Bitcoin continues to set new historical highs, but it is becoming increasingly difficult for retail investors to make a profit

Source: Talking about Li and Outside

The summer vacation life is still ongoing. Yesterday, I braved the scorching heat and went out for a stroll with the little ones. It indeed feels more exhausting to wander around than to write articles, so I slept quite soundly last night and didn't even realize that there was a heavy rainstorm in Beijing. I only saw through videos sent by others in the morning that many roads were flooded. However, compared to the extreme weather, the market performance in the past couple of days seems overall decent. Bitcoin has once again set a historical high of $112,040, and the discussions in the group have become livelier than in previous days, as shown in the picture below.

Meanwhile, some altcoins have also performed well, with many coins seeing daily increases of over 10%, as shown in the picture below.

Since the beginning of the year, many people online have been shouting that the bear market has lasted quite a while, but Bitcoin continues to disappoint these people by reaching new highs time and again.

In the previous article, we mentioned a speculation: Over the past year, Bitcoin seems to be entering a structural process of capital redistribution, where early whales are starting to exit, while some medium-sized players like institutions/funds are beginning to take over and gradually build their positions. In the short term, the selling by whales may suppress the price of the market temporarily, but as long as medium-sized players can continue to accumulate, the market remains worth looking forward to in the medium to long term. However, in this game of human wealth migration, it is likely that retail investors will end up getting hurt more.

Here’s a price prediction chart for Bitcoin (prediction for July 10, 2025). From the trend of the prediction chart, we might see Bitcoin reaching $150,000 this year, followed by a relatively deep market correction, with Bitcoin's price possibly reaching $260,000 by 2029, as shown in the picture below.

Of course, the above prediction chart is based on the price trends of the past 1,458 days, speculating on the possible price trends for the next 1,458 days, and the results may not be accurate. We have also mentioned in previous articles that market prices are determined by various dimensions such as macro factors, policies, supply and demand, and sentiment, and the accuracy of such predictions mainly depends on whether Bitcoin's future behavior can closely replicate historical cycles.

However, the market is always changing, but human nature is often hard to change. Although we may face many unknown situations in the future, if you still believe that Bitcoin has a future, then it’s still that line from our earlier articles: If your goal is the next 10 or 20 years, then Bitcoin today is not expensive no matter when you buy it.

Everyone has a different understanding of cycles. Some see 1-2 months as a cycle, while others see 4-5 years as a cycle, and some hardcore individuals may consider 10-20 years as a cycle. When it comes to making money, some people focus on the current price, while others focus on the cyclical patterns.

If we simply recall the existing cryptocurrency cycle patterns:

The bull market in 2017 was mainly driven by the hype of ICOs. At that time, retail investors could achieve significant returns with small investments. Of course, such returns came with proportional risks. It felt like there were "thousands" of projects issuing tokens through ICOs, leading some to become overnight millionaires while others faced total losses (many air and scam projects also raised funds through ICOs). For example, the ICO price of BNB was $0.11, and the ICO price of EOS was $1. A quick check of historical data shows that there were about 2,300 ICO projects in 2017, and to date, only about 5% have survived, while the remaining 95% have either disappeared or become worthless or zombie coins.

The bull market in 2021 was mainly due to a massive influx of funds (triggered by the COVID-19 outbreak, the Federal Reserve's large-scale interest rate cuts, and quantitative easing), and it was also a bull market where institutions began to enter (with Musk and Tesla as major representatives). It was the most innovative bull market in cryptocurrency history, where we not only experienced the L1 blockchain wars but also the golden moments of various innovative narratives like DeFi, NFT, GameFi, and the Metaverse. Many project prices were pushed to historical highs, especially during the most frenzied phase of the bull market. It’s no exaggeration to say that it felt like you could make money just by buying blindly on OK or BN. This bull market was likely when many people started to rush in and officially engage with cryptocurrencies.

The bull market in 2025 will mainly be driven by institutions, as major institutions finally enter the market and begin to gain a certain level of influence. With the successful compliance process of ETFs, the inflow of macro funds (traditional funds), and the hype surrounding auxiliary narratives like AI and RWA, Bitcoin successfully broke through the historic $100,000 mark, marking a milestone. Coupled with the Bitcoin strategic reserve plan announced by the U.S. and the continuous advancement of various laws/policies targeting cryptocurrencies, it can be said that this bull market seems to have become a critical stage for cryptocurrencies to transition from being marginal assets to mainstream integration.

In fact, if we look back at the past few bull markets, it is easy to find that as large participants (represented by countries and institutions) continue to deepen their involvement, the market seems to be becoming increasingly unfriendly to retail investors (in simple terms, it is becoming increasingly difficult for ordinary retail investors to make money). However, from another perspective, this seems to be a sign of a new market beginning to mature.

Especially since entering 2025, major institutional investors continue to accelerate their accumulation of Bitcoin, while the U.S. is introducing or planning to introduce regulations/laws that seem to be accelerating the global adoption of cryptocurrencies. Bills like the "The GENIUS Act" and "The CLARITY Act" mentioned in our previous articles could very well become a direct catalyst for liquidity in a multi-trillion-dollar market in the long run.

This is the worst of times, and it is also the best of times. In terms of the overall cryptocurrency market, the infrastructure has become relatively complete after years of development, and the regulations targeting the cryptocurrency market (primarily in the U.S.) are becoming increasingly clear. Previously, cryptocurrencies were niche and for retail investors; now, they belong to institutions, and in the future, cryptocurrencies will be global in nature. As ordinary retail investors, we need to have the courage to go all in. The failures and successes of the past decade have only shown us a window; in the future, we may see a door through which we can exit and perhaps discover a different, broader world.

Lu Xun said: "There was originally no road on the ground, but when many people walk, it becomes a road." In fact, the development laws of any market are basically the same. The path of cryptocurrency has been walked out step by step by early believers. Initially, cryptocurrencies were seen as "geek toys" and "Ponzi schemes." Although the ICO boom in 2017 facilitated the transition of cryptocurrencies from a bubble to a paradigm, many still viewed them as "worthless" and "air scams." However, over time, mainstream finance has slowly begun to accept cryptocurrencies.

In short, if you believe in it, hold it, and add an extra life bet to your future. If you don't believe in it, stay away from it and continue doing what you currently think is right. Ultimately, everyone needs to be responsible for their own choices, and each person can only be responsible for their own choices.

Many people look at Bitcoin at $110,000 and reminisce about Bitcoin at $1 (In January 2011, Bitcoin's trading price first broke $1), hoping to find the next similar asset for wealth accumulation. However, no one can predict what the next wealth-generating asset will be. What we can do is seize the current opportunities (if you also believe that Bitcoin's price will reach $1 million within 10 years) while keeping a broader perspective and being prepared, always maintaining an open attitude.

When it comes to trading, for some, it is an investment, while for others, it is merely speculation. Ultimately, what we need to do is only two things: how much we can earn when we are right and how much we can lose when we are wrong. For example, since this bull market began, many have watched Bitcoin rise from under $20,000 to the current $110,000, lamenting why they didn't buy Bitcoin back then and why they have so little Bitcoin now… Meanwhile, they also sigh about why they kept increasing their positions in certain altcoins despite losses and why they followed others' words to FOMO into low-quality coins that led to total losses…

If we summarize this situation, it roughly divides into two aspects: on one hand, facing "certainty," they find it difficult to scale their investments or maintain continuous investments. For example, they believe Bitcoin will rise, but at that time, it was already at $20,000, and the potential gains seemed limited. On the other hand, when facing "uncertainty," they tend to bet larger amounts, believing their theories must be correct and that their understanding or skills will surely outperform the market and yield huge returns.

As for myself, I mainly consider making those "certain" trades because, while "uncertain" opportunities may have huge potential returns, they also come with significant risks, and such trades are difficult to fully master through any fixed techniques or skills (at most, they can only improve the probability). However, certain trades can be continuously improved and optimized through certain methods.

Investing seems like a very simple thing—it's just about buying low and selling high—but achieving correct investments (i.e., the two things we mentioned above) is actually very difficult. It requires finding various balance points between your investment theories and market changes.

Therefore, my investment experiences over the years have taught me one very important thing: to strictly manage my positions (risk management), especially never to be too attached to losing trades, regardless of what your trading strategy or theory is. Remember, the market is always right.

As long as the market exists, we will not lack trading opportunities. What we need to do is to persist and not be eliminated by the market. If your position management is not good enough or lacks discipline, leading to significant losses (or being stuck) in your investment portfolio, then you won't have enough capital to seize new or even better opportunities.

Thus, understanding your risk tolerance is a very important part of investing. We need to deeply understand: how much we can earn when we are right and how much we can lose when we are wrong. Over the years, I have seen too many examples and encountered many people with larger capital and superior skills, yet many have left this field due to losses, while I am still persevering. Looking back at these past years, especially in the early years of entering this field, I also made many trades and experienced many losses. However, in terms of actual results, most of the profits were actually gained from a few categories of trades (BTC, ETH), which is why I have always insisted on that saying: stay focused, keep thinking, and be patient. I also put this saying in my public account signature, hoping to continue to encourage everyone together~

That's all for today. The images/data referenced in the text have been added to the Talking about Li and Outside Notion. The above content is just personal perspectives and analyses, serving only as a record for learning and communication, and does not constitute any investment advice.