Friends of OKX Issue Nine | Dialogue with the Madman: Past, Present, and Future
The cryptocurrency world is once again in turmoil. Do you remember the top influencer in the crypto space in 2017, the "Madman" @liujia0224?
He was the "digital currency trend madman" who tirelessly provided direction for countless traders with a responsible, focused, and sincere attitude.
This public account was once a must-read for Bitcoin traders. Whenever 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 threshold so high it was astonishing (rumored to start at 10 Bitcoins); those who could enter were either wealthy or influential, making it an unspoken symbol of status.
However, after several rounds of bull and bear markets, the KOL landscape shifted to YouTube and Twitter, and rumors of the "Madman" retiring from the scene circulated frequently. Now, as the crypto world stirs again, what is the "Madman," who once dominated the crypto space, doing?
This is the "Friends of OKX" series of interviews, aimed at exploring the stories, industry insights, 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!
Article Overview:
Chapter One: The Madman Speaks — The Past
Chapter Two: The Madman Speaks — The Present and Future
Chapter Three: The Madman Speaks — Advice for Newcomers
Chapter One: 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 this 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 brokerages, 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 one must go through, such as leveraged liquidation. I lost profits that took me years to accumulate 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 new exchange had just been established, 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 after all the back and forth, I ended up with very little 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, the A-share market was booming, so interest in Bitcoin waned.
By 2016, as the A-share market turned bearish, I remembered Bitcoin again. I thought, since I couldn't forget it, why not try working at an exchange? So, with my years of experience in A-shares and cryptocurrency trading, I smoothly entered the exchange as an analyst.
Thus began my journey in the world of virtual currencies, or as we say today, the crypto industry.
2. Why did you start writing a public account? How did you become the top self-media in the crypto space?
Starting the public account was a matter of chance. At that time, public accounts were very 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. With zero followers, my second article garnered 2.5 million views, making me realize the power of public accounts. I thought, if I could share my years of stock trading experience with the crypto community, wouldn’t that be a game-changer?
Sure enough, due to my expertise, my follower count quickly surpassed the few analysts at the time, and I maintained the top spot on the leaderboard until five years later when the public account was banned.
As for the community, I didn’t particularly build it up because I invested so much effort into writing the public account. My interaction with the community was entirely through the comment section of the public account. Writing the public account also provided me with continuous positive reinforcement, and I persisted in daily updates for over six years, five of which were on the public account. The community naturally formed around the Madman style.
The process of content output was quite bumpy. 2017 was the year of the fastest follower growth due to the significant profit potential, and many trading sites had a plethora of copycat benefits. By the second half of 2018, the market suddenly cooled down, becoming eerily quiet. No one was reading what I wrote, users were continuously losing money, and all I heard were complaints, which made me question my life. At that time, nearly 90% of the major KOLs in the industry stopped their activities, 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 progenitor of blockchain, Bitcoin's future was bright.
That year, I continuously recharged people's faith, discussing Bitcoin's future, telling everyone that Bitcoin would eventually replace gold and could become a national strategic reserve, becoming a global currency, ultimately being priced in Satoshis, with 1 Bitcoin equaling 100 million Satoshis. To this day, I still believe this.
By 2021, the market welcomed a new dawn, and my followers celebrated, saying they were glad they held on because they made millions, changing their lives. Many people experienced this, and at that moment, I felt I had truly succeeded—not only changing my life but also those who were 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 Two: 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's expectation for strategic reserves was that the U.S. government would use real money to buy Bitcoin, 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 nations only reserved dollars and gold, but now that Bitcoin is 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 clearly need to buy to increase their holdings. The logic 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 need to pay attention to who will be the second country to propose strategic reserves. 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 hold small amounts of Bitcoin for circulation and payment, ushering in an era of global currency unification, where Bitcoin will serve as the value anchor, and all goods will fluctuate around Bitcoin. However, this may be the ultimate form.
We just need to understand that before the ultimate form arrives, at any time, its price is not considered high. 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 is meant 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 manufactured crisis, and feeling uncomfortable is quite normal. But we need to understand the term crisis more deeply; there is no opportunity without a crisis. 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 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 cycle, and historically, bull market corrections often range from 30-40%. So, if we push back from 110,000, the correction low is likely 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 often does not end quickly. In past crises, a 10% drop in U.S. stocks is just an appetizer; a 20% drop might be a successful buy, and a 30% drop is generally a sure win. Therefore, I personally believe that the 77,000 position 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. stocks rebound from overselling, touching above 90,000 is very possible. For medium to short-term swing traders, reducing positions above 90,000 and buying back after a dip 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 other 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 index growth, and the loss 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 at any moment, making it easy to double Bitcoin's price. However, if China opens up, it will definitely not be about allowing current cryptocurrency exchanges, but rather creating a Chinese version of an ETF, where money is traded within the walls, and withdrawals are not allowed, but the price is pegged to global Bitcoin. In other words, it would create a pool to hedge outside, as the foreign exchange wall cannot fall; this is the foundation of the economy.
3. Which sectors should we pay attention to in the future, and what types of projects might yield new alpha returns?
Alright, here are a few sectors I believe have potential, for your reference:
1. RWA: Tokenization of real-world assets is a broad concept that encompasses many areas. First, 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 short, there are clear opportunities 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 manifests in AI algorithms. AI requires vast amounts 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 not as practical as centralized AI. However, there will always be bubbles, as the market seeks dreams, leading to speculative hype.
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; this 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 global integration process, and traditional finance is notoriously slow and costly in settlement. The advantages of using blockchain for these are obvious, 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 traditional financial systems 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 through 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 becoming less valuable over time. 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, and XRP, 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 blindly with investors' money, simply allocating because they feel they should. They absolutely dare not touch projects that might go to zero. With strategic reserve endorsement, traditional funds do not have to bear the risk.
Additionally, we should pay attention to the future approval status of major U.S. ETFs. 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, currently holding BTC, ETH, TRX, LINK, AAVE, ENA, MOVE, ONDO, and SEI.
Chapter Three: 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. It’s not like when we entered the crypto space, where you could just buy and sell with a bit of knowledge. After so many years, the crypto space has developed too many ways to play, especially with the vast amount of on-chain content. You could say that everything traditional finance has has been copied over, and what traditional finance lacks, the crypto space is innovating on. This means you need a lot of financial knowledge, a strong blockchain foundation, and an understanding of the internet.
The 24/7 uninterrupted trading can be exhausting for newcomers. Therefore, it’s advisable to first understand the entire 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, thoroughly understand that area, and accumulate experience through practice. Engaging in conversations with industry veterans, especially about the pitfalls others have encountered, is invaluable for newcomers.
Finally, rapid learning is crucial. Only by moving faster than others can you seize great opportunities.
2. What common misconceptions or traps do you think newcomers need to avoid in the market trading process?
Regarding trading, I have been in the market for nearly 20 years, possibly older than many of the friends listening to this space. 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 work. Don’t fixate on getting rich through trading, as I’ve seen too many people who got rich quickly only to give it all back to the market. Often, the money made was due to luck, while the losses were due to skill.
Also, do not take out loans or use money that affects your living expenses to trade cryptocurrencies, as this will impact the most important 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 using 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, accept every stop-loss, and acknowledge that you are imperfect, even flawed. First, learn to respect the market. Therefore, my advice is to start with a very small amount of money to experiment and make mistakes, find your own issues through trading, and then solve those problems to find a trading method that suits you.
Once you accept your failures, you can begin to learn some theoretical knowledge, look at indicators, and understand the patterns of candlestick charts. Here are a few books 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 obtain correct results from a single indicator. Over the years, I have been continuously improving and learning. Trading is a path of hard 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 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, the Madman, for this sharing session. "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 Madman's recommended book, "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 experience significant volatility. 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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