Don't Just Chase Popular Projects
Author: terry
Translation: Deep Tide TechFlow
First, a disclaimer:
I am not the top trader, but here are some key insights I gained while exploring the AI meta with some industry elites over the past two months.
The goal of this article is not only to distill the concepts I've learned but also to help you better understand and navigate this market through practical examples and advice.
Let's get started.
Attention vs. Fundamentals
The rise in coin prices usually has two main reasons:
Attention (hype)
Fundamentals (real value, technology, application)
Coins based on attention:
The prices of these tokens soar mainly because everyone is talking about them (like meme coins popular on X/TikTok). In this case, the price can rise rapidly but may also fall quickly due to a lack of "real intrinsic value," being merely hype.
Coins based on fundamentals:
These coins have substantial value support, such as interesting technology, strong development teams, partnerships, or useful products. Even if the price drops in the short term, it is usually just "noise," as their long-term potential remains significant.
For example, a meme coin may rise in price due to a large number of mentions on Twitter and TikTok, but once the attention fades, the price will quickly drop. In contrast, a mature project developing AI tools and collaborating with well-known projects or companies may experience slow initial price fluctuations, but as more people see the actual effects of its products, the price may steadily rise.
When trading on hype, closely monitor price trends and exit promptly when momentum weakens. In fundamental investing, if you believe in the project's long-term potential, short-term price fluctuations may be irrelevant (this is my personal investment style). If you find that the project's fundamentals weaken or change, be decisive in cutting losses. Never become overly attached to a particular investment project.
Looking for Expansion Space
A wiser strategy is to focus on projects that have the potential to achieve multiple growth in value, rather than just pursuing small gains.
Instead of focusing on a small opportunity that might grow from a $1 million to a $5 million market cap, look for projects that you believe can grow from $5 million to $100 million or even $1 billion. Such trades, if executed well, can yield "life-changing" returns rather than just quick pocket money.
You should always seek opportunities with significant upward potential. This often means focusing on early projects with strong fundamentals or unique innovations, rather than well-known coins that have already been "hyped."
Seizing Early Opportunities
Profitable trades often come from participating in trends before they become mainstream. If you can identify a potential project or trend (like AI infrastructure or collective/multi-agent architecture) before others, you can reap the maximum rewards.
Simply put, if you start researching AI-related technologies or projects before AI becomes a buzzword, you might find an excellent coin when its market cap is very low. As the AI craze grows, more people will get involved, driving up the price. Early participation means you can capture most of the gains.
Take the time to understand emerging trends in AI (such as multimodal, decentralized reasoning, collectives, traffic engineering, agentfi, etc.) and get involved before they become headline news. This may require you to pay attention to developer announcements, read white papers, and check discussions on social media.
Establishing a Trading Process
Having an edge, such as using custom scripts, analytical dashboards, or any efficient research methods, can help you find good opportunities faster than most.
You can use crypto price alert bots or platforms like dexscreener to track new token releases. When a new project suddenly gains trading volume, you should investigate immediately. Check the project's official website, team information, X account, Telegram group, Discord, etc. If it looks promising, you can decide whether to invest immediately.
Speed is crucial. You can even utilize simple tools, like a list of well-known "AI quant" accounts on X, Telegram groups, etc., to stay alert to new opportunities. Over time, you can acquire more advanced tools, but start with free and simple ones. The key is—you must have a strategy, a process, to help you win in the market.
Avoiding the "Mid-Curve" Trap
Often, it is simpler to buy proven leaders or find entirely new low-market-cap projects. Mid-cap projects can be riskier if they lack a clear positioning, as new competitors can easily surpass them.
Suppose you have the following options:
Project A, with a market cap of $1 billion, well-known and continuously launching new features
Project B, with a market cap of $1 million, innovative but still unknown
Project C, with a market cap of $50 million, lacking innovation and always overshadowed by other projects
Beginners might think C is "safer than B but cheaper than A." However, if C stagnates, lacking growth or innovation, it is less likely to yield significant returns compared to finding a new, promising B or sticking with a reliable A.
The point is, if you choose mid-sized projects, ensure they have a plan to stand out. Otherwise, they may just waste your time and capital—ultimately, it's all about opportunity cost.
Focusing on Industry Growth (This is also why I only focus on AI)
AI is a long-term trend. We see its impact not only in cryptocurrency but across all industries.
When an entire industry (like AI) shows tremendous long-term potential, the entire market may expand significantly beyond current valuations. Early leaders in the industry may see substantial appreciation over time.
If the entire AI agent field is currently valued at around $10 billion, but you believe it will become one of the dominant industries in a few years and could grow to $100 billion or more, then the leaders in that field (mature projects with strong communities and products) may achieve 10x or more growth as the industry grows.
Identifying the leaders in the growth story and investing in them now can be a safer and more profitable choice as the entire industry matures.
Adapting and Continuously Improving
AI is evolving rapidly, and cryptocurrency is evolving even faster. You need to constantly update your strategies, reflect on what works and what doesn't, and learn from mistakes.
A good practice is to write down your top 5 successful and unsuccessful trades at the end of each month. Ask yourself: Why did I buy this coin? When did I sell, and why? Could I have spotted the trend earlier? By regularly reflecting on these questions, you can identify patterns in your decision-making and improve over time.
View trading as a skill that needs to be honed. Document trades, assess market sentiment, and discuss strategies with other cryptocurrency traders to help you become smarter and faster.
Managing Liquidity, Staying Flexible
Set aside some cash so you can quickly invest when new opportunities arise. Don't get stuck in investments that you can't exit quickly.
Suppose you have $1,000 in investment capital. Instead of putting all your funds into one project and waiting for months, consider investing $600 in a promising project while keeping $400 in reserve. When you discover a promising new project, you can invest quickly.
Liquidity means flexibility. Quick action is often more important than being "fully invested" when a great opportunity arises.
Becoming a Learner in Cryptocurrency
View cryptocurrency as a long-term career, continuously learning and growing. Don't treat it merely as a lottery ticket. You are here to accumulate knowledge, skills, and capital over the years, not just to chase a one-time big gain. If cryptocurrency truly is the future of finance (which I believe it is), we are just beginning this journey.
An amateur might say, "I want to get rich quickly in a month." In contrast, someone with a long-term perspective might say, "I hope to gradually improve my understanding, become adept at spotting trends, and in a year or two, I will be better positioned to profit from market changes"—this can be achieved through trading, investing, or even creating projects.
Over time, good habits—such as focused research, active reflection, patience, and discipline—will accumulate results. Ultimately, you will be equipped to profit effectively in major bull markets.
Stay patient and consistent. Over multiple market cycles, those who view cryptocurrency as a career and continuously improve themselves will outperform those who rely solely on luck and hype.
Summary
The key is—don't just chase popular projects. Build a system. Learn to identify trends early, conduct in-depth research, focus on fundamentals, and view cryptocurrency as a skill that requires long-term mastery. Keep some funds available to seize new opportunities, regularly review past decisions, and continue learning. Over time, this mindset will help you find significant winners, identify key opportunities, and avoid becoming someone else's "exit liquidity."
terry
[Co-authored by gpt o1]
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