Crypto Market Observation: September May See a Turning Point as AI and Encryption Combine to Create New Opportunities

This weekend I have more time to think, and I would like to share some thoughts on the market.

I believe that the overall trend of the crypto market will become clear only after September. Considering the macroeconomic headwinds, summer liquidity constraints, and quarter-end position adjustments, the real market dynamics may only emerge after the August holidays end and market participants return. Recent market activities show that the rise in most altcoins is primarily driven by short squeezes. Traders are chasing gains influenced by the previous rebound, but there is a lack of support from long-term holders. Most people have already been frustrated during the previous market turbulence. As expected, most tokens that surged sharply subsequently experienced a decline of equal magnitude.

Ethereum has unexpectedly rebounded, led by sectors like AI and cryptocurrencies that suffered heavy losses earlier. In contrast, tokens with real utility, strong fundamentals, or buyback mechanisms have shown resilience—experiencing smaller declines and recovering faster. Syrup, Hype, and AAVE are good examples. Although SPX belongs to the crypto category, its structure is quite different. From this, we can draw the following insights:

1. The demand for Bitcoin is real and lasting.

Traditional capital is gradually entering through regulated channels such as ETFs.

The nature of capital supporting BTC is currently vastly different from previous periods. This is also why large-scale BTC liquidations are unlikely to occur unless triggered by macro events.

2. The internal differentiation of altcoins has intensified.

Ultimately, funds will flow back to altcoins, but it will not be a widespread phenomenon. Only tokens with clear purposes and actual application scenarios are likely to attract these funds. This is why I believe Ethereum will surpass Solana. Regulatory clarity, the continuously growing DeFi adoption rate, deflationary structure, and staking demand together form a strong positive feedback loop. Moreover, due to ETH not meeting expectations for a long time, there are still potential buyers waiting in the over-the-counter market.

3. Tokens supported by venture capital face structural risks

Token unlocks will continue to pressure prices. In the case of insufficient liquidity, the ongoing sell-off by validators and early investors limits the upside potential. This is why I believe that highly valued tokens listed on centralized exchanges have poor prospects. Cosmos ecosystem tokens, in particular, face continuous selling pressure due to their validator reward structure.

4. MeMe Coin has structural advantages

No venture capital unlocks, fair distribution, and fully attention-based cryptocurrencies have structural advantages. This is a purely speculative mechanism, functioning similarly to how it did in the first cycle.

But I think this stage is coming to an end.

The launch of the Pump.fun token generation event and Trump coin marked the peak of attention for these cryptocurrencies. After that, the popularity of these coins began to wane. Even during the rebound in April, SOL's performance was not as good as ETH—if everyone already holds SOL, who will be the marginal buyer when the momentum of these coins fades?

Some cryptocurrencies may still perform well, especially those that have gained popularity through charismatic figures outside the crypto market, such as on TikTok or Instagram. These may still bring asymmetric wealth effects. However, the era of "pet coins" as alpha has ended. Only those cryptocurrencies with strong narratives and strong market recognition have real speculative value.

Interestingly, the fatigue towards venture-backed tokens has opened up new opportunities for fair-launch Web2/3 projects, which will become the source of the next wave of wealth creation.

Keeta is a very good example. However, to seize these opportunities, you need to be active on the chain. When there is information asymmetry, big opportunities always arise. Once everyone knows, there will be no more returns.

This is why I pay closer attention to the on-chain market. Keeta's success has sparked a passion for finding the "next Keeta," and capital is starting to chase similar fair launch altcoin narratives. Just like the case of someone who made a fortune through trading coins—attention guides capital flow.

5. Future Market Trends

So, if meme coins are no longer the opportunity, what will be next?

My view: The integration of AI and encryption technology.

If you follow my updates, you will know that most of my operations during this cycle - after the early stages of SOL and venture capital-supported tokens - have focused on coins and AI.

Just like the DeFi summer, most early AI projects failed after the hype. However, projects that are truly based on practicality are quietly building during the bear market. We have already seen some of these projects emerging on-chain.

As the profits from cryptocurrencies dwindle, attention will naturally shift to new narratives. AI, with its clear practicality, is very suitable to become the next focal point.

Many AI x Crypto projects adopt a fair launch model, echoing the narrative of Keeta.

This is why I have been researching and positioning myself in this field during the calm weeks. There is no need to rush to establish a full position, but I believe that if the market rises strongly again, this field will hold the greatest asymmetrical opportunities.