesses and consider a bit more physical presence.

Regarding the U.S. stock market, I might only choose the SPX (S&P 500 Index) and do simple but right things, that's probably the approach. But in the current physical industry, there is indeed no cash flow business yet. Even if you research, there is no good opportunity to seize. Because I believe cash flow is something that can provide a sense of security, so now I will focus my various energies or funds on some on-chain related income opportunities. For example, there are many income opportunities for USD1 now, or some LPs on Pendle, Pendle PT, and others. This kind of opportunity is relatively safe for me, and about 30% to 40% of my position is engaged in such activities. Including, there is also backpack, and then activities like point farming on Lighter, etc. I still prefer to put my funds in areas I am more familiar with. If I stare blankly at the physical world, I feel like I will end up losing everything.

Alex: Yes, personally, I feel that when it comes to investing, first of all, we may not be able to venture too far outside our circle of competence. If we venture too far outside our circle of competence, it may be quite difficult to make money in the long run. However, if the opportunities in the industry covered by your circle of competence are gradually decreasing in the long run, and you stubbornly refuse to expand your circle of competence, this may also not work. So there is still a contradiction, and we still need to gradually adjust this situation. OK, we have been talking for about an hour today. Thank you to both teachers for participating in our program and sharing a lot of insights, experiences, and lessons learned about investing. That's it for our program today. Thank you all.

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