Crypto Assets Market Insights and Future Trends Analysis

This weekend, I have more time for in-depth thinking and would like to share some insights about the market.

I believe that the overall trend of the Crypto Assets market will become clearer after September. Considering factors such as macroeconomic resistance, summer liquidity constraints, and quarterly position adjustments, the real market dynamics may only manifest after the August holidays, when market participants return. From recent market activities, the rise of most small coins is mainly due to short squeeze. Traders, influenced by the reflex of the previous rebound, chase short-term momentum but lack support from long-term holders. Most investors have already been frustrated during the previous market turbulence. As expected, most tokens that experienced a sharp rise subsequently underwent the same drastic decline.

Ethereum unexpectedly rebounded, with sectors such as artificial intelligence-related tokens, which were previously hit hardest, leading this wave of recovery. In contrast, tokens with practical use, solid fundamentals, or repurchase mechanisms demonstrated strong resilience, not only performing more steadily during the downturn but also recovering more quickly. From this, we can draw the following insights:

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 the capital supporting Bitcoin is entirely different from previous periods, which is why large-scale Bitcoin liquidation is unlikely to occur unless significantly impacted by macro events.

2. The internal differentiation of altcoins intensifies

In the long run, funds will flow back into the altcoin market, but it will not be comprehensive. Only those tokens with clear use cases and practical application scenarios are likely to attract this funding. This is why Ethereum may outperform other public chains. Regulatory clarity, the increasing adoption of decentralized finance, deflationary structures, and staking demand together create a strong positive cycle. Moreover, due to Ethereum's long-term failure to meet expectations, there are still potential buyers waiting on the sidelines for the right opportunity.

3. Tokens supported by venture capital face structural risks.

Token unlocking will continue to exert pressure on price trends. In the case of insufficient liquidity, the ongoing selling pressure from validators and early investors limits the upside potential. This is why highly valued tokens listed on centralized exchanges have a poor outlook for the future. Tokens from certain ecosystems, in particular, face sustained selling pressure, mainly due to their validator reward structure.

4. The coin has structural advantages.

Meme coins have structural advantages, with no pressure from venture capital unlocks, fair distribution, and are entirely based on attention. This is a pure hype mechanism that has played an important role in early markets.

But I think this stage is coming to an end.

The launch of certain token generation events marked the peak of interest in meme coins. After this, the interest in meme coins began to decline. Even during the rebound in April, the performance of certain public chains was not as good as Ethereum - if everyone has already held, when the momentum of meme coins fades, who will be the marginal buyer?

Some meme coins may still perform well, especially those that have gained popularity through influencers outside the crypto space (such as TikTok or Instagram). These may still bring about asymmetric wealth effects. However, the era of "cute animal coins" as alpha is over. Only those coins with strong narratives and significant market recognition possess true speculative value.

5. Future Market Trends

So, if the meme coin is no longer the main opportunity, what will be next?

My view is: the combination of artificial intelligence and Crypto Assets.

• Just like the DeFi summer, most early AI projects failed after the hype. However, truly practical projects are quietly building during the bear market. We have already seen some projects emerging on the chain.

• As the profits from meme coins dry up, investors' attention will naturally shift to new narratives. AI, with its clear practicality, is likely to become the next hot topic.

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

This is why I spent time researching and positioning myself in this field during the relatively calm weeks in the market. There's no need to rush into establishing a full position now, but I believe that if the market experiences a strong rally again, this field will contain the greatest asymmetric opportunities.