Author: Jademont, CEO of Waterdrip Capital (X:@shanshan521)
Who’s Making Money in This Bull Market?
Certainly not the VCs. Most of their invested projects haven’t even started token distribution yet. Even those coins with high FDV and low circulation, criticized by the community, might look like they’ve multiplied on paper, but without another altcoin bull market soon, they could easily drop 90% when VCs unlock their holdings.
Nor is it the retail traders. Most are trading memes, dabbling in altcoins, playing with contracts. Some make money, akin to lottery odds, but very few.
Here’s who’s been making money:
1. Bitcoin holders. Holding Bitcoin is like having the world work for you. From 25,000 this time last year to 65,000 now—a huge gain. It’s almost certain to hit 100,000 within a year. Most people miss out on these gains, but it’s reasonable.
2. Centralized exchanges. Exchanges sit at the top of the crypto food chain. The entire industry works with them. Of course, running an exchange comes with significant risks—from regulatory hurdles to overseas operations—but risks match rewards.
3. CeFi platforms like Tether. In Q1 alone, Tether made $4.7 billion—more than most exchanges. Admittedly, this money isn’t strictly from the crypto market. Other financial service providers in crypto, like custody platforms, also quietly profit. They offer essential services to the crypto world and earn accordingly.
4. Operations teams of some public chains/DeFi products. DeFi products like Uniswap generate substantial transaction volumes. The fees don’t go to token holders but directly into the team’s pockets. For instance, the Base team could earn tens of millions from Friendtech. Tron profits heavily from daily USDT transfers, most of which go to the team. These projects earn through business development rather than hyping and selling tokens to retail traders. They resemble traditional internet businesses and represent hope in crypto. MakerDAO and Uni lead by example, with proposals for profit-sharing—a true alpha in this bull market.
5. High-market-cap projects focused primarily on token sales. Those already listed on CEXs have made a killing this round. They don’t rely on income. For instance, some ZK projects see dwindling on-chain activity after airdrops but maintain market caps in tens to hundreds of billions. Liquidity providers happily sell tokens for the team. Similarly, heavily controlled DeFi tokens and nearly abandoned GameFi tokens operate similarly. These crypto cancers continue to drain the industry. The puppeteers behind them also profit. Ironically, some boast on Twitter about how much these projects earn—such spectacles are unique to the crypto world.
There are also quant teams and others earning hard-earned money, but listing them all isn’t necessary. If you find more, feel free to share in the comments.
Based on this analysis, consider building a crypto portfolio that perennially earns: focus on picks from categories 1-4 and steer clear of 5.
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