Author: He Yi; Source: Binance Square
Every cycle witnesses projects navigating through bull and bear markets, but those transcending these cycles are exceedingly rare.
Some reflections, not investment advice.
2017 marked the ICO era, where public fundraising supplanted traditional VC and PE routes. Hence, the bull market of 2017-2018 favored OG platforms and proxy investments. Simply securing a share meant profit.
In 2021, DeFi emerged, diversifying the market significantly. Projects like meme coins could turn a profit if they moved swiftly.
During the IEO era, projects could negotiate releasing portions of shares to users, resulting in generally lower initial prices. Buying new over old became a hallmark of this period. However, today, IEOs are perceived as legally risky in many jurisdictions, restricted to airdrops and market pricing. Consequently, projects with large circulating supplies tended to open at lower prices, exhibiting relative stability post-launch, exemplified by BB and Lista. Yet compared to 2021, these projects surged quickly without ample consolidation phases.
In 2024, the rise was fueled by BTC ETF launches. Astute money flowed into top-tier projects and development studios, collaboratively crafting impressive data. This synergy allowed project teams to secure substantial funding from VCs (notably, those with billion-dollar portfolios, influencing project valuations). Moreover, projects backed by funds and users felt assured, boasting millions of on-chain users. Listing on any particular platform became inconsequential, as CEXs and DEXs were plentiful, with worst-case scenarios involving self-hosted DEX on their own chains.
Trading platforms lack price-setting power, urging scrutiny of fundamentals alongside market cap, especially for highly valued projects with significant circulation.
Today, the market has indeed evolved. The rivalry between top-tier projects and L2 solutions has escalated into farce, potentially signaling the end of this era. Both primary and secondary markets now host numerous seasoned players equipped with diverse risk management tools, expanding the market’s scale. As an ordinary investor, strategies like ICOs in 2017, IEOs and meme coins in 2021, and yield farming in 2023 may no longer align with today’s market dynamics.
Could a market with fewer VC investments and fewer projects result in a healthier ecosystem? Each cycle witnesses projects enduring the ebbs and flows, with countless top-tier projects falling by the wayside. Success in both Web2 and Web3 ventures remains a rare feat, making projects that transcend these cycles truly exceptional.
Investment carries risks; caution is advised when entering the market.