Title: The Importance of Attention in Crypto Investments
There is a legend in the market that certain diamond hands can achieve substantial returns, suggesting that achieving financial freedom is as simple as buying and waiting. However, when it comes to personal practice, being a diamond hand requires a high level of personal willpower. People often say that “the rewards of waiting are bountiful,” but in reality, most of the time, people end up realizing that others have reaped the rewards while they are left with only dust in their hands.
Compared to the relatively stable BTC, more people choose to hold a variety of “value coins” in the hope that their holdings of altcoins will one day be recognized for their value and generate returns surpassing the overall market. However, recently, renowned DeFi OG Ignas (@DefiIgnas) expressed through a tweet that choosing to hold altcoins solely based on their fundamentals is not reliable.
The cryptocurrency industry does not believe in fundamental investments, just as people in Beijing, Shanghai, and Guangzhou do not believe in tears. Ignas, who has solid fundamental projects like Brave browser and its $BAT token in his portfolio, exemplified this point. Brave currently has around 73 million active users and raised a substantial $40 million in funding back in 2016 and 2017. The product is reasonable and technically sound, making Brave an undoubtedly successful crypto project. However, the price of $BAT has not experienced significant growth and remains similar to its initial price in 2017, while $ETH has skyrocketed from $250 to $3900 during the same period.
Ignas openly admitted that he had high hopes for $BAT and even mentioned it being his largest altcoin holding at one point. Although he sold all his $BAT holdings near its peak, the price trend of $BAT still provided some insights: success in product development does not necessarily translate into excellent long-term token price performance. The truth that “high performance supports high stock prices” in traditional financial markets is not applicable here. Furthermore, buying based on high performance and good data may lead to disastrous outcomes.
Ignas also considered whether the token’s price was suppressed due to token unlocks, but unfortunately, $BAT is now fully circulating and has no further issuance.
In conclusion, Ignas advised against easily believing in any project’s long-term holding promises, especially when it comes to altcoins. It is crucial to regularly adjust portfolios and carefully select investment targets.
Following Ignas’s tweet, there were some interesting discussions in the comments section. Some suggested that the poor price performance of $BAT may be due to the team focusing more on project development rather than marketing. Ignas also mentioned in the comments that attention is everything in the crypto world, and the team should consider engaging Key Opinion Leaders (KOLs) to promote $BAT and establish a stronger community to enhance its market awareness.
Indeed, $BAT is a classic representation of a “value coin” with excellent project fundamentals and full token circulation. It seems like this undervalued golden egg only lacks its value being discovered by the market, leading to a frenzy of buying and price surges. However, the harsh reality is that if someone held $BAT for seven years, their personal gains would already have been left far behind by the overall market.
Unlike traditional Web2 projects, which focus on technical composition, user data, and funding background, the crypto market’s attention is driven by factors such as hype, celebrity endorsements, and even projects being targeted by critics. Persistently adhering to traditional “fundamental investments” and waiting for value discovery may be holding on to outdated strategies.
MEMECOIN can be considered the most direct destroyer of fundamental investments in the crypto market. The reason everyone loves MEMECOIN is straightforward: it’s easy to understand and can be pumped up easily. Due to its early fair chip distribution mechanism and various unique cultures, MEMECOIN has always had an image of fairness and fun in people’s minds.
However, looking at the numerous price manipulation incidents involving MEMECOIN, it is evident that large capital entities are also unwilling to miss out on the potential of MEME as a new money-making opportunity. Many MEMECOINs are manipulated by large institutions. See our other report for more details: “Collective Misbehavior? Insiders Expose Polygon Executives’ Malicious Manipulation of Meme Coin Prices.”
An analysis of current crypto assets is shown in a chart, illustrating the different nature of cryptocurrencies. On one end, there are entertainment-driven, speculative MEMECOINs, and on the other end, there are mundane, practical RWA assets.
The choice between interesting and useful seems to reflect the different preferences of retail investors (C-end) and institutions (B-end). Retail investors prefer a retail-driven market that is fueled by high speculation and entertainment, as seen in the MEMECOIN craze and the 2023 AI bubble. On the other hand, institutions tend to focus on practical markets that comply with regulations, such as BTC/ETH ETFs and RWA assets. However, despite appearing to go in different directions, they ultimately converge.
Phantom, with its high download numbers in various countries’ Google markets, has sparked a MEME frenzy that has spread worldwide. The freedom, randomness, and chaos associated with MEME culture make retail investors willing to pay for this added value. People from all walks of life want to get involved, whether it’s political MEMEs, celebrity MEMEs, or Pump.Fun live broadcasts. Everything can be turned into a MEMECOIN, and various indicators of people and things are reflected in the fluctuation of MEME coin prices, creating a paradise where influence and traffic turn into reality.
Even from the perspective of traditional institutional investors, their attitude reveals that they have shifted from dismissing and questioning crypto assets to rushing to launch BTC/ETH ETFs. “Regulation” has transformed from being the sword of Damocles hanging over the crypto market to becoming a catalyst for a bull market. In the current US election, the crypto market has even become a weight for candidates to campaign with.
From “considering it useless” to “having to use it,” attention has always been the driving force behind cryptocurrencies, from the wild west to the mainstream. The logic of investment in the crypto industry differs significantly from traditional financial markets, and the concept of “fundamentals” has a completely different meaning when there is or isn’t tangible performance support.
Retail investors have been deceived by fundamental investment stories, leading them to choose the straightforward and aggressive MEMECOIN. Do institutions genuinely prefer utility coins because of the projects’ fundamentals? That might not necessarily be the case. Institutions can indeed recognize the value of MEMECOINs, but they themselves cannot justify investing in a meme coin or a cat token.
Investors may also prefer institutions to invest in more “serious” assets, so the concept of fundamentals becomes a packaging for serious investments.
Therefore, perhaps no one is truly engaged in pure fundamental investments, and it is only that retail investors are more direct, while institutions are more circuitous. Therefore, the smart approach is to embrace both MEME trading and infrastructure development.
For example, Jupiter, which started as a MEME amusement park, is now expanding to dominate the market. It has established the GUM alliance, bringing together multiple projects and institutions. Whether it’s MEMECOINs, RWA, stocks, or forex, Jupiter is all-inclusive, focusing on being a hybrid.
In this bull market, the market is no longer in a simple mode, and all participants have evolved. Fundamental investments with a simple structure are becoming less effective. Lessons from history show that some fundamental investments fail to yield returns higher than inflation, and even strong fundamental projects can head towards zero. The market’s investment logic is gradually changing, and fundamental investments are no longer as politically correct as before.
Of course, if the time cost is infinitely extended, value discovery investments may lead to different conclusions. However, retail investors cannot afford to wait that long.
In the rapidly evolving crypto market, what is abundant is new hotspots, and what is valuable is attention. The driving force in the market has changed, and projects have little time left for value discovery. Renowned blogger @redphonecrypto also pointed out in a recent article that a token’s ability to attract attention is more important than any other indicators. The stronger the ability to attract attention, the greater the potential for price increases.
“Pumpmental > Fundamental” has become the consensus of the majority. For retail investors who have put in their hard-earned money, pumping is the best fundamental.
This article is authorized for reprinting from Deep Tide TechFlow.
