Article Source: Talking About Li

Since July, Bitcoin has continued to challenge its all-time highs, Ethereum has also seen significant gains, and even established currencies like XRP and ADA have seen gains of over 40% in the past month, as shown in the chart below.

1. What stage of this cycle are we currently in?

With the recent recovery in market sentiment, the voices calling for a bear market seem to have decreased compared to some time ago. However, some people do not want to admit that it is still a bull market, thus continuing to fall into a new dilemma. Different people may have different opinions on the definition of a bear market and a bull market. It all depends on your own perspective. As we mentioned in our March 13th article: Some believe a bear market occurs when Bitcoin falls below MA200, while others believe it occurs when it falls below 50,000. This doesn't mean you'll lose money in a bear market and make money in a bull market. In fact, regardless of whether it's a bull or a bear market, as long as the market remains and liquidity is maintained, opportunities exist. We should both follow the trend and go against it. Although the new round of periodic growth since July has been good, not only has Bitcoin hit a new high, but TOTAL2 has also reached a high of around US$1.56 trillion, as shown in the figure below. However, the overall market capitalization of altcoins hasn't broken through its previous high. Compared to the previous two bull markets, I feel that retail investor sentiment remains relatively pessimistic and hasn't reached the reckless FOMO (Fear of Monetization) seen during a major bull market. Of course, this is just my personal experience.

Looking at the current cycle from 2023 to the present, there have indeed been many cases of retail investors getting rich quickly, but they seem to be mainly concentrated in MemeCoin. Moreover, in terms of the overall number of investors, the proportion is relatively small. In other words, the profits generated in this round of crypto cycle have not spread very far or widely so far. Compared with the scale of retail investor wealth creation in the previous two rounds, it seems to be a bit smaller. According to a NewTrading report, the number of global cryptocurrency users is expected to reach 861 million by 2025. However, you might be more concerned about the number of people in our region. I just came across a recent data report. According to the latest statistics released by CoinLaw in July 2025, an estimated 5.2% of adults in mainland China (approximately 50–60 million people) own or use cryptocurrency, as shown in the figure below. Let's continue with the example of PumpFun, the most representative MemeCoin launch platform. As of this writing, the platform has over 22 million active addresses (i.e., wallet addresses), and the cumulative number of MemeCoins created on it has exceeded 12 million. However, this has only created a few hundred millionaires (in terms of wallet addresses), as shown in the figure below.

Furthermore, how many of these so-called hundreds of millionaires are truly retail investors? This also needs to be questioned.

So, what does a true bull market feel like? It's the kind of time when everyone feels they are about to get rich, and everyone feels that making money is as easy as breathing. The market is rising every day and it seems that there is gold everywhere. During this period, no one pays attention to or studies the fundamentals, K-lines, etc. All you can see is people's crazy FOMO desire.

So far, I haven't actually seen this happen, which could mean two things:

First, the market has completely changed and no longer operates according to historical cycles, and retail investors are no longer a significant part of the market. Second, the market has not yet entered its final frenzy phase, meaning we haven't yet entered a true bull market bubble (guessing from the timeline, we may still be in the middle to late stages of this cycle).

Recently, many KOLs online have been suggesting that the market will break its cyclical pattern and enter a long bull market. I will remain neutral on this matter for now. As we mentioned in our January 17th article, the most important logic behind breaking the cyclical pattern and entering a long bull market is "change." Some of the changes we've already seen include the continued popularity of crypto ETFs, the increasing involvement of large institutions (such as MicroStrategy), and the inclusion of Bitcoin in the national (US) strategic reserve, among others. However, I believe these current changes are insufficient. The foundation for a long bull market isn't yet in place. However, judging by Bitcoin's performance, we appear to be at a pivotal point in this era of change. My guess is that this cycle will continue to follow certain established patterns, but it may take slightly longer. Perhaps only with the next cycle will we truly usher in or stand at the starting point of a new era of change.

2. A bull market still needs a bigger bubble

Above, we mentioned the concept of a bull market bubble. The word "bubble" shouldn't be viewed entirely in a derogatory sense, as we mentioned in our July 19th article: the most advanced price manipulation is actually the formation of bubbles, and what a bull market needs most is more bubbles. MicroStrategy has accumulated over $71 billion worth of Bitcoin through a brilliant strategy. We've witnessed Bitcoin prices continue to break all-time highs. Barring any new black swan events in the macro environment, ETH and some altcoins are likely to continue their rise. Making money, in short, is a process of embracing bubbles, enjoying them, staying away from them, and anticipating the next one.

If we look at historical cycles, every bull market spawns a new crypto bubble. This process creates incredible wealth opportunities, but often also ends in tragedy. For example, after the 2021 bull market, we experienced the Terra (LUNA) bubble, then known as the "Moutai of the cryptocurrency world." Another example is the ICO bubble after the 2017 bull market. So far in this cycle, we haven't seen signs of a bubble like the ones mentioned above. However, as more and more companies like MicroStrategy are copying their strategies, this situation seems to be changing. This is especially true as companies like SharpLink Gaming begin to shift their focus from Bitcoin to altcoins, which is starting to give me some signs of a possible bubble. More and more companies are pegging their stocks to BTC/ETH and hyping them. These purchases are having a significant positive impact on cryptocurrency prices and market sentiment. Besides BTC and ETH, some companies are also starting or planning to catch up and accelerate hype in other altcoins. For example, Bit Origin plans to raise $500 million to purchase DOGE, Upexi plans to raise $200 million to purchase SOL, and Nano Labs plans to raise $200 million to purchase BNB, among others. It is very obvious that more and more companies have joined the ranks of cryptocurrency speculation. According to data from Coinshares, driven by institutional investors, inflows have reached a record $11.2 billion so far this month (July), far exceeding the $7.6 billion in December 2024, after the US election, as shown in the figure below.

Specifically for altcoins, year-to-date, ETH has received $7.79 billion in inflows (exceeding last year's total inflows), SOL has received $8.43 billion, XRP has received $7.21 billion, and SUI has received $1.26 billion. (See the chart below.) However, there's another interesting phenomenon here: while some altcoins have recently attracted huge inflows of capital, others have experienced capital outflows. From this, we can draw some conclusions (or speculations): The current altcoin rally appears unrelated to sentiment, but is primarily driven by expectations of a potential ETF. We've discussed and mentioned the issue of altcoin ETFs several times in recent articles. For example, in our July 19th article, we stated that with the approval of Bitcoin and Ethereum spot ETFs, the path for other leading altcoin ETFs seems to be becoming increasingly clear. Based on past experience, the fourth quarter of this year (around October) could mark a new turning point in the history of crypto ETFs, with the potential for more altcoin ETFs to be approved, which would inevitably bring in more external liquidity.

The current rise seems to further highlight this potential ETF expectation, and funds may be investing in Altcoins like Sol and XRP are most likely to be prioritized for early betting or accumulation through ETFs. In other words, the periodic rally since the end of June can be called a mini-alt season, or one driven by policy and ETF expectations (from the US), rather than a traditional, broad-based alt season. If we extend the timeframe a bit further, we can also draw a conclusion (speculate): This is simply the early stages of more institutions joining the cryptocurrency hype, or the early stages of the formation of a major bubble in this cycle. Whether it's MicroStrategy, which has already built scale in BTC, or SharpLink Gaming, which is currently raising $5 billion and plans to continue purchasing more ETH, or other institutions that are currently and may continue to hype potential ETF altcoins, they are creating a new, huge cyclical bubble for us through cryptocurrency. As for how long this new bubble game (opportunity) will last, I can't say at this point. From a short- to medium-term perspective, the frenzied behavior of institutions will inevitably continue to push up the prices of some cryptocurrencies, even to levels that would seem insane to retail investors. From a long-term perspective, as this bubble rapidly becomes more and more crazy, it is also likely to burst periodically, just like other bubbles in historical cycles. If our view (or speculation) above holds true, we can offer a new hypothesis: We will continue to experience greater market volatility in the second half of this year, but all such fluctuations are intended to further spur market fluctuations and create hype. In the fourth quarter of this year, the market may once again present opportunities that will shock retail investors, potentially leading to widespread FOMO. After all, such frenzied institutional behavior will ultimately need to be taken over by retail investors. Of course, some institutions will also take over when the bubble bursts. In this market, the ultimate winners are only a few. We're already in this game, and we've already seen the potential for a big bubble. I can't predict exactly when this game will end, but we can keep a close eye on it from the following perspectives: Which companies will be accumulating large amounts of cryptocurrency in the coming weeks and months, and what exactly will they be buying?

- Given the changes in the stock market value of these companies, can their corresponding stocks continue to trade at a premium? The process from rapid expansion to instant bursting of a bubble is often its most beautiful moment. Opportunities always come to those with sufficient patience and firm conviction. Since we have persisted in this cycle for more than four years (2022–2025), let us look forward to and enjoy the final brief beauty of this cycle. That's all for today. The images and data referenced in the main text have been added to Notion. The above content is merely my personal perspective and analysis, intended for learning and communication purposes only, and does not constitute investment advice.

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