The cryptocurrency world is stirring again. What is that once-dominant "madman" in the crypto space doing now?

The cryptocurrency world is stirring again. Do you remember the top influencer in the crypto space in 2017, "madman" @liujia0224?

That "madman" who updated daily, guiding countless traders with a responsible, focused, and sincere attitude as the "trend madman" of digital currency.

This public account was once a must-read for Bitcoin traders. Once an article was published, it would instantly explode with over 100,000 reads, earning the title of the "weather forecast" of the crypto world, accurately predicting the ups and downs of Bitcoin, Litecoin, Ethereum, and other digital currencies.

On social media, he was a top-tier presence, known by all. His large group had a jaw-dropping entry threshold (rumored to start at 10 Bitcoins), and those who could enter were either rich or influential, symbolizing a certain status.

However, after several rounds of bull and bear markets, the KOLs shifted their focus to YouTube and Twitter, and rumors about the "madman" retiring from the scene circulated frequently. Now, as the cryptocurrency world stirs again, what is that once-dominant "madman" doing?

This is the "Friends of OKX" series of interviews, aimed at exploring the stories, industry thoughts, and lessons learned from KOLs of different backgrounds for new users to learn from. This issue features Mercy @Mercy_okx, welcome everyone to follow along!

Main Text

Article Overview:

Chapter 1: The Madman Speaks - The Past

Chapter 2: The Madman Speaks - The Present and Future

Chapter 3: The Madman Speaks - Advice for Newcomers

Chapter 1: The Madman Speaks - The Past

1. What brought you into the crypto space? The first time you heard about BTC, it was only over 600 RMB?

Hello Mercy, hello everyone, I’m very happy to have a space with the friends of OKX. Let me briefly introduce myself. I have a master's degree in finance and have worked at several large financial institutions, including brokerage firms, trust companies, and insurance companies, giving me a deep understanding of various financial products and derivatives.

I started trading stocks in 2008 and fell in love with trading at that time. Of course, like every trader, I experienced all the accidents, such as leveraged liquidation, where profits that took years to multiply by ten were lost in just a few days. That year was when the stock market experienced a circuit breaker.

While trading stocks, I also enjoyed looking for new trading targets. It was 2013 when I dabbled in precious metals trading, postal currency cards, and Bitcoin. What impressed me the most was Bitcoin. At that time, a newly established exchange was promoting itself wildly on Baidu, offering 0.1 Bitcoin for registering an account. The first time I saw Bitcoin's price, it was over 600 RMB, and during the month I participated in trading, Bitcoin rose from 600 to 8000 RMB, marking the accelerated bull market of 2013. I didn’t have much money at that time, as my focus was on A-shares, but I still made 100,000 RMB. Later, as the price fell, I kept trying to buy the dip, and in the end, I didn’t have much left.

However, it planted the seed of my love for Bitcoin trading. Bitcoin trading has three advantages over A-shares: first, no trading fees; second, 24/7 trading; third, T+0 trading flexibility. For someone who loves trading, these three points are truly heaven. But then Bitcoin entered the bear market of 2014 and 2015, with too little volatility, and at that time, A-shares were in a bull market, so there was less attention on Bitcoin.

By 2016, as A-shares turned bearish, I remembered Bitcoin again. I thought, since I couldn't forget it, why not try working at an exchange? So, with years of experience in A-shares and cryptocurrency trading, I smoothly entered the exchange as an analyst.

Thus began my virtual currency life, or as we say now, I entered the crypto industry.

2. Why did you start writing a public account? How did you become the number one self-media in the crypto space?

Writing a public account was a matter of chance. At that time, public accounts were particularly popular, marking the beginning of the self-media era, and I liked trying new things. I casually wrote on Huobi, focusing on financial content rather than crypto. My second article had a readership of 2.5 million, making me realize the power of public accounts. I thought, if I could share my years of stock trading experience with the crypto space, wouldn’t that be a significant advantage?

As expected, due to my expertise, my follower count quickly surpassed the few analysts at the time, and I maintained the top spot on the rankings until five years later when the public account was banned.

Regarding the community, I didn’t particularly build it because I invested enough effort into writing the public account. My interaction with the community was entirely in the comment section of the public account. Through writing, I received continuous positive reinforcement and persisted in daily updates for over six years, five of which were on the public account. The "madman" style community naturally formed.

The process of content output was quite bumpy. 2017 was the year of the fastest follower growth due to the significant profit-making effect, with many trading sites benefiting from a plethora of copycat effects. By the second half of 2018, the market suddenly cooled down, becoming silent. No one was reading what I wrote, and users were continuously losing money, with daily complaints filling the air, making me question my life. At that time, nearly 90% of the major KOLs in the industry stopped, but I chose to persist because I believed Bitcoin still had a future. I believed blockchain was the technology needed for the future, and as the ancestor of blockchain, Bitcoin's future was bright.

That year, I continuously recharged people's faith, discussing Bitcoin's future, telling everyone that Bitcoin would replace gold and could become a national strategic reserve, ultimately becoming a global currency, priced in satoshis, with 1 Bitcoin equaling 100 million satoshis. To this day, I still believe that.

Until 2021, the market welcomed a new dawn. My followers celebrated, saying they were glad they held on, as they made millions and changed their lives. Countless people experienced this, and at that time, I felt I had truly succeeded—not only changing myself but also those willing to believe in me. However, looking back, it was merely riding the right wave; if these efforts had been placed in A-shares, it might have been hard to reach such life-changing levels. So, I believe that choice is greater than effort.

Chapter 2: The Madman Speaks - The Present and Future

1. What impact will the U.S. treating cryptocurrency as a national asset reserve have on the crypto market in the short and long term?

First, let’s discuss the short-term impact. Trump's policy is a case of good news turning into bad news. Why do I say this? Because the market expected the U.S. government to buy Bitcoin with real money as a strategic reserve, but ultimately, Trump's policy was to treat Bitcoin as a strategic reserve through asset confiscation. Therefore, in the short term, it clearly fell short of expectations, and the market reacted by selling the news, reflecting this news with a waterfall-like sell-off.

In the long term, the significance of the U.S. strategic reserve is enormous. First, the U.S. dollar is the most important currency globally. Previously, sovereign countries only reserved dollars and gold. Now, with Bitcoin included in the U.S. strategic reserve, it means Bitcoin will be recognized by the world in the future. Although the U.S. is not buying now, if other countries want to include it in their strategic reserves, they will need to buy to increase their holdings. Logically, this is similar to Grayscale's Bitcoin Trust, where you can only buy and not sell, but the scale could be hundreds or thousands of times that of Grayscale, so the long-term price expectations and boosts for Bitcoin are evident.

Currently, we should pay attention to who will be the second country to propose a strategic reserve. I believe it won’t be long before more countries follow suit.

Additionally, beyond value storage, from a monetary perspective, the deeper significance of Bitcoin being included in strategic reserves is Bitcoin's liquidity. Bitcoin is easier to circulate than gold, more convenient to carry, and can even be memorized as a private key to be taken anywhere in the world, unrestricted by any national currency. This is a function that no current currency or gold possesses. If such a currency becomes a global currency, it means billions of people will have a small amount of Bitcoin for circulation and payment, ushering in an era of global currency unification. At that time, Bitcoin will be the value anchor, with all goods fluctuating around Bitcoin, but this may be the ultimate form.

We just need to know that before the ultimate form arrives, its price is never too high at any time. This process will continuously push up Bitcoin's price. As for how many years it will take, I believe there is still a long way to go. My attitude towards Bitcoin is that it is a long-term bull market; the industry is far from over, and innovation has just begun. Bitcoin needs to be left for the next generation.

2. With all the favorable policies promised by Trump now in place, what new news could further drive the market up, or do you think the market has already entered a bear phase?

In the short term, all favorable policies have indeed been realized, and there is nothing new to look forward to. The only hope we have for this year is that the Federal Reserve might reintroduce QE in the second half of the year, increasing market liquidity. From a series of actions since Trump took office, it seems he is creating an artificial economic crisis to force the Federal Reserve to ease. Therefore, we are currently in this artificial crisis, and feeling uncomfortable is quite normal. But we need to understand the term crisis more profoundly; there is danger in opportunity. Every crisis washes away a large number of unsteady bulls, but ultimately the market will always rebound. Those who dare to add positions in the pit will eventually reap great rewards. Since we know Trump is creating a crisis, this pit will eventually be filled; we just need to think more about how deep this pit will be.

Regarding bull and bear markets, from Bitcoin's perspective, I believe we are still in a bull market. Currently, both on-chain data and funding conditions do not align with the logic of a bear market. It is more likely that we are in a bull market correction phase, and historically, bull market corrections often range from 30-40%. So, if we push back from 110,000, the correction low might be around 66,000-77,000. The market has already touched this range, but whether it has bottomed out can be assessed alongside the performance of U.S. stocks. The U.S. stock market has seen three consecutive weeks of large bearish candles, with declines exceeding 10%. Such a level of correction usually does not end quickly. In past crises, a 10% drop in the U.S. stock market is just an appetizer; a 20% drop might be a successful bottom, and a 30% drop is generally a sure win. So, I personally believe that 77,000 for Bitcoin is likely not the bottom of this correction. In the short term, 77,000 is a good support level, so as the U.S. stock market rebounds from oversold conditions, touching above 90,000 is very likely. For medium to short-term swing traders, reducing positions above 90,000 and buying back after a pullback might be a good choice.

Overall, Bitcoin does not yet meet the standards of a bear market, but the correction is likely not over, and it is a high sell-low buy market.

In the long term, I believe there are several messages that will push Bitcoin to new heights:

First, the Federal Reserve reintroducing liquidity, as mentioned earlier.

Second, the globalization of Bitcoin as a strategic reserve, with countries following suit will bring significant incremental demand for Bitcoin.

Third, and most importantly, if cryptocurrency is legalized in mainland China, it will be a huge boon. In terms of purchasing power, no country can compare to the Chinese. The common people have money in their pockets but lack good investment targets. The stock market has been stagnant at 3,000 for over a decade, with constant expansion but no growth in indices, and the loss-making effect is evident. Now, the real estate market is also not doing well. With the end of the demographic dividend, real estate has been in a bear market for over ten years.

So, if this really opens up, trillions of funds could flood in within minutes, making it easy to double Bitcoin's price. However, if China opens up, it will definitely not be about opening current cryptocurrency exchanges but rather creating a Chinese version of an ETF, allowing transactions within the wall but not permitting withdrawals, while pricing is anchored to global Bitcoin. In other words, it would create a pool to hedge outside the wall, as the foreign exchange wall cannot fall; this is the foundation of the economy.

3. Which sectors are worth paying attention to in the future, and what types of projects might yield new alpha returns?

Alright, here are a few sectors that I believe have potential opportunities for your reference:

1. RWA: Tokenization of real-world assets is a broad concept that encompasses many areas. Firstly, it can combine DeFi with traditional finance. DeFi is already mature enough in the crypto space, and if blockchain technology can be applied to traditional markets, the possibilities are limitless. For example, tokenized bonds can be used for collateralized lending, and tokenized equity can significantly increase liquidity in financial markets, which will greatly benefit the future economic environment. Additionally, the fractional ownership of real estate, using tokens to secure future income and growth, and the tokenization of artworks are all examples of virtualizing real assets. In summary, there are clear opportunities for implementation here, but the step of putting assets on-chain requires endorsement from traditional large institutions.

2. AI: AI is a hot topic right now and will continue to be an innovative sector in the future. The integration of AI and blockchain mainly reflects in AI algorithms. AI requires a large amount of data for machine learning, and blockchain can protect data privacy and even turn data into a form of value transfer. This can allow centralized AI to evolve into a more secure decentralized model. Currently, aside from some simple AI agents, most projects are still in the conceptual stage and are far less practical than centralized AI. However, there will always be bubbles, as the market seeks dreams, leading to speculative expectations.

3. Public Chains: This is a well-trodden sector. Every bull market cycle sees a surge in public chains, and each cycle brings a few new chains that get hyped. However, alpha often exists in new chains rather than old public chains, which is the logic of standing on the shoulders of giants. Before the convergence of myriad chains, public chains will continue to iterate and break through the "impossible triangle" of blockchain until they catch up with the current internet transmission speed and cost.

4. Payments: Cross-border payments play an important role in the process of global integration, and traditional finance is notoriously slow and costly in settlement. The advantages of using blockchain for these are evident, but these gaps have mostly been filled by stablecoins like USDT and USDC. In the future, we should focus on the integration of payments with smart contracts. For example, some IoT devices can earn data value through data transmission. Additionally, blockchain projects that replace banking systems in underdeveloped regions like South America, Africa, and Southeast Asia are emerging. Many blockchain projects are being used to replace banking systems because the cost of opening a bank account is too high for the poor. For instance, a domestic helper I hired was paid in fiat currency, but the settlement through the traditional financial system was slow, complicated, and costly. Later, I taught her to use an exchange to settle in USDT and then convert it to local currency, which was much more convenient and reduced costs significantly.

5. MEME: The MEME coin craze has passed, but this phenomenon will not end. Low-cost, high-return PVP will always exist in gambling environments, as it aligns with the gambling mentality. In the future, celebrities and brands may issue their own tokens on-chain, leading to more gameplay possibilities. For example, tokens could be used to exchange for company products. The current hype is just the most basic form; ultimately, MEME will be empowered, whether in brand value or consensus value.

From a sector perspective, the overall logic is still to hype new projects rather than old ones. The big opportunities in the future will still be in new projects, as 90% of old projects cannot escape the fate of declining value. After all, for most project teams, the easiest way to make money is to launch a new project rather than rescue those old projects with scattered chips.

4. Traditional financial institutions are entering the crypto space. Which crypto assets do you think these massive funds will allocate to? Where will the funds flow in the future?

Looking at traditional capital, we can refer to four directions: strategic reserves, ETFs, Grayscale, and the Trump fund.

The types of tokens in the U.S. strategic reserves, such as BTC, ETH, SOL, XRP, etc., are likely to be the first allocations for traditional institutions entering the crypto space. For most traditional institutions, they do not understand the crypto space at all. They invest with their eyes closed, simply allocating funds without understanding the risks of projects that could potentially go to zero. With strategic reserve backing, traditional funds do not have to bear that risk.

Additionally, we should pay attention to the future approval status of major ETFs in the U.S. Currently, only BTC is approved, while ETH, SOL, XRP, and LTC are in preparation.

The allocation of Grayscale Trust represents the direction and expectations of early institutional investors in the U.S. crypto space. Currently, Grayscale Trust has single-asset trusts for BTC, ETH, BCH, ETC, LTC, SOL, LINK, MANA, FIL, BAT, LPT, XLM, ZEC, and ZEN.

Finally, the Trump crypto fund is also an important reference standard. It currently holds BTC, ETH, TRX, LINK, AAVE, ENA, MOVE, ONDO, and SEI.

Chapter 3: The Madman Speaks - Advice for Newcomers

1. What advice do you have for newcomers just entering the cryptocurrency field? How should they start learning and accumulating experience?

For newcomers, the current threshold in the crypto space is quite high. Unlike when we entered, where simply buying and selling was enough to get in, now there are many more complex strategies. Over the years, the crypto space has developed numerous ways to engage, especially with the vast amount of on-chain content. You could say that everything traditional finance had has been copied over, and the crypto space is innovating in areas that traditional finance does not cover. This means you need a lot of financial knowledge, a strong blockchain foundation, and an understanding of the internet.

The 24/7 continuous trading can be exhausting for newcomers. Therefore, it’s essential to first understand the overall framework of the crypto space, such as secondary market trading, primary market analysis or macro analysis, exchange-related businesses, on-chain treasure hunting, DeFi, etc. Newcomers should focus on a specific niche and thoroughly understand it, accumulating experience through practice and engaging with industry veterans. Learning from the pitfalls others have encountered is the most valuable asset for newcomers.

Finally, rapid learning is crucial. Only by moving faster than others can you seize significant opportunities.

2. What common misconceptions or traps do you think newcomers should avoid during market trading?

Regarding trading, I have been in the market for nearly 20 years, possibly older than many of the listeners here. I’m not that old; I just started trading while in school. Over the years, I’ve encountered many pitfalls. I believe the most important thing is to maintain the right mindset. I often say in my posts that trading is a marathon, not a 50-meter sprint. Don’t think about getting rich overnight; instead, focus on steady growth. As long as you can survive, opportunities will always be there. Therefore, I emphasize asset allocation, how to achieve stable annual growth, which assets are risky, which are cash assets, and which are value-preserving assets, and how to allocate them based on your risk tolerance.

If your current assets are not substantial, focus on working hard in this industry and think about how to make money through your efforts. Don’t fixate on getting rich through trading, as I’ve seen too many people who got rich quickly ultimately give it all back to the market. Often, the money made was due to luck, while losses were due to skill.

Also, avoid borrowing money or using funds that affect your daily life to trade cryptocurrencies, as this will impact the most crucial aspect of trading: your mindset. Once your mindset is distorted, all your operations will become deformed. If you notice your mindset is off, immediately stop trading, take a break, and then get back on track.

If you are trading with leverage, remember to set a stop-loss before opening each position. This is key to survival. If you cannot adhere to this rule, please do not engage in contract or leveraged trading.

3. How do you suggest newcomers establish their own analysis framework and models? Are there any practical tools or methods you can recommend?

In trading, I believe the most important thing is not to read books but to start first. Allow yourself to accept failure, acknowledge every stop-loss, and admit that you are imperfect, even flawed. Learn to respect the market. Therefore, my advice is to start with a very small amount of money to experiment and make mistakes, finding your own issues through trading and then solving them to discover a trading method that suits you.

Once you have accepted your failures, you can begin to learn some theoretical knowledge, look at indicators, and understand the patterns of candlestick charts. Here, I recommend a few books that I find helpful regarding trading: "The Wyckoff Method," "Japanese Candlestick Charting Techniques," "Reminiscences of a Stock Operator," "The Turtle Trading Rules," and "Stop Loss."

Ultimately, combine various types of knowledge to increase your success rate in market judgment. Trading is not a simple path; it is a system, and it is difficult to derive correct results from a single indicator. Over the years, I have been continuously improving and learning. Trading is a path of rigorous practice, so if there are better ways to make money, I suggest not choosing this path. It is a perilous road to wealth, and most people spend their lives in mediocrity. Those who can achieve stable returns are already rare. More often than not, I feel it requires a bit of talent or whether your personality is suited for trading. The key is to find a way that works for you to make money.

Conclusion

Mercy, I am honored to invite the legendary trader "madman" for this sharing. "Responsible, focused, and sincere" are qualities I deeply perceive from my mentor. In the dull market conditions, I hope everyone can gain insights and regain confidence from his sincere and profound sharing!

Finally, Mercy has extracted a quote from the recommended book by the madman, "Reminiscences of a Stock Operator," to share with everyone:

"There is nothing new on Wall Street because speculation is as old as the mountains. What happens today in the stock market has happened before, and it will happen again."

Risk Warning and Disclaimer

This article is for reference only. The views expressed in this article are solely those of the author and do not represent the position of OKX. This article does not intend to provide (i) investment advice or recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; (iii) financial, accounting, legal, or tax advice. We do not guarantee the accuracy, completeness, or usefulness of such information. Holding digital assets (including stablecoins and NFTs) involves high risks and may fluctuate significantly. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professionals regarding your specific circumstances. You are solely responsible for understanding and complying with applicable local laws and regulations.

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