Article source: Words Beyond Words
With the recent Israeli attack on Iran, the market has once again experienced panic, with Bitcoin falling back to around $105,000, and Ethereum dropping from around $2,800 to around $2,500...
In fact, if we simply review the past, we can see that whenever the market encounters unexpected events, people are always driven by panic. In contrast, some institutions and whales often take the opposite action of retail investors during these black swan events. For example, we mentioned in our previous article that BlackRock accumulated approximately 220,000 ETH in just the past 30 days.
On one side, retail investors are selling their chips due to various news, while on the other side, some institutions or whales are continuously buying and accumulating. Isn't this interesting?
To be honest, although I pay attention to the macro perspective, I basically won't change my decisions or plans due to short-term events. As for the recent conflict between Israel and Iran, I've seen some online speculation about a potential full-scale war or even nuclear conflict, which I think is somewhat alarmist (or they're just trying to attract attention or traffic).
Last year (2024), Israel and Iran had already experienced two relatively large-scale military conflicts:
One was in April, when Israel conducted an airstrike on the Iranian consulate in Damascus, Syria, killing several high-ranking Iranian officers. Iran responded by launching about 170 drones and 150 missiles. The result was that both sides chose to maintain "tactical calm".
Another was in October, when Iran launched about 200 ballistic missiles at Israel, and Israel subsequently counterattacked, conducting airstrikes on about 20 targets within Iran. The result was that both sides claimed to have "achieved their objectives" and stopped.
Then there was the recent attack (June 13th), where Israel conducted a large-scale airstrike on over 100 nuclear facilities, military bases, and senior officers' residences in Iran. Iran subsequently launched over 200 missiles as a courteous response.
1. Is the Altcoin Season Dead?
As for whether Israel and Iran will continue large-scale confrontation or pause for a few months, we'll wait and see. But if the situation gets out of control, we can't rule out further significant market volatility in the short term.
It's clear that some macro events can directly impact the market. It seems that every time other countries are at war, besides the citizens of those countries, our wallet balances are also affected. Just when ETH was about to gain momentum, Israel struck, and ETH softened again. Just when everyone saw a glimmer of hope, it seemed to be extinguished.
Theoretically, if ETH cannot achieve a true breakthrough in price, the anticipated new Altcoin season may not arrive for now. When I say it may not arrive now, it doesn't mean the Altcoin season is dead. We were previously optimistic about the Altcoin season, but now we're being more conservative and will avoid providing specific time predictions.
As for what to do next, it can be summarized into three main considerations: maintain system (personal strategy) simplicity, avoid emotions, and focus on data changes (such as the ETH/BTC ratio and ETF fund flows we previously discussed).
If Altcoins truly want to rise, it's often quick, and potentially doubling in 1-2 weeks. Using the Altcoin Season Index we previously shared, historically, when the index is around 15-20, it often provides strong support, typically signaling a significant stage of Altcoin growth. As shown in the image below.
Of course, reaching the support level doesn't guarantee an immediate reversal, nor does it mean all Altcoins will rise. It's merely a potential cyclical signal. To be more explicit, as long as Bitcoin remains above $100,000, and no severe black swan events occur, we're likely to see some Altcoins outperforming Bitcoin.
Additionally, Altcoins can surge extremely quickly, causing FOMO, but they can also drop brutally, with many Altcoin bear markets potentially dropping 90% or even going to zero. If you must play, focus on Altcoins with good ecosystem and projects you truly understand. Don't blindly trust recommendations or commit to long-term Altcoin relationships. This cycle's Altcoin market (especially on-chain) looks more like a "slaughterhouse" for retail investors.
Regardless of these considerations, the goal for all operations in the second half of this year should be to preserve profits. The later it gets, the less worthwhile it is to take risks, unless you have a high-risk appetite or are a gambler.
2. The Compliance Path of Cryptocurrency
In recent articles, we've focused on stablecoin development, and it's not an exaggeration to say that stablecoins are the most breakout narrative of this cycle. As of writing, stablecoin market cap has exceeded $250 billion, growing by $89 billion in the past 12 months. As shown in the image below.
If development continues at this pace, stablecoin market cap could potentially reach $1 trillion in 4-5 years.
While stablecoins continue to increase, the overall cryptocurrency market cap hasn't performed as well as initially expected. On one hand, institutions or investors are converting more fiat into stablecoins, and on the other hand, many stablecoins don't seem eager to convert to other cryptocurrencies.
However, with future U.S. cryptocurrency legislation, this might change. Currently, two important bills worth our attention are 'The GENIUS Act' and 'The CLARITY Act'. The former is a crucial bill to regulate and legalize the stablecoin industry, while the latter will establish clear rules for classifying digital assets as commodities or securities.
Based on current progress, these bills are likely to pass during Trump's term. From a longer-term perspective, the passage of these bills will greatly benefit the DeFi sector, which is one reason we've consistently recommended focusing on this area since the beginning of the year.
Additionally, last week, Circle (the company behind USDC) went public on the New York Stock Exchange, with its stock (CRCL) starting at $31 per share. By the end of the first day, it had risen about 3 times and is currently trading around $133, as shown in the image below.
