The hardest lesson in the crypto market: don’t take a moment for eternity

no other way

The haze of inflation haunts every mainstream country in the world.

The Russian-Ukrainian war, the epidemic, and the interruption of the global supply chain… It is undeniable that under the wave of globalization in the past two decades, no country can live happily alone. The large amount of oil and natural gas from Russia, the high-quality and cheap industrial products from China, and the grain produced by Ukraine as the “granary of Europe”… These daily necessities that were readily available in the past have all been interrupted abruptly.

Whether it is the United States, Europe or other developed regions, the vigilance of rising inflation has exceeded the desire to stimulate the economy. 8-10% inflation is enough to put many families in a dilemma. But the supply is not enough, there is no other way.

The Hardest Lesson We Learned From the Crypto Marketplace

US inflation hits 40-year high

Before central banks, there is probably only one way to raise interest rates, although everyone knows that it will bring about a depression. However, when interest rates are raised and all kinds of assets fall, inflation can be contained.

The United States, in particular, has the most sensitive sense of smell in this regard. The U.S. raised rates first, and Europe, along with the rest of the world, had to follow. It’s like the last round of a poker game, the home has raised, even if you don’t have any cards in your hand, but you have to call.

Under such a doomed situation of interest rate hikes, all risk assets are, in one word, “unsupported by one tree.”Unfortunately, Bitcoin and Ethereum are just classified as “risk assets” for now.

cycle theory

I am still bullish on Bitcoin, Ethereum and Crypto for the long term, but the exit of funds is not at one’s will.

Do you believe in the “super cycle” theory? The so-called super cycle means that crypto assets experience a bull and bear cycle every 4 years. The most direct support for this theory comes from Bitcoin’s halving every four years (the change in selling pressure). Admittedly, from 2011 to date, it has been in effect 3 times.

The Hardest Lesson We Learned From the Crypto Marketplace

Bitcoin super cycle

I’m not a fan of super cycle. Because if that’s the case – attributing it to a kind of fate is undoubtedly killing the efforts of countless builders in the entire crypto industry, it shouldn’t be.

However, if you ask me if I admire any graphics, then I’m more likely to agree with the Hype Cycle.

The Hardest Lesson We Learned From the Crypto Marketplace

Technology Hype Cycle

Everyone must have seen this curve. What it implies is the law of development and evolution of things, especially technology.

In the beginning people tended to advocate bubbles because it was never falsified. And once the development is too fast, a few thunderstorms are inevitable, and another group of people who are not advocating bubbles will try to make fun of them (like now!). Then, it is time to slowly build and develop.

It goes round and round, interlocking.

It is very similar to super cycle, but not identical:

The 2013 Bitcoin bull market enlightened the public to the technology of blockchain, so in 2015 we had Ethereum.

The 2017 bull market has made everyone aware of the strength of smart contracts, so we have DeFi in 2019.

The 21-year bull market has made us realize that DeFi and NFT can do so many incredible things, so we are destined to harvest new seeds in the future.

The germination of new seeds requires more time.

So, I remain firmly bullish on the long-term future of Bitcoin and Ethereum. Of course, in the short- to medium-term, they are not completely independent from traditional markets and the global economy. Whether it is Bitcoin or crypto, it is only a technology that has been born for more than ten years. So, it can be a very tough time.

most expensive course

As the saying goes: by taking history as a mirror, you can know the rise and fall. If the next bull market is to be brewed, it is imperative to understand what we can learn from this collapse, which is the title of this article.

In my opinion, there is only one thing that must be learned: don’t take a moment as a permanent.

What does it mean not to treat a moment as forever?

Start with “income after sleep”

The Hardest Lesson We Learned From the Crypto Marketplace

Before DeFi Summer, we once invested in a token. Then it went to Pancake’s Farm, APR was 300%+, very comfortable.Later, that pool was listed by Alpaca again, and leverage could be added to dig it. After the leverage is applied, we don’t even need cash anymore. With that Token, we can directly borrow a single currency for mining, and its income can easily reach 10,000%+.

What concept, as long as I deposit 200,000 US dollars, a year later, I theoretically have 20 million US dollars.

At that moment, the office was boiling. After all, even a simple CAKE can generate thousands of dollars for me every day after sleeping, not to mention the additional subsidies of leverage and alpaca – I don’t seem to need to work anymore.

Is this forever? Obviously not (laughs). Friends who have dug in Erchi are familiar with the plot behind it.

DeFi is like this, so is NFT

The Hardest Lesson We Learned From the Crypto Marketplace

Let’s talk about another illusion.

If you buy an animal as an avatar, you not only get an avatar, but soon you will get a dog, then a mutated animal, and then some tokens that these animals will use, even 2 pieces The land where animals will live in the future…

Even better, each of them can be sold. If you think about it, as long as it doesn’t take a year, you can earn back the principal and profit.

Will you buy it?

I clearly remember that on the eve of the airdrop, my brother and I were very hesitant, very Fomo, to decide whether to buy some monkeys. During the time when the APE was actually airdropped, the price of BAYC itself also rose, APE also rose, and Luoxia and Lonely flew together. At that moment, the entire Metaverse was boiling.

Of course, at this moment, you and I already know, this is not forever.

Even “stablecoins ” are included.

The moment when UST is the most popular is the moment when the market value of UST exceeds that of DAI. At that moment, farmers all over the world were boiling for it.

At the time, although MakerDAO executives thought their product was better, they could only be a little sour on Twitter.And this has also attracted abuse from Luna’s fanatical supporters.

The Hardest Lesson We Learned From the Crypto Marketplace

UST, the “Stablecoin” with a scale of tens of billions of dollars, is open to more than ten chains, and has hundreds of millions of dollars in liquidity in Curve and Terraswap. Orders at the level of 10 to 20 million US dollars will not generate slippage at all. What’s even stronger is that it can also yield a super stable 20% annualized interest rate.

For some Korean companies, even if they work hard for a whole year, they can’t earn less than 20%, so it is better to keep the money here, safe and sound.

One of the things I hear the most is that the UST is “too big to fail” despite what seems to be a problem.

But is it permanent?

When Luna fell from 120 to 0.00012, some people were still betting that it would return to the anchor, but everything could not go back. Countless people have lost their money, and it was only discovered that this “anchor” does not exist at all.

Like I talked before, Curve is a completely neutral tool. In its core range, even if your two assets are irrelevant, its AMM algorithm can anchor it and allow people to exchange without slippage.

The Hardest Lesson We Learned From the Crypto Marketplace

Curve AMM Curve

Once you leave the core range, as long as a little panicked funds escape, it is enough to bring the AMM curve back to the prototype and accelerate the crash.

For the same reason, there are also: bribery leverage that can bring immediate returns several times, magical Internet magic currency, club tickets worth 40ETH, IOUs that can be exchanged 1:1 with cash, etc., I will not list them one by one.


As long as it’s a potent medicine to get rid of Luna’s sores from crypto, that’s all. But what Luna brings to the industry is much more than that.

Luna, once the top 5 cryptocurrency, has spread to every corner. And its demise is bringing a series of tragedies. What has happened, there are two immediate consequences:

1. Weakened liquidity

Several mega-sized crypto market makers, who in the past were important maintainers of crypto market liquidity, have suffered greatly.

Whether it is investing in Luna, lending money to Luna, providing liquidity to UST, or the farmer of UST (except ETH to borrow UST), without exception, all of them suffered heavy damage.

Just like in the game, the crystals in the hometown are almost gone, and no one is going to guard the outer tower. You can clearly feel that after the collapse of Luna, the liquidity of the entire Crypto is much weaker.

2.Forced to sell

Top institutions, including Celsius and 3AC, have established a good reputation and reputation for a long time, and they also have a lot of liabilities (whether from LPs, friends or users), which is a normal business expansion behavior. In terms of their size, when the liquidity is normal, it is probably no problem to slowly repay the money.

I believe that the moment they got the money, both parties were very satisfied.

However, the good times are also not permanent.

Today, cryptocurrencies continue to decline during the rate hike cycle. As collateral shrinks, these institutions are left with fewer options. Selling your remaining chips to stop loss is one of the few options. And today’s weak disk simply can’t support such a large sell-off.

This is also a death cycle. The more urgently you sell to repay the debt/make up the margin, the more severe the fall, and the more urgent the debt repayment will be.

yet to happen

In addition to these two immediate factors, there is one more that will probably happen soon.

3. A new round of regulation

With the complaints from Celsius retail investors and the blood and tears of Luna investors, it’s hard to imagine that regulation won’t catch up.

At this moment, it is impossible for Crypto to think about breaking up with Luna. Because the general public in the outside world will not make any subdivisions at all. When the supervision was in need of materials, the cases of Luna and Celsius were handed over, and even 3AC, a wave of strong supervision against Crypto, was completely predictable.

In any case, the proponents of Luna, who was crowded with people back then, are all innocent snowflakes in the current BTC avalanche. The louder the propaganda at the time, the heavy the shackles that will be exchanged in the future.

At the peak of Luna, many organizations believed it was “too big to fail”. A lie told a thousand times becomes the truth. I sincerely hope that everyone will stop advocating any Ponzi, stop believing in any “too big to fail”, and stop “taking a moment as forever”.

write at the end

A friend on Twitter said that I came here from Zhihu, and I was really touched. In the past, these articles of mine were published on Zhihu. After all, the Internet in Jianzhong allowed me to talk about crypto at that time.

I had a “yearly update” strategy at the time, updating my understanding of the entire big market and my portfolio every year. The recommendation in 2019 is mainly to invest in BTC, and the recommendation in 2020 is to switch some positions to ETH. Haha, but the article at that time was a bit immature, so I won’t put the link here. If you are really interested, you can go to Zhihu to read it.

If you let me talk about the current strategy, it may still be based on waiting for the opportunity.

My main current positions are BTC, USDC/USDT, and some small coins and PFPs. At this point, there is not much room to go to the mainstream of panic sell, but there is still a lot of room for alts to go down.

About copying.

The Hardest Lesson We Learned From the Crypto Marketplace

About bargain hunting

I think buying stETH below $800 may be the right choice for long-term holders.

The Hardest Lesson We Learned From the Crypto Marketplace


$800 is one of the starting points of the last bull market, and stETH should indeed have some additional discounts.Long-termists can definitely wait until the day when stETH is converted back into real ETH.

For the future technical route of Ethereum, I am very optimistic about the combination of PoS ETH+Rollup. Based on this route, real web 3.0 applications can also run on Ethereum at an ultra-low cost and enjoy the security of Ethereum without having to consider high handling fees. The environmental protection problems and inflation problems of Ethereum will also be solved because of PoS.

In addition, BTC is my favorite, and I can also choose to start a fixed investment. In the past six months, its liquidity has been good for all to see. After all, liquidity is king. Moreover, the interest rate hike will eventually end, and the release of water is the eternal era.

The Hardest Lesson We Learned From the Crypto Marketplace

Meme of Bitcoin

Finally, at this point in time, if this is your first bear market, don’t get too frustrated. The war will pass, the epidemic will end, inflation will subside, and water release is still the eternal theme. Every minute in a bear market is a good opportunity to build and learn, because this dark moment is also not permanent.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2022-06-15 11:31
Next 2022-06-15 11:34

Related articles