This year, the performance of the primary and secondary markets has been good, but at the same time, there are also some sectors that I think are overvalued and will be overly concerned by investors. Some influencers or researchers in this market usually try to tell you some of their judgments on the future of the current industry when the market is facing drastic fluctuations. #Web3
Of course, I am no exception, but the theme of this article is not to recommend a certain sector, but to list some sectors that I am not optimistic about now or in the future.
As Charlie Munger said in the book "Poor Charlie's Almanack": I just want to know where I will die in the future, so that I will never go there~ The same is true for investment. If you know what kind of concept is destined not to have sustainable development, then choosing not to hold it for a long time would be a very rational choice.
Note 1: The content of this article only represents personal opinions, and does not specifically involve any specific target. At the same time, most of this article as a whole stays on the deduction of the logic of sectors and concepts, and does not constitute actual buying and selling advice. Please use this article as a confirmation of opinions, rather than a reference for buying and selling.
Note 2: This article will start from the recent hot concepts and push to some longer-term concepts. At the same time, all the concepts described in this article are from the perspective of "not supporting long-term holding", which does not mean that they do not have trading and speculation value.
01丨The irrationality of temporary hype😈
-BRC20 concept
This is a concept that has been at the forefront of the storm recently. Why am I not optimistic about this concept? Saying that BRC20 is not worth betting on for the long term at this time is just like saying that XXX in the Hong Kong sector is not worth holding for the long term two months ago. It is bound to attract criticism.
In fact, Bitcoin has been associated with countless narratives over the years: a new transfer system, electronic cash, decentralized banking, digital gold, etc., but there is almost only one type of consensus that has been maintained: digital gold, that is, it is used as a value store. This is an incredible existence in a risky market.
It is this kind of continuous consensus that has created the current unshakable position of #BTC . So, now and in the future, is BRC-20 needed to add icing on the cake? I think for ordinary investors, it is not necessary. Value storage does not require better technology and scenarios, which can be left to other projects.
Of course, I need to point out that I do not mean to deny BRC20 globally. I just mean that the industry currently has a lot of infrastructure with good performance and many excellent L2s. There is no need to go to a chain with poor performance to hype up new on-chain demand.
So the question is, who needs it? PoW miners.
Regardless of whether the popularity of #BRC20 will continue, if it continues to develop, it will inevitably face regulatory crackdowns. The hotter the situation, the faster this step will come, and BRC will repeat the script of ICO in the past.
Afterwards, only a small number of players made a profit from this "musical chair" game, while the rest of the players earned gas fees steadily.
-AI Concept
Some time ago, ChatGPT ignited the combination and empowerment of AI concepts in various fields, and the encryption industry is no exception. However, we have to recognize one thing: the current popular AI and encrypted AI do not directly empower each other. Most of them are just taking advantage of the hot spots and connecting to the GPT interface.
What's more, the current encryption industry is also very weak at the application level. Apart from the application of basic components, there are few truly practical applications at the ecological level.
02丨A model that is difficult to implement ⚔️
In addition to the temporary hype, there are also some business models and concepts that are difficult to implement. They are concepts that can be hyped but difficult to implement. They definitely do not have long-term value, such as: Internet of Things, decentralized WIFI, tourism/travel, retail, e-commerce, health/medical care...
If I were to list them, I could list a lot. These concepts are either closely linked to the real economy, or have already developed very maturely without the support of blockchain, or there is no need to use blockchain and tokens to force empower them at all.
There are many projects in the cryptocurrency world that fall into the logical circle of "forced decentralization". Of course, it cannot be ruled out that this is a gimmick used by the project owners to reap profits.
As mentioned before, the application layer of the current cryptocurrency circle is difficult to implement, and there is more hype around the infrastructure, such as various L1, L2 and L0, as well as various special protocols developed around the basic chain.
The hype expectations for these broad and difficult-to-implement concepts are actually far-fetched, not to mention the long-term value. The grander the narrative, the more people will be drawn into it.
03丨Token Economic Issues💰
In addition, in addition to some of the grand or difficult-to-implement concepts mentioned above that are not worth holding for the long term, there are also some concepts in the current industry that belong to the long-term growth and rigid demand track, but there are obvious problems with the token economy, such as Gamefi and storage concepts.
How to define the quality of a token economic system?
The most intuitive reference factor is whether it will bring continuous selling pressure to the secondary market, that is, whether their economic design can achieve supply and demand balance and ecological self-circulation, and will not bring pressure to secondary market holders.
Many Gamefi projects have these problems, and ecosystem participants can always sell the tokens they obtain in the ecosystem interaction process to the secondary market. The same is true for the storage sector, but the storage sector is a problem of technical implementation and demand, so I will not go into details here. I have discussed this in detail in previous articles.
There is an expectation of temporary hype for these projects with problematic token economies, but in the long run, there is continued selling pressure in the secondary market, which is not conducive to price growth.
PS: There were similar situations in the oracle track before, but the mechanism was changed later to make up for this.
04丨The concept of obvious leader🎊
There are also some concepts in the industry that have obvious leaders and ceilings as they develop. These are worth holding for a long time, which is also the main topic in the next article. They are also cyclical. In addition, for these concepts, only by holding the leaders can you better avoid risks.
Finally, as a summary, let us sort out the main points of this article: As an investor and trader with a conservative style, you need to have a more in-depth study of the long-term value of concepts in the market to avoid being blindly influenced by temporary emotional speculation.
This article mainly talks about "what will not be a long-term trend". Only by mastering the trend's reverse hand can we better sort out the trend and expected demand. In the next article, I will sort out some concepts with periodicity and potential speculation expectations based on this article, hoping to help you open up your mind in the layout of spot~
Note 3: All the content in this article is original. If you see the same viewpoints in other places later, there is no coincidence, and it is likely copied from me.