The universality and structural bull market of the cryptocurrency market

Readers often ask in the comment section: Is there still a market for altcoins coming up?

I have responded to this question multiple times. I believe that a general altcoin bull market is probably hard to see again, but a few valuable projects and coins may still rise again with the emergence of a bull market.

This view is merely my own intuitive feeling, without much experience to rely on, nor is there much historical data to support it.

However, recently, after reading about the investment experiences of a senior investor, I have gained a clearer understanding of this intuitive feeling.

This senior investor is a well-known investor on Xueqiu, nicknamed "Retail Investor B." He recorded his investment experiences in the A-share market from 2013 to 2023 in real-time on Xueqiu, and then canceled his account on December 31, 2023, completely "disappearing" from the online space.

He is a first-generation investor in the A-share market, having started investing in A-shares in 1991, experiencing various historical changes and documenting the growth stages of A-shares.

Although he canceled his account, fortunately, many attentive netizens on Xueqiu have meticulously recorded all his statements and compiled them into a book, allowing me the opportunity to read that history and broaden my horizons.

In his narrative, he vividly describes the general bull market and structural bull market in A-shares.

When the A-share market was just established, there were only a few dozen to a hundred listed stocks.

At that time, no matter what stock you bought, regardless of the price you paid, and regardless of how badly it fell during the subsequent bear market, as long as the next bull market came, you could all break even.

Back then, the A-share market was a place where anyone who dared to jump in could "get rich." Because the number of stocks that could be speculated on was too small, when a bull market arrived, after the leading stocks were driven too high, new players could only buy and dared to buy those cheaper stocks. So for a period, the A-share market was one where as long as you could hold onto the stocks, even if you bought junk stocks, you could eventually turn things around and even make money.

The bull markets encountered during that time were what we call general bull markets.

Isn't this phenomenon exactly what we saw in the early years of the crypto ecosystem?

Only the retail investors who rushed into the A-share market back then have transformed into today's retail investors rushing into the crypto ecosystem—year after year, the flowers are similar, but the people are different.

However, after 2000, especially after 2010, as the A-share market grew larger, with the total market value reaching tens of trillions or even hundreds of trillions, it became increasingly difficult for general social funds, even institutional funds, to form that kind of general bull market. Even before the stock market crash in 2015, despite the entire society using financing and margin trading, it was still difficult to create a situation where junk stocks surged together.

In this context, the A-share market has hardly seen a general bull market again, only structural bull markets—where only certain sectors rise while many obscure sectors remain flat.

This phenomenon is not only present in A-shares but also in Hong Kong stocks and U.S. stocks. Especially in the U.S. stock market, during these years of long bull markets, only a few leading and high-performing tech stocks have achieved significant gains, while many stocks have remained stagnant.

Doesn't this closely resemble the situation we see in the crypto ecosystem today?

In this round of market activity, if we exclude the various meme coins that have surged wildly, and look at those older coins, isn't it true that aside from a very few projects with ongoing development and value support that have seen some increase, the vast majority are basically flat?

Following this line of thought further: among the newly emerged tokens in this round of market activity, how many will have the hope of rising again after this round of bubble bursts?

I believe the answer is self-evident.

Therefore, we should abandon the fantasy of a general altcoin season, carefully examine the tokens we currently hold, and get rid of or swap those tokens that we believe have no prospects or certainty, aiming for simplification and streamlining.

In the future, when we are ready to invest, especially when preparing to invest heavily, we must be cautious and prudent.