Author: Miles Deutscher Compiled by: Deep Tide TechFlow

The 4-year cycle has ended. We are entering a new paradigm for cryptocurrencies - survival of the fittest and elimination of the unfit.

The following is my strategy for how to deal with market changes in 2025 in order to continue to accumulate wealth in unknown areas.

Before sharing my strategy, let's first look at why the 4-year cycle is a thing of the past.

我认为 4 年周期不再适用的原因有两个。

1、减半效应减弱

首先，从供给侧来看，比特币The halving effect of ($BTC) is gradually weakening.

With each halving, the reduction in the issuance of new Bitcoins is also shrinking.

For example, the halvings in 2012 and 2016 saw a decrease of 50 respectively. % and 25%, so the impact on market prices is very significant.

But by 2024, the halved issuance reduction was only 6.25%. This means that the halving has been much less effective in promoting prices than before.

2. ETFs have changed market rules

Secondly, from the demand side, bits The launch of coin ETF is a major variable that permanently changes market rules.

Bitcoin ETF is a financial instrument that allows investors in traditional financial markets to indirectly invest in Bitcoin.

Since their launch, they have become the most successful ETF products in history, with demand far exceeding expectations.

This influx of demand not only changed the overall pattern of the crypto market, but also broke many old market laws (such as a 4-year cycle).

The biggest impact of ETF is actually reflected in the altcoin market. Let me explain in detail.

In the past, you might have seen one frequently Chart showing the price rotation relationship between Bitcoin and altcoins. This did hold true in 2021.

But now, this relationship has expired.

The original picture is from Miles Deutscher, compiled by Shenchao TechFlow

In 2017 and 2021, when Bitcoin prices rise, many wealthy Bitcoin whales transfer profits to centralization In the altcoins on the exchange (CEX), thus driving the altcoin market prosperity.

However, most new capital flows are now entered through Bitcoin ETFs In the market, these funds have not flowed to the altcoin market.

In other words, the way funds flow has undergone fundamental changes, and altcoins are no longer beneficial On the wealth effect of Bitcoin.

Retail investors flocked directly to the chain High-risk speculative projects on the so-called "on-chain casino games" (Pump Fun).

Compared with 2021, the number of retail investors in this cycle has decreased significantly. This is mainly due to the pressure from the macroeconomic environment and the fact that many people suffered heavy hits in the last cycle due to events such as LUNA, FTX, BlockFi and Voyager.

However, retail investors who are still in the market skipped the mainstream coins and chose to look for opportunities on the chain.

You can read my detailed analysis of how this phenomenon affects the market here.

If my judgment is correct, that is, the periodic theory is no longer applicable, then this is for the future What changes will the market bring?

I have a bad news and a good news to share.

The bad news is: it becomes more difficult to make money by lying down. This is a natural signal that the industry is gradually maturing.

In fact, there are more trading opportunities in the market now, but if you still use the 2021 strategy - such as holding a bunch of altcoins, Wait for the arrival of the "altcoin season" - then you may be disappointed or even perform poorly.

The good news is: Since there is no so-called four-year cycle, it also means that a multi-year bear market caused by cryptocurrency-specific factors will no longer occur. Of course, from a macroeconomic perspective, a long-term bear market is still possible, as cryptocurrencies do not operate in isolation and their correlation with the macroeconomics is now closer than ever.

The "risk preference period" and "risk avoidance period" in the market are more likely to be driven by changes in macroeconomic conditions. These changes usually trigger short-term mini echo-bubbles rather than unilateral upside trends that last for months. The so-called echo bubble refers to the short-term market rebound caused by changes in the macro environment. Although it is small in scale, it has similarities with the large bubbles in the past.

In these bubbles, there are a lot of opportunities to make money.

For example, in 2024, we witnessed the rotation of different hot spots: November is the meme craze, December is the AI ​​concept, and January is the intelligent body (AI agents). Next, there will undoubtedly be new trends.

If you are sharp enough, these are excellent opportunities to make money, but require a slightly different strategy than the past cycle.

This leads to what I want to discuss next: my strategy.

A few days ago, @gametheorizing and I had dinner together, and he proposedA very insightful point of view.

Many people are pursuing an ultimate goal: whether it is to double the portfolio by 5, 10, or 20 times.

But in fact, a better strategy is to focus on multiple small bets rather than just bets. By continuously accumulating a series of small victories, this approach may bring greater rewards in the long run.

因此，与其全盘押注，寄希望于山寨季让你的资产快速翻倍，不如尝试通过时间的复利效应，持续积累财富。

具体来说，你可以采用这样的策略：

小赌注> 获利Finish, bet again> Make profit again, repeat.

This is why many top traders and thinkers in the crypto field (such as Jordi) were once professional poker players. They learned from poker how to view each trade with a probabilistic mindset, assess possible outcomes, rather than betting blindly.

My portfolio is currently allocated like this:

50% Invest in long-term optimistic 50% of the high-conviction assets are used for stablecoins and active transactions. I will use this part of the funds to find short-term opportunities in the market and flexibly enter and exit.

此外，我用稳定币作为衡量交易成败的标准。每次退出交易时，我都会将利润转回稳定币，从而清晰地看到自己的收益情况。

If your cryptocurrency portfolio is too diversified and you don't know how to deal with current market changes, I shared a guide last week that explained in detail How to optimize your investment portfolio based on changes in the market.

In this article, I emphasized a key point: the importance of setting the "INVALIDATION" standard for each transaction. It's like when you decide to buy a certain cryptocurrency, you need a clear reason to verify (VALIDATION) your choice. The so-called "invalidation" refers to the standard of exiting the transaction in a timely manner when market conditions no longer meet your expectations.

I noticed that many people lack basic risk management awareness when entering a transaction and do not set clear exit standards. This practice often leads to unnecessary losses.

If you want to take a suggestion that can significantly improve future profitability, it is to develop clear technical or fundamental "ineffectiveness" for each transaction "standards." This will not only help you better manage risks, but also improve the overall efficiency of transactions.

Of course, your confidence in a transaction and the expected holding time may affect how you set the criteria or trigger conditions for "invalidation" . But anyway, this doesn't change the fact that you need to plan ahead. Having a clear exit plan is one of the keys to a successful transaction.

Although the current market may not fully follow the previous cycle laws, I am still full of confidence in the future. As long as you maintain the right mindset and strategy, 2025 is still expected to usher in huge growth space.

At present, we are in the bear market stage, but the market trend will eventually change and bring many new opportunities. Until then, your primary goal is to survive.

Returns in the cryptocurrency market often belong to those who can persist in the violent fluctuations. No matter how the market goes ups and downs, patience and tenacity are the key to ultimate victory.