Actually, there is no need to be pessimistic about the crypto circle

Since returning from Hong Kong to now, the feeling is basically the same as with other friends involved in market-making businesses, inquiries about contracts and alpha businesses from US stocks, Hong Kong stocks, and A-shares hot money are basically two or three times a week
Many hot money have already tried margin trading, and some even lost money due to improper operations but still think "it’s definitely because they didn’t find the right way," which is very much like everyone paying tuition fees for AI trading - everyone is actively trying to get in
More than ten years ago, I started a different IB business that helped hot money go public, the biggest difference between hot money and retail investors is: their top priority is controllability, not sector/story hype.
On the contrary, storytelling is actually a tool in their hands. When everyone rushes in, hot money might have already taken profits and retreated 3-6 months earlier, moving on to the next market they can control, which is the main factor of so-called “sector rotation”
When everyone and large institutions enter AI upstream and downstream or hot targets like US stocks and Korean stocks, it will create an exodus effect on a large number of hot assets, partly for profit-taking, and partly because the market size is too large to control
The crypto circle is one of the few markets after the US, Hong Kong, and Korea that can effectively attract counterparties’ liquidity through manipulation (compared to China, Taiwan, Europe, Japan stocks, Saudi Arabia, and other top ten stock markets, the regional entry barriers are relatively high for attracting global retail investors), and it has completely asymmetric controllability and costs (including compliance costs and chip acquisition costs): manageable, controllable, profitable, and portable
Many crypto brothers who shout about quitting the circle, if a small hot spot appears, are basically “ready to come at any time, able to fight when they come,” with a much higher entry rate than old A-share investors, and it’s purely chip betting, no prior knowledge needed to participate, low threshold
These hot money are the main new growth in the industry now. For them, the biggest narrative in crypto is a perfect “gambling layer”
Anything can be used for gambling experiments, and feasible gambling products will be brought back into traditional finance to make money, such as perpetual contracts, event contracts, and dividend pools (like Canton Guangdong Chain). It’s like F1 prototype technology feeding back into civilian cars
So many crypto industry practitioners have always misunderstood the current industry problem: it’s not that there are no good applications, but the target is wrong - not serving hot money well, not serving market makers well
For example:
- How to help them quickly gather counterparties?
- How to provide them with a venue to showcase their skills, preventing risks like withdrawal blocks?
- How to improve market-making capital efficiency?
- How to lower the learning curve for using trading tools?
- How to reduce the risk of being discovered and linked?
Each of these involves fundamental logic and is a big business, and this is a business unique to East Asia/Southeast Asia/Dubai - only here can you hear frank discussions from London, Wall Street, and Wudaokou about controlling chips and margin trading.
These places do not belong to any major government forces, and there are no restrictions on capital.
Serving them must be @DoveyWanCN’s idea - Chinese speakers who speak English
So those still in the industry, or in any industry, don’t hesitate, don’t be fooled by superficial noise - the real big money is hidden beneath the surface