Crypto Assets Market Outlook and Future Trend Analysis

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

The overall direction of the Crypto Assets market is expected to become clearer only after September. Considering factors such as macroeconomic resistance, limited summer liquidity, and quarterly position adjustments, the real market dynamics may only emerge after the August holiday ends and market participants return. From recent market activities, the rise of most small coins is mainly due to short squeezes. Traders, influenced by previous rebounds, are chasing prices, but lack support from long-term holders. Most investors have already suffered significant losses. As expected, most of the tokens that surged dramatically subsequently experienced severe corrections.

Ethereum has unexpectedly rebounded, with the most severely hit sectors such as artificial intelligence and certain coins leading this wave of recovery. In contrast, tokens with practical use, solid fundamentals, or buyback mechanisms have shown strong resilience, being not only more stable during the downturn but also recovering faster. From this, the following insights can be drawn:

1. Bitcoin demand remains stable

Traditional capital is gradually entering the market through regulated channels such as ETFs. The nature of the capital supporting Bitcoin is significantly different from previous periods, which is also why large-scale Bitcoin liquidations are unlikely to occur unless influenced by major macro events.

2. The differentiation of small coins is intensifying.

In the long run, funds will flow back to small coins, but not comprehensively. Only those tokens with clear use cases and practical application scenarios are likely to attract funds. This is why Ethereum may perform better than some competitors. Regulatory clarity, increased usage of decentralized finance, deflationary structures, and staking demand together create a strong positive feedback loop. Additionally, since Ethereum has not met expectations for a long time, there are still potential buyers waiting in the over-the-counter market for opportunities.

3. Tokens supported by venture capital face structural challenges

Token unlocks will continue to exert 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 highly valued tokens listed on centralized exchanges may not be an ideal choice in the future. Tokens from certain ecosystems are particularly facing ongoing selling pressure, which stems from their validator reward structure.

4. The coin has structural advantages.

Meme coins typically do not face the pressure of venture capital unlocks, adopting a fair issuance model that is entirely based on attention. This is a purely speculative mechanism that has played a role in the early cycles.

However, this phase seems to be coming to an end. Certain token generation events and the launch of specific coins may mark the peak of interest in these coins. After that, interest in such coins begins to wane. Even during the rebound in April, the performance of certain coins was not as good as that of Ethereum.

Some meme coins may still perform well, especially those that have gained popularity through influential figures on social media platforms outside of Crypto Assets, such as short video platforms or image-based social networks. These may still bring about asymmetric wealth effects. However, the era of relying solely on the "cute animal" concept as an investment basis is over. Only those coins with strong narratives and broad market recognition have real speculative value.

5. Future Market Trends

If the coin is no longer the main opportunity, then what is the next hotspot?

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

Just like the wave of decentralized finance, most early artificial intelligence projects failed after the hype. However, projects that are truly based on practicality are quietly building during this bear market. We have already seen some of these projects emerging on-chain.

As the hype around meme coins cools down, market attention will naturally shift to new narratives. Artificial intelligence, with its clear practicality, is likely to become the next focal point.

Many projects that combine artificial intelligence with Crypto Assets adopt a fair issuance model, echoing the narrative of certain successful projects.

This is why I have been spending time researching and positioning myself in this field during the relatively calm market recently. Although there is no need to rush to establish a full position right now, I believe that if the market experiences a strong rise again, this field will hold the greatest asymmetric opportunities.