Crypto Assets Market Outlook and Trend Analysis

As the weekend approaches, I have more time to think and share some insights about the market.

I believe the overall trend of the Crypto Assets market will become clearer only after September. Considering the macroeconomic resistance, summer liquidity constraints, and quarterly position adjustments, the real market dynamics may not emerge until after the August holidays when participants return to the market. From recent market activities, it seems that the rise of most small coins has been mainly driven by short squeezes. Traders, influenced by the previous rebound, chase momentum but lack long-term holders. Most investors have already suffered heavy losses previously. As expected, most tokens that surged sharply subsequently experienced equally sharp declines.

Ethereum has seen an unexpected rebound, with sectors that were previously hit hardest, such as AI and certain coins, leading this wave of recovery. In contrast, tokens with real utility, solid fundamentals, or buyback mechanisms have shown resilience, being not only more stable during the downturn but also recovering more swiftly. Syrup, Hype, and AAVE are excellent examples. Although SPX belongs to the coin category, its structure is completely different. From this, we can draw the following insights:

1. The demand for Bitcoin is real and persistent

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

The capital nature supporting BTC is significantly different from past cycles. This is why large-scale BTC liquidations are unlikely to occur unless triggered by macro events.

2. The Internal Differentiation of Altcoins Intensifies

In the end, funds will flow back to altcoins, but not comprehensively. Only tokens with clear use cases and actual application scenarios are likely to attract these funds. This is why I believe Ethereum will outperform other public chains. Clear regulation, increased usage of decentralized finance, a deflationary structure, and staking demand together form a strong virtuous cycle. Additionally, due to ETH not meeting expectations for a long time, there are still marginal buyers waiting in the over-the-counter market.

3. Venture-backed tokens face structural risks

The unlocking of tokens will continue to put pressure on prices. In the case of insufficient liquidity, the ongoing selling pressure from validators and early investors limits the upside potential. This is why I believe that highly valued tokens listed on centralized exchanges have a poor outlook for the future. Tokens from certain ecosystems, in particular, face ongoing selling pressure due to their validator reward structures that lead to this situation.

4. Some tokens have structural advantages

This type of coin has structural advantages, no venture capital unlocks, fair launches, and is entirely based on attention. This is a pure hype mechanism that worked in the first cycle.

But I think this stage is coming to an end.

Certain token generation events and the launch of specific coins mark the peak of interest in such coins. After that, people’s interest in these coins begins to wane. Even during the rebound in April, the performance of certain public chains was not as good as ETH. If everyone already holds a certain token, when the momentum fades, who will become the marginal buyer?

Some coins may still perform well, especially those that have gained popularity through influencers outside the Crypto Assets community, such as TikTok or Instagram. These may bring about asymmetric wealth effects. However, the era of “cute animal coins” as alpha has ended. Only those coins with strong narratives and deep market understanding hold real speculative value.

Ironically, the fatigue and skepticism towards venture-backed tokens have opened the door for fair launch Web2/3 projects, which will become the next wave of wealth generation opportunities.

Some projects are great examples. But to seize these opportunities, you need to be active on the chain. When there is information asymmetry, big opportunities will always arise. Once everyone is aware of something, it no longer yields returns.

This is why I focus more on the on-chain market. The success of certain projects has sparked the desire to find the “next blockbuster,” and capital has begun to chase similar narratives of fair-launch altcoins. Just as some traders have made huge fortunes by trading specific coins, attention guides capital flow.

5. Future Market Trends

So, if certain coins are no longer where the opportunities lie, what will come next?

My view: The combination of AI and Crypto Assets.

If you follow my timeline, you will know that most of my operations in this cycle (after certain early public chains and tokens supported by venture capital) have focused on specific coins and AI.

Just like the DeFi summer, most early AI projects failed after the hype. But the truly practical projects are quietly building in this bear market. We have already seen some of these projects emerging on-chain.

As the profits from certain coins dry up, attention will naturally shift to new narratives. AI, with its clear practicality, is very suitable to become the next hot topic.

Many AI x Crypto projects adopt a fair launch model, echoing the narrative of certain successful projects.

This is why I have been researching and laying out my plans in this area 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 area will contain the greatest asymmetric opportunities.