Value investment in the cryptocurrency world returns to zero: attention is everything

Written by: TechFlow

The market always circulates the legend that a certain diamond hand has obtained a rich return. It seems that there are only two simple steps to achieve financial freedom: buy and wait.

But when it comes to personal practice, being a diamond hand requires a very high personal will. People always say "waiting is rewarding".

But the reality is that most of the time: waiting and waiting find that others' rewards are rich, and when you open your hands at the end, you find that there is only a handful of dust that disappears with the wind.

Compared to BTC, which has less volatility, more people choose to hold a variety of "value coins" for a long time, hoping that the value of the altcoins they hold will be discovered one day, and they will get returns far exceeding the market.

But recently, the well-known Defi OG Ignas (@DefiIgnas) said in a tweet: It is not reliable to choose to hold altcoins for a long time just because you are optimistic about the fundamentals.

The currency circle does not believe in fundamental investment, just as Beijing, Shanghai and Guangzhou do not believe in tears.

Fundamental investment, basically no money

Ignas gave an example of the Brave browser and its $BAT token, which have solid fundamentals in the previous cycle:

Brave currently has about 73 million active users, and as early as 2016 and 2017, it raised a high amount of US$40 million. The product is reasonable and the technology is solid. From the perspective of a reliable encryption project, Brave is undoubtedly successful.

However, the price of $BAT has not increased significantly. Today, the price of $BAT is similar to that when it was first issued in 2017. During the same period, $ETH has already risen from US$250 to US$3,900.

Ignas said frankly that he was very optimistic about the vision of $BAT and said that this was once his largest position in the altcoin. Although he sold all of it near the high point, the price trend of $BAT still brought some inspiration: product success does not necessarily translate into long-term excellent price performance of tokens.

The truth that "high performance supports high stock prices" in the traditional financial market seems unworthy of mention here; at the same time, paying for high performance and good data may end badly.

Ignas also considered whether the price of the coin was suppressed due to the unlocking of the token, but unfortunately, $BAT is now in full circulation and there is no additional issuance.

Finally, Ignas' advice is not to easily believe in any project's long-term holding commitments, especially for altcoins, it is very important to adjust positions in time and carefully choose investment targets.

Attention is the fundamentals

After Ignas' tweet was sent out, there were some interesting discussions in the comment area:

Some people suggested that the dismal price performance of $BAT may be because the team focused its funds on project research and development and lacked project marketing. At the same time, there are not many tweets mentioning tokens from the official tweets.

Ignas also said in the comment area that attention is everything in the crypto world, and the team should perhaps invite some KOLs to promote $BAT and build a stronger community to enhance the market awareness of $BAT.

Yes, $BAT is the classic representative of "value coin": excellent project fundamentals, full circulation supply of tokens, such an extremely undervalued golden egg seems to be only discovered by the market value, and finally ushered in a wave of crazy buying and rising.

But the cold reality is: if a diamond hand holds $BAT for 7 years, then the personal income has long been far behind the market.

Unlike traditional Web2 projects that value the technical composition, user data and financing background of the project, sector effects, celebrity shouting and even project hacking can become the "fundamentals" of crypto projects to attract retail investors' attention.

Blindly sticking to the old-fashioned "fundamental investment" and waiting for value discovery is a bit clinging to the old.

Retail investors love "interesting", institutions want "useful"

MEMECOIN can be said to be the most direct fundamental destroyer in the crypto market. The reason why everyone loves MEMECOIN is very straightforward: you can understand it at a glance, and you can pull it up if you say so.

Due to the early fair chip distribution mechanism and various unique cultures, MEMECOIN has always had a fair and interesting image in people's minds.

However, judging from the various MEMECOIN price manipulation incidents that have been constantly exposed, it is clear that large capitals are unwilling to let go of MEME, the emerging money hotspot, and there are traces of large institutional manipulation behind many MEMECOINs.

There is a picture that makes a simple analysis of current crypto assets:

This picture shows the different natures of the two ends of crypto assets: one end is entertainment to death and crazy speculation represented by MEMECOIN, and the other end is boring practical assets represented by RWA assets.

Interesting and useful seem to be different choices for retail investors and institutions.

C-side retail investors prefer retail-driven markets driven by high speculation and fun, represented by the MEMECOIN craze and the AI ​​bubble in the fourth quarter of 2023, while the B-side represented by institutions prefers to focus on practical markets that meet regulatory requirements, such as BTC/ETH ETF + RWA assets.

But seemingly parting ways, they actually end up in the same place.

Phantom ranks among the top downloads in the Google market in many countries and regions. The MEME craze driven by retail investors has spread all over the world. The entertainment attributes of freedom, unwarrantedness, chaos, etc. contained in MEME culture also make retail investors happy to pay for this added value.

Even people from all walks of life want to get a piece of the pie, political MEME, celebrity MEME, Pump.Fun live broadcast... Everything can be MEME, no matter how fancy it is, all kinds of indicators to measure people and things are transformed into the rise and fall of MEME currency prices, a paradise for influence and traffic carnival monetization.

And it can be seen from the attitude of old money institutions, from slandering and questioning crypto assets to scrambling to grab BTC/ETH ETF, and "regulation" has also changed from the sword of Damocles hanging over the crypto market to the catalyst of the bull market. In the current US election, the crypto market has become a weight for candidates to canvass votes.

From "thinking it is useless" to "having to use it", attention runs through the process of cryptocurrency from wild roads to regular troops.

In the crypto industry, the investment logic is very different from that of the traditional financial market; and the so-called fundamentals, when there is real performance support or not, its meaning is completely different.

Retail investors are deceived by the fundamentals story too much, so they will naturally choose the simple and crude MEMECOIN; is the preference of institutions for utility coins really because of the fundamentals of the project? Not necessarily.

Institutions can naturally see the value of MEMECOIN, but as for the investment in MEMECOIN, the institutions themselves cannot explain it well to investors. They can't say that I invested in an emoticon package/a cat, right?

Investors may also prefer institutions to invest in some more "serious" assets, so the fundamentals have become a packaging for serious investment.

So, maybe no one is really doing pure fundamental investment, but retail investors are more direct and institutions are more circuitous.

Therefore, speculating on MEME and infrastructure are not contradictory, and the smart way to play should be to accept them all.

For example, Jupiter, which started as a MEME amusement park, began to unify the market and formed the GUM Alliance with many projects and institutions. Whether it is MEMECOIN, RWA, stocks or foreign exchange, it is all about meat and vegetables, and the main focus is on omnivorous food.

With both MEME and "fundamental" assets, Jupiter's inclusiveness of various assets also reflects the business logic of not only focusing on fundamentals.

Viewpoint

In this round of bull market, the market is no longer a simple model. All participants have evolved, and simple fundamental investments are becoming increasingly difficult to work.

From the lessons learned from history, the returns of some fundamental investments have not even outperformed inflation, not to mention that some strong fundamental projects are heading straight for zero. The logic of market investment is gradually changing, and fundamental investment is no longer as politically correct as before.

Of course, if the time cost is infinitely extended, there may be another conclusion for value discovery investment.

But retail investors can't afford it.

In the currency circle where information hotspots are rapidly iterating, the most lacking is new hotspots, and the most valuable is attention. The market driving force has changed, and the project's grasp of market attention can often strongly affect the price of tokens. The importance of attention economics has gradually become prominent, and the market has little time left for projects to be slowly discovered by value.

「Pumpmental > Fundamental」is already the consensus of most people. For retail investors who pay real money, pumping the market is the best fundamental.