Crypto Assets Market Trend Analysis and Outlook

Recently, I have had more time to think, and I would like to share some views on the market.

The overall trend of the Crypto Assets market is expected to become clearer only after September. Considering the macroeconomic headwinds, limited summer liquidity, and quarterly position adjustments, the real market dynamics may only emerge after the August holidays when market participants return. From the recent market performance, most small coins have risen mainly due to short squeeze. Traders, influenced by the previous rebound, are chasing short-term gains but lack support from long-term holders. Most people have already suffered losses during the previous market turbulence. Unsurprisingly, most tokens that surged quickly also experienced similarly sharp declines afterward.

Ethereum experienced an unexpected rebound, with the previously hardest-hit AI-related coins leading this surge. On the other hand, tokens with actual utility, strong fundamentals, or buyback mechanisms have shown strong resilience—demonstrating not only greater stability during declines but also a quicker recovery. From this, the following insights can be summarized:

1. The demand for Bitcoin is real and lasting.

Traditional capital is gradually entering the market through regulated channels such as ETFs.

The nature of capital supporting BTC is fundamentally different from previous periods. This is also why large-scale BTC liquidations are unlikely to occur unless triggered by macro events.

2. The internal differentiation of small coins is intensifying.

Funds will eventually flow back to small coins, but there will not be a comprehensive coverage. Only tokens with clear purposes and practical application scenarios are likely to attract these funds. This is why Ethereum may outperform other public chains. Regulatory clarity, increased DeFi usage, deflationary structures, and staking demand create a strong virtuous cycle. Furthermore, due to ETH's long-term failure to meet expectations, there are still potential buyers waiting on the sidelines for opportunities.

3. Tokens supported by venture capital carry structural risks.

Token unlocks will continue to put pressure on price trends. In the case of insufficient liquidity, the continuous sell-off by validators and early investors limits the upside potential. Therefore, the future outlook for overvalued tokens listed on centralized exchanges is not optimistic. Certain ecosystem tokens, in particular, face ongoing selling pressure, which is related to their validator reward structure.

4. The Structural Advantages and Limitations of Meme Coins

Meme coins have structural advantages, with no venture capital unlocking pressure, fair issuance, and complete reliance on attention. This pure hype mechanism is indeed effective in the early cycles.

But this phase seems to be coming to an end.

Certain token generation events and the launch of specific coin types mark the peak of attention for meme coins. After that, the popularity of meme coins began to wane. Even during the rebound in April, the performance of certain public chains was not as good as Ethereum—if most people are already holding, who will be the marginal buyer when the momentum of meme coins weakens?

Some meme coins may still perform well, especially those that have gained popularity through influential figures on platforms outside of Crypto Twitter, such as TikTok or Instagram. These could still bring about asymmetric wealth effects. However, the era of "cute animal coins" as alpha has ended. Only those coins with strong narratives and widespread market recognition possess true speculative value.

5. Future Market Trends

So, if the coin is no longer the opportunity, what will come next?

My view: The combination of AI and Crypto Assets.

If you follow my updates, you will know that most of my operations in this cycle—after some early public chains and venture capital-supported tokens—have focused on meme coins and AI.

Just like the DeFi summer, most early AI projects failed after the hype. However, truly practical projects are quietly being built during this bear market. We have already seen some of these projects appear on the chain.

As the profits from meme coins dry up, attention will naturally shift to new narratives. AI, with its clear practicality, is very well suited to become the next hotspot.

Many AI x Crypto projects adopt a fair issuance model, echoing the narrative of some successful projects recently.

This is why I took the time to study and position myself in this field during the calm weeks. There is no need to rush to establish a full position, but I believe that if the market rises strongly again, this field will hold the greatest asymmetrical opportunities.