Is The Recent Risky Crypto Market Worth Considering?

At the beginning of 2023, we experienced dozens of times the skyrocketing price of meme coin Bonk, 10 times the market price of artificial intelligence coins such as AGIX and FET, and the main narrative of LSD, which can be described as brilliant. Here is a review of the January projects from the perspective of narrative economics.

The marketing narrative of memes

Bonk is a project that was born after the Solana public chain was silent for more than a month after being affected by the FTX thunderstorm. At Christmas, most members of the Solana community received an airdrop of BONK tokens, which subsequently became a hot topic of conversation and Twitter among community members.

The community even made a BONK meme game, a Shiba Inu holding a baseball bat and hitting SBF’s head, you can start the game by spending BONK tokens. Perhaps, this catharsis has resonated with the community to a certain extent. Tokens have also risen dozens of times, with a maximum market value of more than $300 million.

How does Bonk’s success sum up our path to finding the next meme alpha?

From a marketing point of view, it can be classified into the following points:

• Use the occasion to market. Leveraging the topic attribute and traffic attribute of the hot event of “mocking Alameda economics and beating Sam violently”, let it become a vehicle, carrying Bonk and radiating to the entire currency circle at an appropriate speed. The same similar cases, such as the 10,000-fold currency DogeKing in 2022, took advantage of Shen Teng’s Spring Festival Gala sketch, and under the strong exposure of the media, it can quickly radiate to the entire currency circle and even outsiders.
• Precise marketing airdrops to large accounts, precise targeting of target customers, and completion of the cold start of the project. The same similar example, cult, which will skyrocket 300 times in two months in 2022, was born under such circumstances.
• Integrate resources and hold them together for warmth. The launch of Bonk has won the support of many sol chain ecological projects.

A successful meme = take advantage of hot event marketing + community cold start + resource background support (KOLs/celebrity/project partners)

Finding undervalued assets through asset pricing models is the most common investment logic in traditional markets. Memes, narratives, and speculation, although they seem to have no intrinsic value on the surface, are actually because elements such as emotions, feelings, and hype cannot be measured by existing financial models. With the development of time, the meme economy, narrative economy will derive a set of special value measurement standards.

George Soros said that the economic history of the world is a series based on illusions and lies. The way to get rich is to recognize its illusion, play in it, and get out of the game before the illusion is recognized by the public.

AI is the long-term narrative for all of humanity

Artificial intelligence, as the biggest long-term narrative since the metaverse and Web3, has reached a climax with the advent of phenomenal products such as chatgpt. Since October last year, it has attracted countless Web2 investors. At Sequoia Capital, Microsoft with the help of such giants, 2023 became “the big year for AI”. On January 10, Microsoft invested $10 billion in OpenAI at a valuation of $29 billion.

As a leading indicator of US stocks, the currency circle will inevitably become a capital reservoir for the overflow of capital fomo emotions.

According to the time machine investment rules, Roblox will be listed with a market value of over $45 billion in 2021. Facebook announced the name change to Meta, which will lead to a 10-fold increase in metaverse concept coins such as SAND, MANA in the crypto market. You can think of FET in the currency market as Binance Launchpad project may replicate sand’s ascending path.

In January, Roblox, a metaverse concept stock, had a market value of $20 billion, artificial intelligence leader OpenAI was valued at $29 billion, while the currency market metaverse leader sand had a market value of $800 million, and AI concept currency FET had a market value of $90 million in January.

As of February 8, AGIX, the AI leader in the currency market, had a maximum market value of $792 million, from the bottom of $0.04 on January 6, the highest increase of 13 times to $0.66. FET rose from $0.09 to $0.6, the highest increase was nearly 6 times, and the market value was about $500 million.

Although in just one month, my ideas in the artificial intelligence sector have been confirmed, but users have not fully enjoyed the entire round of gains. They deeply feel how difficult it is to achieve the unity of knowledge and action and fight against the weakness of human nature. Therefore, for investment, it is not important to be sure, but how much you can earn after you are sure is the most important.

In an aggressive open market, when the wind blows, the correct approach is to lie flat on the track and enjoy the “value dislocation” brought about by the positive externalities of the market. Excessive “rationality” will make the investment lose its beauty, and the current score cannot be used to measure its future performance.

Mainstream narrative LSD and branch line zk

The largest and most deterministic mainstream narrative in the currency circle in the first quarter is the upgrade of ETH in Shanghai in March. The LSD protocol is a DeFi derivatives track that has grown up with the upgrade of ETH 2.0.

Without considering the price of ETH, LSD will It has become a track facing a trillion-level business volume, with a narrative ceiling and ample room for imagination. Such a high-certainty + partial realistic narrative has also caused LSD-related coins IDO, SSV to increase by an average of about 3 times in this round of rebound.

There is never a shortage of narratives in the encryption industry, and the issue of Ethereum expansion will always have a place on this narrative list. The biggest pain point in the current industry is that the infrastructure is not perfect enough to accommodate hundreds of millions of users.

Therefore, ETH 2.0 and layer 2 expansion will be the main narrative thread throughout the next few years, and zk rollup technology will most likely be the final solution for L2 in the future.

We believe that the successive landing of Layer 2 and Ethereum 2.0 will have the opportunity to become the second growth curve of Ethereum, making Ethereum evolve into an economic bandwidth carrying trillions of dollars. As one of the blockchain infrastructures, L2 Bridge will play an important role in this process.

Best story, most kills

Narration is one of the biggest driving forces for financial development. The measure of the size of a narrative is actually how many people it affects and how deep it is. The time validity of narrative communication depends on the probability of repetition.

A good narrative has its own attributes of time frame, ease of dissemination, repetition, and scarcity. From these dimensions, Bitcoin is undoubtedly the greatest narrative in the past decade. In the early days, with the four words “digital gold”, it not only directly summarized Bitcoin’s anti-inflation narrative, making it easy to understand and spread, but also took the ultimate goal of trillions of gold as the anchor of the grand narrative logic to explain the Bitcoin narrative Reasonableness that can go to the sky.

The halving cycle and deflation mechanism designed by Bitcoin every four years is like refueling a Mercedes-Benz car, adding the best footnote to the continuous operation of this great narrative.

Just like you who read this article, have you ever lost confidence in the industry and despaired of the future because of events such as the ftx thunderstorm, the collapse of 3AC, and the collapse of LUNA? At this time, the old man in the currency circle will tell you that if you persist, wait until 2024, when Bitcoin is halved, and the bull will come back…

Compared with other fields, taking artificial intelligence as an example, there have been at least four narratives about artificial intelligence since World War II, from “automation” to “artificial intelligence”, and then from “machine learning” to today’s “AIGC”. The pinnacle of Bitcoin is driven by the emergence of disruptive products, rather than repetitive narrative gas stations that halve every four years like Bitcoin.

Many things in the world are like chemical reactions rather than mathematical calculations. In the process of solving, it is not necessary to confirm that a=b is the correct answer. In the face of the big narrative, none of us know what direction we will go. We can only choose to let go of our prejudices and pursue vague correctness first.

At the beginning of the narrative, let go of the ego and embrace the bubble.

The climax of the narrative, when the “non-consensus and correct” game you are pursuing gradually becomes the market consensus, turn around and leave.

The end of the narrative, the best story, the most kills.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.

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Harold

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