After the article "Return to Common Sense to Invest" was published on April 23, a friend sent some of his views. There are many of these views that I find very exciting. Today I will share with you some of this friend’s wonderful views.

"As far as I feel, the rise in the first few rounds of bull markets in this industry is simply a constant hype and narrative + the pool is too small, and the funds will surge whenever they enter, which will directly impress most people."

This summary is very well-established.

Let me add a little more: in the previous few rounds of bull market rise, the crypto ecosystem has still emerged with great innovations. In my opinion, ICO, DeFi, and NFT are all counted, and I don’t deny these.

However, these innovations alone will definitely not be able to form the madness we have seen. Because some classic projects born in these innovations are still difficult to compare with traditional good companies in terms of cash flow, and even when valuing their governance tokens with limited value in cash flow, we all find that the prices of those governance tokens are relatively high.

However, is this exaggerated surge only available in the crypto ecosystem?

Not.

There have been A-shares that everyone looks down upon the most.

In the first bull market of A-shares from 1991 to 1993, the Shanghai Composite Index rose from the lowest 127 points to the highest 1558 points in just two years, up 12 times.

This increase is no less than Bitcoin's increase in the last two rounds (2019 ~ 2021 ~ 2022 ~ 2024 ).

It should be noted that this is the index's increase.

I didn't find out the rise of those monster stocks back then, but if we guess, we can imagine how exaggerated the rise of individual stocks would be in that environment.

I think they should have told stories that were no less than Bitcoin and had a lot of "imagination space" back then.

It seems that nothing new is under the sun.

However, there is another obvious difference between crypto ecosystem and A-shares.

When A-shares were launched, they only faced the mainland Chinese market, which was still under reform and opening up. The scale and size of that market are still very small. But even so, it can blow up such a big bubble.

When the crypto ecosystem was launched, it directly faced a global market, or a market without thresholds and licenses. The scale and size of this market are far greater than the A-shares in the past, so it is not surprising that the crypto ecosystem can blow up such a big bubble.

History will not repeat, but it always poses the same rhyme.

"No matter whether he is a blockchain or not, this story must have had a huge wealth effect in the early days. Regardless of whether he can generate real value or not, it will continue until the game cannot be told. Or this feature is not from the blockchain industry. Instead, blockchain just fits this more essential financial market characteristics."

I think this sentence comprehensively summarizes the characteristics of all financial markets in the early stages. Such stories can be staged in the early days of A-shares, let alone the crypto ecosystem.

So the bubble we see in the crypto ecosystem is not special and no exception.

Since it is not special or exceptional, the bubble will eventually burst and things will eventually return to their original state.

"He must have had many gamblers coming in the early days, 100% because the pool is small. But once the pool is big, this gameplay is 100% unsustainable. From this perspective, pump is a miniature version of the blockchain industry. Its rise and gradual silence are completely the history of blockchain development as of now."

This passage expresses an important point:

That is, the way of playing by gambling is 100% impossible to continue to promote this ecosystem.

What makes it wonderful is that it vividly uses pump.fun, an application that has risen in this round of market, to vividly portray the entire process of the game development, and points out that this gameplay is unsustainable.

Having written this, what I want to express is:

I have always been very optimistic about the future development of the crypto ecosystem. But while we are optimistic, we cannot cover up the serious problems it is currently facing, and we cannot "deceive yourself" to think that these problems are "normal", these problems are very special, and these problems can be exceptional.

Only by recognizing these problems, returning to common sense and the original can we better walk the next path and evaluate and participate in projects in the ecosystem in a healthier way.