The New Dilemma of the Crypto Assets Market: Why This Cycle is More Challenging than Before?

In the current Crypto Assets cycle, participants face unprecedented challenges. Each new cycle is tougher than the last, competition is fiercer, and there are more experienced players. If one does not hold a significant amount of Bitcoin or Solana during the bear market, they are likely to fall into a loss situation.

So, why is this cycle so difficult? Here are a few main reasons:

1. Post-Traumatic Stress Reaction

In the past two large altcoin cycles, most coins experienced a 90-95% crash. The Luna and FTX incidents have dealt a severe blow to the entire industry, causing prices to fall below reasonable levels. This trauma has left a deep psychological shadow on veteran players in the Crypto Assets space.

Nowadays, very few people are willing to hold any assets for the long term, as they do not want to suffer significant losses anymore. The emotions of market participants are more volatile, and everyone is constantly looking for the peak of the cycle.

This psychological impact is reflected not only in trading behavior but also affects the construction of the entire ecosystem and investment methods. Projects face stricter scrutiny, and the trust threshold has significantly increased. This has both positive effects and negative impacts: while it helps filter out obvious scams, it also makes it harder for legitimate projects to gain attention.

2. Lack of Innovation

Although there are still iterative innovations and infrastructure improvements, there is a lack of breakthrough progress from 0 to 1 like DeFi. This gives critics more reasons to attack the Crypto Assets for lacking substantial progress.

The innovative model has shifted from revolutionary breakthroughs to incremental improvements. While this is a natural process for the development of any technology, it poses a challenge for a narrative-driven market.

We still lack a killer application that can bring Crypto Assets to hundreds of millions of on-chain users.

3. Regulatory Pressure

The actions of regulatory agencies have severely hindered the development of the industry, especially in some areas with great potential like DeFi(. They have also prevented all governance coins from passing value to holders, fueling the claim that "these coins are useless."

Regulatory pressure has caused some top developers to leave the industry, hindering the interaction between traditional finance and the Crypto Assets industry. This has forced projects to rely more on venture capital financing, resulting in poor supply and price discovery mechanisms, with value being captured by a few.

4. Financial Nihilism Prevails

The aforementioned factors have collectively led to the rise of financial nihilism in this cycle. The situation of "useless governance tokens" and the high FDV and low circulation caused by regulation have prompted many Crypto Assets natives to turn to meme coins in search of "fairer" opportunities.

In today's society, asset prices are skyrocketing, fiat currencies are depreciating, wage growth is slow, and young people have to resort to speculation to achieve financial freedom. Meme coin lotteries have therefore become extremely attractive. Lotteries always have a market because they bring hope.

Due to the product-market fit of gambling in Crypto Assets, coupled with our advancements in gambling technology ) such as Solana and Pump.fun (, the number of tokens issued has surged. This is because many people want to engage in high-risk speculation. The demand is indeed present.

The term "trench" has been very popular in the Crypto Assets circle, but in this cycle, it has become a widely understood term.

This nihilistic attitude is reflected in the following aspects:

• The rise of "fallen" culture has become mainstream.
• Investment cycle shortened
• Focus more on short-term trading rather than long-term investment
• Extreme leverage and risky behaviors have become common
• Have a "whatever" attitude towards fundamental analysis

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5. Past experiences become obstacles

Experience from previous cycles has taught people that they can buy some altcoins during a bear market and ultimately gain returns by outperforming Bitcoin.

Most people are not excellent traders, so this was the best choice in the past. Overall, even the worst-performing alternative coins have opportunities.

But this cycle is more suitable for traders rather than holders. Traders even gained the maximum profit through speculating on airdrops. The first speculation cycle of the AI Agent is an example. This might be the first time people feel "this is the new thing we've been looking for." However, this is still in the early stages, and long-term winners may not have emerged yet.

6. Bitcoin has new buyers, altcoins do not

The differentiation of Bitcoin from other assets has never been so obvious.

Bitcoin has first gained strong demand from traditional finance. It now has an incredible new source of passive demand, with central banks even discussing incorporating it into their balance sheets.

Altcoins are facing tougher competition against Bitcoin than ever before, which is understandable given that Bitcoin has a clear goal with a market value comparable to gold.

Shitcoins indeed lack new buyers. Although some retail investors returned when Bitcoin hit new highs at ), they bought XRP(, but overall, the inflow of new retail investors is insufficient, and there are still reputation issues with Crypto Assets.

7. The Role Transition of Ethereum

The decline of Bitcoin's dominance is largely influenced by the growth in the market capitalization of Ethereum. Many believe that the trigger for the "altcoin season" is the rise of Ethereum, but this heuristic approach has not worked so far in this cycle, as Ethereum has performed poorly due to fundamental reasons.

In the long run, fundamentals will eventually play a role, but you must truly understand the projects you support and how they surpass Bitcoin. Currently, only a few projects meet this standard.

Looking for projects with the following characteristics:

• Clear revenue model
• Actual product-market fit
• Sustainable Token Economic Model
• A strong narrative to complement the fundamentals ) AI and RWA are the right direction (

With the relaxation of U.S. regulations, projects with stronger fundamentals and market fit can ultimately add value to their tokens, making them lower-risk investment options. Income-generating protocols have now been established and are performing well. This is very different from the "greater fool" theory that previously dominated many token models.

![Why is this cycle so difficult with the imitation season not arriving?])https://img-cdn.gateio.im/webp-social/moments-189167f7963ab1ce507e51ac22c85263.webp(

You can choose to become a better trader by focusing on making more short-term trades, as this market indeed offers many consistent short-term opportunities. On-chain trading will provide greater multiples, but the tolerance for downside risk will also be lower.

For most people without obvious advantages, a dumbbell investment portfolio remains a viable approach. Allocate 70-80% of funds to Bitcoin and Solana, with the remaining funds for more speculative investments. Regularly rebalance to maintain these ratios.

You need to understand how much time you can invest in Crypto Assets and adjust your strategy accordingly. If you are an ordinary person with a job, it is unrealistic to compete with young people who spend 16 hours a day in this field. This time, passively holding poorly performing altcoins and waiting for the right moment won't work either.

Another strategy is to try to combine different areas. Build a robust asset base investment portfolio, then consider participating in airdrops ). Now it's harder but lower-risk opportunities still exist (, or identify emerging ecosystems and layout early ) such as HyperLiquid, Movement, Berachain, etc. (, or focus on specific categories.

This year, there is still growth potential in the altcoin market. The current situation has become clear; we are still closely related to global liquidity, but only a few industries and a limited number of altcoins will truly be able to surpass Bitcoin and Solana. The rotation speed of altcoins will continue to accelerate.

If large-scale monetary easing occurs, we may see a situation closer to the traditional altcoin season, but this possibility is low. Even in this case, most altcoins can only provide market average returns. This year, we will still see the rise of some large altcoins, and liquidity will continue to disperse.

![Why is this cycle so difficult and why is the altcoin season delayed?])https://img-cdn.gateio.im/webp-social/moments-3dd205ac93f450c9d148da0d6b541fa5.webp(