The current altcoin market resembles coal stocks around 2015—rapid capacity clearance, declining market enthusiasm, and the inability of positive or negative news to stir industry fluctuations. It also faces competition from alternative sectors (like DEX) that are drawing away attention. However, there’s nothing new under the sun. The first principle of investment remains liquidity and value. Hidden within the ruins are goldmines that have been unfairly overlooked. We believe that high-quality projects will shine once the industry completes its consolidation.

In the deep winter of 2018, I visited a photovoltaic power station on the Qinghai Gobi Desert. In the -20°C wind, the chief engineer pointed at rows of idle solar panels and said, "These are relics of the last expansion cycle. New technologies will only emerge after the market clears." Now, gazing at Binance’s altcoin charts, the long-stagnant K-lines bear an uncanny resemblance to those solar panel arrays.

The crypto market is undergoing a cyclical rotation no different from traditional industries. Similar to the photovoltaic industry’s elimination race from 2012 to 2016, the CEX altcoin market has entered a brutal clearing phase: daily trading volumes of many 2021 star projects have fallen below $10 million, and the median FDV (Fully Diluted Valuation) has evaporated by over 70% from its peak. This mirrors the trajectory of photovoltaic, internet, and coal giants falling from hundred-dollar stocks to penny stocks.

Yet, the harshness of cyclical laws often hides generous gifts. Just as LONGi Green Energy bet on monocrystalline silicon technology during the industry’s freezing point, the darkest moments of the altcoin market are now nurturing the momentum for a breakthrough:

1. Valuation Logic Reconstruction: VC’s "Paper Wealth" and Leverage Carnage
At the peak of the 2021 bull market, VCs in the primary market acted like speculators hoarding coal:

• Valuation Bubbles: The median valuation for seed-round projects reached $82 million (Messari 2022 Report), a 16.4x increase from the 2017 cycle (when similar projects were valued at $5 million). This led to tokens being listed on CEXs with valuations already inflated by 10x.

• Leverage Explosions: Institutions like Genesis offered 100% LTV BTC-collateralized loans, creating an arbitrage loop: institutions mortgaged BTC → obtained stablecoins → invested in high-beta tokens. This fueled artificial prosperity. However, with Genesis’ collapse in 2022, collateral values fell below liquidation thresholds, triggering chain liquidations. This "blood transfusion" of funds was severed, turning the altcoin market into a slaughterhouse for primary market dumping.

2. Clearing in Progress: Crypto Industry’s Clearing Cycle Outpaces Traditional Industries
After two years of reshuffling, observable market signals include:

• Market Sentiment Bottoming Out: The average market cap of CEX altcoins has fallen to 2020 levels, with many projects listed between 2022 and 2024 shrinking by over 80%. Retail investor exit rates have hit historical highs, with 90-day active addresses dropping to 12.3% (Santiment), nearing historical lows. The CEX altcoin Fear & Greed Index has remained below 20 for 15 weeks, reaching March 2020 levels.

• Emergence of New Tracks: Despite traditional market makers scaling back, new mechanisms like parent-child coins and on-chain DEX liquidity pools are rebuilding leverage flywheels. AI and Crypto, compliance and Crypto are attempting to foster new industrial momentum.

Conclusion: The current altcoin market is reminiscent of coal stocks around 2015—rapid capacity clearance, declining market enthusiasm, and competition from alternative sectors. However, the first principle of investment remains liquidity and value. Hidden within the ruins are goldmines that have been unfairly overlooked. We believe high-quality projects will shine once the industry completes its consolidation.

The Hidden Battle for Altcoin Capital: CEX Valuation in a Bottoming Phase, Dawn of the DEX New Frontier
1. CEX Dilemma: VC Poison Pills Remain, Clearing Enters Its Second Half
Altcoins on centralized exchanges are essentially the "bag holders" of primary market valuation bubbles:

• Pricing Power Struggle: Projects valued at $1 billion by VCs in 2021 are now only recognized at $100 million in the secondary market, leaving a $900 million "valuation gap" (e.g., a project with a $200 million seed valuation now has a $40 million market cap on Binance).

• Capital Blockage: The $17 billion influx from BTC ETFs has been hindered by tightened risk controls, preventing market makers from leveraging BTC as collateral. Funds are trapped in new trading venues, leaving CEX altcoins as "dried-up riverbeds" in a negative feedback loop of losses.

2. DEX Breakthrough: Revolutionizing Secondary Pricing Power
Decentralized exchanges are rewriting the rules:

• Traditional Path: VC pricing → exchange listing → retail investors buying in.

• Valuation Inversion: On DEXs, retail investors can buy fully circulating tokens at 1/10th the VC price.

• Valuation Reconstruction: DEXs use AMM algorithms for price discovery, with typical project premiums 73.5% lower than CEXs (Dune Analytics). DEXs are siphoning CEX liquidity, creating a new paradigm for asset pricing: community consensus → DEX liquidity proof → CEX passive listing.

• Consensus Fission: When niche concepts (e.g., AI Agent) gain mass consensus through community dissemination, token circulation shifts from "whale vs. retail" (PvP) to "incremental inflows" (PvE). Examples include Virtual, which surged 20x in three months after gaining Grayscale’s attention, and AI16Z, which attracted traditional tech capital by mimicking a16z’s investment logic.

Core Logic: CEXs are like "state-owned enterprises shedding burdens," while DEXs are like "private enterprises going public through backdoors"—the former waits for policy rescues, the latter relies on grassroots movements.

CEX vs. DEX: Two Survival Rules, Two Wealth Codes
1. CEX Strategy

• Cigarette Butt Stocks: Focus on projects with $50M-$200M market caps, real products, and communities, and avoid "penny stocks" (daily trading < $1M).

• Awaiting Industry Cycles: Drawing parallels to coal stocks, position in 2025-2026 and wait for liquidity easing cycles to realize returns. Target core industry trends (e.g., buying MKR at $200 in 2020 and selling at $6,000 in 2021).

• Liquidity Arbitrage: In continuous market conditions, fully circulating tokens often exhibit linear changes across CEXs, presenting mispricing opportunities during sentiment lows. ETH, for instance, offers significant mispricing opportunities under the same dollar liquidity system as Bitcoin.

2. DEX Strategy

• Early Sniping:

  • $5M-$20M market cap: Focus on team background, GitHub code/product quality, and token accumulation/distribution signals.

  • $20M-$50M market cap: Anticipate CEX listings (e.g., a DeFi project surged 300% on DEX after being added to Binance’s watchlist).

• Community Empowerment: Monitor meme coin consensus-building. For instance, in the AI Agent sector, a 1-unit increase in the SocialFi index (social mentions/market cap) correlates with 47.8% excess returns (LunarCrush data), capturing the PvP-to-PvE inflection point.

Conclusion
At dusk in the Qinghai photovoltaic base, next-generation bifacial modules are storing energy under the sunset glow. The altcoin market is a massive goldmine, but most enter with dreams of striking gold and leave with rubble.

The gears of the crypto market’s cycles never stop turning. Projects that hone their tools during the winter will eventually shine the brightest at the dawn of liquidity. What we must do is calibrate our compasses when others abandon the mine and stockpile ammunition before the industry awakens. Only by combining the patience of a miner, the boldness of a gambler, and the precision of an accountant can we unearth real gold from the ruins. Remember: Bull markets are stages for cashing in profits, while bear markets are battlefields for accumulating chips—and now is the golden moment to pick up the basket and start collecting. We remain firmly optimistic about the ETH/BTC trading opportunities and the golden timing for altcoin accumulation in the coming year.

The current altcoin market resembles coal stocks around 2015—rapid capacity clearance, declining market enthusiasm, and the inability of positive or negative news to stir industry fluctuations. It also faces competition from alternative sectors (like DEX) that are drawing away attention. However, there’s nothing new under the sun. The first principle of investment remains liquidity and value. Hidden within the ruins are goldmines that have been unfairly overlooked. We believe that high-quality projects will shine once the industry completes its consolidation.

In the deep winter of 2018, I visited a photovoltaic power station on the Qinghai Gobi Desert. In the -20°C wind, the chief engineer pointed at rows of idle solar panels and said, "These are relics of the last expansion cycle. New technologies will only emerge after the market clears." Now, gazing at Binance’s altcoin charts, the long-stagnant K-lines bear an uncanny resemblance to those solar panel arrays.

The crypto market is undergoing a cyclical rotation no different from traditional industries. Similar to the photovoltaic industry’s elimination race from 2012 to 2016, the CEX altcoin market has entered a brutal clearing phase: daily trading volumes of many 2021 star projects have fallen below $10 million, and the median FDV (Fully Diluted Valuation) has evaporated by over 70% from its peak. This mirrors the trajectory of photovoltaic, internet, and coal giants falling from hundred-dollar stocks to penny stocks.

Yet, the harshness of cyclical laws often hides generous gifts. Just as LONGi Green Energy bet on monocrystalline silicon technology during the industry’s freezing point, the darkest moments of the altcoin market are now nurturing the momentum for a breakthrough:

1. Valuation Logic Reconstruction: VC’s "Paper Wealth" and Leverage Carnage
At the peak of the 2021 bull market, VCs in the primary market acted like speculators hoarding coal:

• Valuation Bubbles: The median valuation for seed-round projects reached $82 million (Messari 2022 Report), a 16.4x increase from the 2017 cycle (when similar projects were valued at $5 million). This led to tokens being listed on CEXs with valuations already inflated by 10x.

• Leverage Explosions: Institutions like Genesis offered 100% LTV BTC-collateralized loans, creating an arbitrage loop: institutions mortgaged BTC → obtained stablecoins → invested in high-beta tokens. This fueled artificial prosperity. However, with Genesis’ collapse in 2022, collateral values fell below liquidation thresholds, triggering chain liquidations. This "blood transfusion" of funds was severed, turning the altcoin market into a slaughterhouse for primary market dumping.

2. Clearing in Progress: Crypto Industry’s Clearing Cycle Outpaces Traditional Industries
After two years of reshuffling, observable market signals include:

• Market Sentiment Bottoming Out: The average market cap of CEX altcoins has fallen to 2020 levels, with many projects listed between 2022 and 2024 shrinking by over 80%. Retail investor exit rates have hit historical highs, with 90-day active addresses dropping to 12.3% (Santiment), nearing historical lows. The CEX altcoin Fear & Greed Index has remained below 20 for 15 weeks, reaching March 2020 levels.

• Emergence of New Tracks: Despite traditional market makers scaling back, new mechanisms like parent-child coins and on-chain DEX liquidity pools are rebuilding leverage flywheels. AI and Crypto, compliance and Crypto are attempting to foster new industrial momentum.

Conclusion: The current altcoin market is reminiscent of coal stocks around 2015—rapid capacity clearance, declining market enthusiasm, and competition from alternative sectors. However, the first principle of investment remains liquidity and value. Hidden within the ruins are goldmines that have been unfairly overlooked. We believe high-quality projects will shine once the industry completes its consolidation.

The Hidden Battle for Altcoin Capital: CEX Valuation in a Bottoming Phase, Dawn of the DEX New Frontier
1. CEX Dilemma: VC Poison Pills Remain, Clearing Enters Its Second Half
Altcoins on centralized exchanges are essentially the "bag holders" of primary market valuation bubbles:

• Pricing Power Struggle: Projects valued at $1 billion by VCs in 2021 are now only recognized at $100 million in the secondary market, leaving a $900 million "valuation gap" (e.g., a project with a $200 million seed valuation now has a $40 million market cap on Binance).

• Capital Blockage: The $17 billion influx from BTC ETFs has been hindered by tightened risk controls, preventing market makers from leveraging BTC as collateral. Funds are trapped in new trading venues, leaving CEX altcoins as "dried-up riverbeds" in a negative feedback loop of losses.

2. DEX Breakthrough: Revolutionizing Secondary Pricing Power
Decentralized exchanges are rewriting the rules:

• Traditional Path: VC pricing → exchange listing → retail investors buying in.

• Valuation Inversion: On DEXs, retail investors can buy fully circulating tokens at 1/10th the VC price.

• Valuation Reconstruction: DEXs use AMM algorithms for price discovery, with typical project premiums 73.5% lower than CEXs (Dune Analytics). DEXs are siphoning CEX liquidity, creating a new paradigm for asset pricing: community consensus → DEX liquidity proof → CEX passive listing.

• Consensus Fission: When niche concepts (e.g., AI Agent) gain mass consensus through community dissemination, token circulation shifts from "whale vs. retail" (PvP) to "incremental inflows" (PvE). Examples include Virtual, which surged 20x in three months after gaining Grayscale’s attention, and AI16Z, which attracted traditional tech capital by mimicking a16z’s investment logic.

Core Logic: CEXs are like "state-owned enterprises shedding burdens," while DEXs are like "private enterprises going public through backdoors"—the former waits for policy rescues, the latter relies on grassroots movements.

CEX vs. DEX: Two Survival Rules, Two Wealth Codes
1. CEX Strategy

• Cigarette Butt Stocks: Focus on projects with $50M-$200M market caps, real products, and communities, and avoid "penny stocks" (daily trading < $1M).

• Awaiting Industry Cycles: Drawing parallels to coal stocks, position in 2025-2026 and wait for liquidity easing cycles to realize returns. Target core industry trends (e.g., buying MKR at $200 in 2020 and selling at $6,000 in 2021).

• Liquidity Arbitrage: In continuous market conditions, fully circulating tokens often exhibit linear changes across CEXs, presenting mispricing opportunities during sentiment lows. ETH, for instance, offers significant mispricing opportunities under the same dollar liquidity system as Bitcoin.

2. DEX Strategy

• Early Sniping:

  • $5M-$20M market cap: Focus on team background, GitHub code/product quality, and token accumulation/distribution signals.

  • $20M-$50M market cap: Anticipate CEX listings (e.g., a DeFi project surged 300% on DEX after being added to Binance’s watchlist).

• Community Empowerment: Monitor meme coin consensus-building. For instance, in the AI Agent sector, a 1-unit increase in the SocialFi index (social mentions/market cap) correlates with 47.8% excess returns (LunarCrush data), capturing the PvP-to-PvE inflection point.

Conclusion
At dusk in the Qinghai photovoltaic base, next-generation bifacial modules are storing energy under the sunset glow. The altcoin market is a massive goldmine, but most enter with dreams of striking gold and leave with rubble.

The gears of the crypto market’s cycles never stop turning. Projects that hone their tools during the winter will eventually shine the brightest at the dawn of liquidity. What we must do is calibrate our compasses when others abandon the mine and stockpile ammunition before the industry awakens. Only by combining the patience of a miner, the boldness of a gambler, and the precision of an accountant can we unearth real gold from the ruins. Remember: Bull markets are stages for cashing in profits, while bear markets are battlefields for accumulating chips—and now is the golden moment to pick up the basket and start collecting. We remain firmly optimistic about the ETH/BTC trading opportunities and the golden timing for altcoin accumulation in the coming year.