Title: The Changing Dynamics of Crypto Investments: From Fundamentals to Attention Economy
Introduction:
The cryptocurrency market has always been filled with stories of individuals who have made significant returns by simply buying and waiting for the price to rise. However, the reality is often different, with many investors finding themselves empty-handed after hoping for substantial returns. While some investors opt for stable cryptocurrencies like BTC, others choose to hold onto various altcoins, hoping that their value will eventually be recognized, leading to significant profits. However, well-known DeFi OG Ignas (@DefiIgnas) recently expressed his skepticism about the reliability of long-term investments in altcoins based solely on their fundamentals.
Fundamentals Don’t Always Translate into Profits:
Ignas used the example of Brave browser and its $BAT token to illustrate his point. Despite Brave’s solid fundamentals, including a large user base and substantial funding, the price of $BAT has not seen significant growth. Ignas admitted that he had high hopes for $BAT and even held a significant position in the altcoin. However, despite selling at a high point, he realized that the success of a product does not necessarily guarantee long-term price performance for its associated token. In contrast to traditional financial markets, where strong performance supports higher stock prices, the crypto market operates on different principles.
Attention is the New Fundamental:
Ignas’s tweet sparked an interesting discussion in the comments section. Some suggested that the lackluster performance of $BAT’s price could be attributed to the team’s focus on product development rather than marketing the token. Ignas emphasized the importance of attention in the crypto world and suggested that the team should consider hiring influencers to promote $BAT and build a stronger community to increase its market awareness.
MEMECOIN: The Destroyer of Fundamentals:
MEMECOIN has emerged as a direct challenger to the concept of fundamentals in the crypto market. Its popularity lies in its simplicity and entertainment value, attracting retail investors who enjoy speculative investments. However, behind the scenes, large institutions have also recognized the potential of MEMECOIN and have been involved in manipulating its prices. The crypto market can be divided into two extremes: MEMECOIN-driven speculative investments and the boring practicality of RWA assets. While retail investors prefer the former, institutions tend to focus on the latter.
Different Philosophies, Similar Results:
Retail investors favor a retail-driven market characterized by high speculation and entertainment value, while institutions lean towards a regulated and practical market that includes BTC/ETH ETFs and RWA assets. Despite their apparent differences, both approaches can lead to significant profits. The success of MEMECOINs shows that attention and entertainment value can drive market sentiment and influence token prices. Institutions, on the other hand, recognize the value of MEMECOINs but struggle to justify their investments to their clients.
Conclusion:
The crypto market is evolving, and traditional fundamental investment strategies are becoming less effective. Historical lessons have shown that some fundamental investments fail to outperform inflation, with even strong fundamental projects heading towards zero. The logic of market investments is gradually shifting, and fundamental investment is no longer as politically correct as before. In the fast-paced crypto market, attention is the most valuable asset. The importance of attention economy is increasingly evident, and projects no longer have much time for value discovery. “Pumpmental > Fundamental” has become the consensus for most investors, especially for retail investors who cannot afford to wait.
