Victory belongs to the long-termists: June 2023 Secondary Market Trading Strategy

June 2023 Trading Strategy: Long-termists Win

Old Fashion Research partner Xin.Sats shares their June 2023 secondary market trading strategy and the lessons learned, emphasizing the importance of taking a long-term perspective on market fluctuations during the investment process. They outline investment opportunities in various Ethereum tracks, and speculate on investment logic related to Bitcoin and Cosmos ecosystems.

Zooming out, we are still in a long bear market and stablecoin quantities have not significantly increased, but it is likely that we have passed the lowest point. Therefore, for long-term investors, decision-making becomes relatively easy in the second half of the year: buy low and hold, waiting for opportunities. Sudden changes in sentiment, such as SEC policies, exchange FUD, and other risk events, are good opportunities to buy low. The fund orientation of PvP in the market and the low liquidity after market makers withdraw provide an excellent environment for manipulators. The strong price performance of new exchange platform coins, such as those created by the 3ac Royal team, and newly selected targets like BCH in EDX, all indicate that investors’ attention in the bear market is more easily concentrated, and the popularity of meme coins is also a reaction to the lack of innovation.

As the largest and most prosperous Ethereum ecosystem, the innovative track has been overdrawn by a large amount of primary market funds during the bear market, and the alpha opportunities for second-line leaders to layout first-line tracks are hard to find. For example, Uni in Dex, Aave in lending, and Lido in LSD have already been beta-tested by the market. Limited opportunities lie in the second-line leaders in the above-mentioned ecosystems, such as UniV4’s ecosystem projects and LSD’s LSDFi. If the ceiling for first-line leaders is the top 30 in market capitalization, then second-line leaders may only rise to around 200-300.

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In summary, the overall market lacks paradigm-shifting investment opportunities and alpha is hard to find. The strategy for stable and long-term investors should be to wait for the market’s troughs caused by fluctuations, try to reduce the cost of holding mainstream assets, and gradually increase their positions while maximizing market beta returns. More aggressive investors and Degen can dynamically capture opportunities in second-line leader’s new projects and meme-type assets driven by sentiment to obtain relatively excess returns, but they need to control their position risks.

Reference: https://xingpt.substack.com/p/50c

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