For any ecosystem, it is impossible to develop and prosper without continuous capital inflow.
The same is true for the inscription ecosystem. In other words, the future of the inscription ecosystem requires large capital to enter the market in order to have subsequent development and prosperity.
In yesterday’s article, I believed that the current inscription ecosystem is still in a state of retail investor speculation, and that big funds will enter the market in the next stage.
Is it possible that our prediction of large funds entering the market is just wishful thinking?
I don’t think so, and I think there is a good chance that they will enter the market next.
Generally speaking, there are two main drivers for capital to enter any ecosystem:
The first category is simply because of the wealth effect - no matter what the meaning, value, vision, etc., I see there is a wealth effect here, so I enter the market.
The second type is capital that invests based on wealth effect and intrinsic value. This type of capital will evaluate the value, significance, potential, etc. of a business, and then invest based on this combined with the wealth effect.
The second category can be said to be a minority in the capital circle. There is a possibility that this type of capital will enter the inscription ecosystem in the next round of bull market, but it is not large, and even if there is, the number will not be too large.
why?
Because at this stage, with their way of thinking, it is still difficult to have a certain understanding of the inscription ecology, so they will be more cautious.
The first category is the real situation of the vast majority of capital (although many of them claim to be the second category). This type of capital will definitely enter the market as soon as they see the wealth effect, and will basically not think deeply or act prudently (although they will also talk about value and significance to show their so-called "understanding" of this ecosystem).
This type of capital is the capital that is likely to enter the market in the next bull market. By then, their madness and irrationality will be no less than that of ordinary retail investors.
This type of capital is not necessarily the world's top capital like BlackRock, but rather the hot money of a certain scale that is widely present in society and is looking for opportunities everywhere. It is the kind of retail investors, small and medium-sized institutions and groups with a lot of money.
There are three main reasons why we cannot see them in the inscription ecosystem:
First, the wealth effect and asset scale created by the current inscription ecosystem are not large enough and have not yet gained popularity.
Second, the existing inscription ecosystem is still some distance away from the requirements of big capital in terms of liquidity and transaction convenience.
Third, existing inscriptions are highly dependent on indexers, and the current indexers have certain centralization issues, which may trigger potential security issues.
Let’s look at the first point first.
Take ORDI for example. As of the time of writing, its total market value is only US$1.1 billion, ranking only 63rd in the entire crypto ecosystem.
What is the concept of this?
Does anyone know about BTT (BitTorrent)? How many people know what it is used for? How long has it been since we heard about it?
It is such a coin, whose market value (US$1.15 billion) exceeds that of ORDI, ranking 58th, higher than ORDI.
From this we can imagine how far the inscription ecosystem is from truly going beyond the circle and truly generating wealth effects outside the circle.
Therefore, the leaders of the inscription ecosystem must set new highs in the next trend. As the prices of the leaders continue to set new highs, other assets in the entire ecosystem will also rise, eventually creating a wealth effect for the entire ecosystem, leading to the entire ecosystem collectively going out of the circle under the leadership of the leaders.
However, the wealth effect alone is not enough; there must also be higher liquidity and convenient trading tools.
Regarding this point, currently in the Inscription ecosystem, the main trading location for retail investors may still be centralized exchanges, and the others are a few decentralized exchanges, mainly Unisat.
This makes trading still not convenient enough, and obviously the liquidity is not enough at the moment.
But I believe that with the development of the bull market, once the market recovers, the prices of leading projects will surely reach new highs and bring more liquidity.
In addition, the current inscription ecosystem has begun to have more and more developers and teams developing infrastructure, there will be more and more trading tools for inscription assets, and the convenience of transactions will become better and better.
Finally, regarding security issues, I think I need to write a special article to discuss this topic in detail. As far as the current situation is concerned, the biggest hidden danger is that the indexer of the entire ecosystem is controlled by a few organizations. As the volume of inscription assets grows, this will indeed become a bigger and bigger hidden danger. However, I believe that there will be some way to solve it in the future.
In short, I believe that these factors that are unfavorable to capital entry will be resolved and gradually fade in the subsequent development.
By then, the wealth effect and popularity of the inscription ecosystem will surely attract high attention and strong interest from investors outside the circle. The entry of big capital will most likely appear in the next bull market.
