Diversification Cycle of the Crypto Assets Market: Investment Strategies in the New Normal

In recent discussions with industry veterans, a common viewpoint has emerged: the traditional "four-year cycle" theory has become outdated. If investors continue to cling to old beliefs and expect simple opportunities for a bull market surge, they are likely to be eliminated by the market.

In fact, the current Crypto Assets market has evolved into four parallel but distinctly different cyclical patterns, each with its unique rhythm, strategy, and profit logic.

The Long-Term Growth Cycle of Bitcoin

Bitcoin has evolved from a purely speculative asset to an asset allocated by institutions. The massive influx of funds from Wall Street, publicly listed companies, and ETFs has completely changed the market structure of Bitcoin. The proportion of retail investors holding coins is decreasing, while institutional investors, represented by certain technology companies, are actively increasing their holdings.

This fundamental change is reshaping the price discovery mechanism and volatility characteristics of Bitcoin. For ordinary investors, the biggest challenge lies in time and opportunity costs. Institutional investors can afford a holding period of 3-5 years, while retail investors often struggle to maintain such long-term patience.

In the future, there is likely to be a slow upward trend lasting more than ten years. The annualized return may stabilize at around 20-30%, but the intraday volatility will significantly decrease, making Bitcoin's performance more akin to that of a steadily growing tech stock.

The Short-Term Attention Cycle of MEME

MEME tokens continue to hold long-term appeal, especially during times when the technological narrative lacks attraction. MEME is essentially a vehicle for instant gratification of speculative demand, requiring no complex technical background, just a resonant symbol.

However, the MEME market is transitioning from grassroots revelry to professional competition. With the entry of professional teams and large funds, the difficulty for ordinary investors to profit in this rapidly rotating market is sharply increasing.

Long-term Development Cycle of Technological Innovation

Innovative projects with real technical barriers, such as Layer2 scaling solutions, zero-knowledge proof technology, and AI infrastructure, typically require 2-3 years or even longer to see tangible results. These projects follow the technology maturity curve rather than the emotional cycles of capital markets.

For investors with patience and technical insight, positioning in promising projects during the trough of technological development may be the best strategy for achieving high returns. However, this requires investors to be able to endure long waits and market fluctuations.

Short-term Hot Cycles of Small-scale Innovation

Before the main technological narrative takes shape, various small-scale innovation hotspots will emerge in the market, such as tokenization of physical assets, decentralized Internet of Things, and AI agents. These hotspots usually have a window period of only 1-3 months.

This rapid rotation reflects the dual pressure of the current market's scarcity of attention and the funds' pursuit of efficiency. The key to successfully seizing these opportunities lies in entering during the proof of concept phase and exiting when market sentiment is high.

It is worth noting that if these small hotspots can form a systematic upgrade linkage and create sustainable value in the process, it may give rise to large-scale market opportunities similar to the past decentralized finance boom.

Overall, understanding these four parallel market cycle characteristics is crucial for formulating effective strategies in the current complex Crypto Assets market. The singular "four-year cycle" mindset can no longer adapt to the new normal of the market. Only by adapting to this diversified cycle pattern can one seize genuine investment opportunities in the future market.