How to Navigate Downtimes in the Crypto Sphere

Authored by: Deep Tide TechFlow
Recently, there has been a popular article titled “How to Get Through Historical Junk Time.”
What is historical junk time?
In short, it refers to a moment in history when certain economic principles are violated, and individuals find it difficult to reverse the situation, leading to an apparent inevitable failure in overall trends.
For example, in Japan, following the bursting of the bubble in the 1990s, there were three decades of economic stagnation where young people lacked opportunities, and both national and personal development hit a ceiling.
Similarly, in the United States during the period of stagnation from 1970 to 1982, there was a high inflation rate, high unemployment, and low economic growth simultaneously.
And then, in the Soviet Union from 1979 to 1989, extending even to present-day Russia.
A speck of dust in the era, when it falls on an individual, becomes a mountain.
In the face of larger forces, individuals are always insignificant. Warren Buffett became the “Oracle of Omaha” because he was born in the United States and invested in American stocks; the rise of the wealthy class in China rode the wave of China’s reform and opening up over the past 40 years; some people made significant gains by investing in altcoins/Meme coins due to the surge in Bitcoin, which drove market sentiment, attracting incremental funds…
However, if the entire market or country is in decline, no amount of individual effort will suffice.
In the investment market, the concept of “junk time” is particularly vivid.
Taking Bitcoin as an example, the majority of its gains are concentrated in a few select months, with the increases within those months focused on just a handful of days.
Fundstrat Global Advisors’ Tom Lee recently remarked that most of Bitcoin’s annual gains occur within just 10 days each year, stating, “If you exclude the top 10 days of performance in a year, Bitcoin actually has a negative return.”
All the waiting is for those critical ten days.
So, how should individuals deal with being in the “junk time” of the investment market?
In this regard, A-share investors may have some experience.
The first approach is to “lie down.”
This was the method chosen by most Japanese people after the economic bubble burst—under the weight of the era’s challenges, individual efforts seem futile. Since resistance is futile, it’s better to lie down and enjoy, accepting the reality that cannot be changed.
As some in the cryptocurrency community say, go out and experience life as it is, no longer bound by candlestick charts. Go outdoors, meet with friends, enjoy dates, and break free from the echo chambers of the internet.
At this time, staying away from frequent trading, investing in core assets such as Bitcoin through regular investments, and managing cash holdings like USDT can lead to a peaceful life.
The second approach is “nurturing.”
For instance, in the 1990s, many Japanese companies chose to venture overseas to create a second Japan, and numerous individuals sought opportunities in China during times that were not considered junk time.
Investing follows a similar pattern; when A-shares experience junk time, many A-share investors shift their focus to US stocks and the cryptocurrency market.
In 2024, as the cryptocurrency market also faces junk time, investors are redirecting their attention and liquidity towards US stocks.
This is not speculation but a reflection of the current reality – this year, the US stock market sucked in a significant amount of liquidity from the cryptocurrency market. Many cryptocurrency billionaires made substantial investments in companies like Nvidia and Tesla, yielding impressive returns. This also indicates another reality: this year, the overall wealth effect in the crypto space is far less significant compared to the US stock market.
The third approach is to “grab.”
In a situation where the cake does not grow larger, the only way to get more cake is to grab it from others – this is the essence of “grabbing.” It requires being ruthless towards others, but even more so towards oneself.
In the cryptocurrency market, grabbing typically involves on-chain player versus player interactions and seeking quick profits.
For small retail investors, there are greater opportunities on-chain. In exchanges, your counterpart may be a market maker, exchange, or project team, but on relatively clear-chain structures, everyone can potentially become a leading force through early participation, then rely on hyping followers to achieve liquidity exits.
However, as on-chain activities become more intense, the lifecycle of each project shortens from a week to a day, even down to an hour. This leads to a more brutal battle, not to mention various MEV robots and professional rug issuing teams within the chain.
When