Introduction

The cryptocurrency world is stirring once again. Do you still remember the "Madman" of the crypto circle in 2017, @liujia0224?

That individual who diligently posted daily, with a "responsible, focused, sincere" attitude, guiding countless traders in the cryptocurrency world as the "Digital Currency Trend Madman".

This public account used to be a daily must-read for Bitcoin traders. Whenever an article was released, it instantly garnered over 100,000 views, serving as the cryptocurrency world's "weather report," accurately predicting the ups and downs of cryptocurrencies such as Bitcoin, Litecoin, and Ethereum.

On social media, he was once a top-tier presence, known to all. His whale group had such a high threshold that it was jaw-dropping to enter (rumored to start at 10 Bitcoins). Those who could join the group were either wealthy or influential, making it an implicit symbol of status.

However, after several rounds of bull and bear markets, the domain of Key Opinion Leaders (KOLs) shifted towards YouTube and Twitter, and rumors of the "Madman" leaving the circle surfaced multiple times. Now, as the cryptocurrency world stirs once again, what is that former "Madman" who once dominated the crypto world doing?

This is an "OKX Friends" series interview. This series aims to explore the professional stories, industry insights, and lessons of KOLs from different backgrounds for the learning reference of novice users. This interviewee is Mercy, @Mercy_okx. Welcome to follow along~

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Article Guide:

Chapter 1: Madman's Words—The Past

Chapter 2: Madman's Words—The Present, The Future

Chapter 3: Madman's Words—Advice for Newcomers

Chapter 1: Madman's Words—The Past

1. Why did you enter the circle? The first time you knew about BTC, it was only around 600 RMB?

Mercy, hello, everyone, I am very happy to have this space with OKX Friends. Let me briefly introduce myself first. I have a Master's degree in Finance. I have worked in several large financial institutions, including securities firms, trust companies, and insurance companies, so I have a deep understanding of various financial products and financial derivatives.

I started trading stocks in 2008 and fell in love with trading at that time. Of course, when I was young, I also experienced all the accidents that every trader must go through, such as margin calls and losing all my hard-earned profits made over several years in just a few days. That year, the stock market circuit breaker happened.

While trading stocks, I also enjoyed exploring new trading targets. It was in 2013 when I dabbled in precious metals trading, collectible coin trading, and Bitcoin. The most impressive to me was Bitcoin. At that time, a cryptocurrency exchange had just been established and was heavily promoted on Baidu. They were offering 0.1 Bitcoin for free upon registration. The first time I saw the price of Bitcoin, it was over 600 RMB. During the month I participated in trading, Bitcoin surged from 600 to 8000 RMB, marking the rapid bull market of 2013. I did not invest much during that period as my main focus was on A-shares, but I still managed to earn 100,000 RMB. However, as the price fell, I kept trying to buy the dip, and in the end, there wasn't much of that money left.

But it planted the seed of my passion for Bitcoin trading. Bitcoin trading has three advantages over A-shares: first, no trading fees; second, 24/7 trading; and third, instant settlement. For someone who loves trading, these three points are truly heavenly. However, Bitcoin entered a bear market in 2014 and 2015, with minimal volatility, coinciding with a bull market in A-shares, so my attention shifted away from Bitcoin.

By 2016, the A-share market was bearish, and I once again thought about Bitcoin. I realized that if I couldn't forget about it, why not try working at an exchange? With my years of experience in A-shares and cryptocurrency trading, I smoothly entered the exchange as an analyst.

From then on, I embarked on my cryptocurrency journey, or as we say now, entered the crypto industry.

2. Why start a WeChat public account? How did it become the top self-media in the crypto circle?

Starting a WeChat public account was a coincidence. At that time, WeChat public accounts were very popular, representing the beginning of the era of self-media. I also liked to try new things. I casually started writing on Huobi, and the content was all about finance, not cryptocurrency. With zero followers initially, the second article had over 2.5 million views, showing me the power of WeChat public accounts. So, I thought if I could share my years of stock trading experience in the crypto circle, wouldn't that be a strategic move?

As expected, due to sufficient expertise, my follower count quickly surpassed the few analysts at that time, and I consistently held the top position on the rankings until the public account was banned five years later.

Regarding community building, I didn't particularly focus on it because running the public account already required a lot of effort. I interacted with the community solely through the comments section of the public account. Through writing on the public account, I received continuous positive feedback, maintained a daily update for over 6 years, with 5 of those years on the public account. The eccentric style of the community naturally developed.

The process of content output has been quite bumpy. 2017 was a year of the most rapid fan growth, as the money-making effect was in full swing, and many trading websites had a large number of copycat beneficial effects. By the second half of 2018, the market suddenly cooled down, falling into silence. The things I wrote were no longer read, users kept losing money, and every day was filled with curses. It made me somewhat question life. At that time, almost 90% of the industry's major KOLs had called it quits, but I chose to persist because I believe Bitcoin still has a future. I believe blockchain is the technology of the future. As the founder of blockchain, Bitcoin's future is bright.

It was also in that year that I continuously recharged everyone's faith, talking about Bitcoin's future, telling everyone that Bitcoin would replace gold and was more likely to become a strategic reserve for countries, becoming the world's global currency. Ultimately, it will be priced in Satoshis, with 1 Bitcoin equaling one hundred million Satoshis. Even today, I still think this way.

Until 2021, the market once again saw the dawn. My fans were ecstatic. They said, "Luckily, you held on at that time because you made millions, changed lives." There were countless such stories. At that time, I felt I had truly succeeded. I not only changed myself but also changed those who were willing to believe in me. But looking back later, I realized it was just catching the right trend. If these efforts had been put into the A-share market, it might have been difficult to change lives to such an extent. So, the choice is greater than the effort.

Chapter 2: The Madman's Words — Now and Future

1. How will the U.S. treating cryptocurrency as a national asset reserve affect the crypto market in the short and long term?

First, let's talk about the short-term impact. Trump's policy is a bullish landing but bearish policy. Why do I say that? Because the market's expectation for a strategic reserve was to drive the U.S. government to buy Bitcoin with real money. However, Trump's policy ended up seizing assets to create a Bitcoin strategic reserve. Therefore, in the short term, it was clearly below expectations, and the market reacted to this news by directly selling and showing a waterfall-like response.

Looking at the long term, the significance of the U.S. strategic reserve is enormous. First, the U.S. dollar is the world's most important currency. Previously, world sovereign states only reserved dollars and gold. Now that Bitcoin is included in the U.S.'s strategic reserve, it means that Bitcoin will be recognized by the world in the future. Even though the U.S. is not buying now, if other countries want to include it in their strategic reserves, it is clearly necessary to buy to increase holdings. Logically, it is similar to the Grayscale Bitcoin Trust back then—it can only buy, not sell, but the volume may be hundreds or thousands of times that of Grayscale. Therefore, the expected long-term price and boost to the price are clearly visible.

Currently, we need to pay attention to which country will be the second to propose a strategic reserve. I believe that it won't be too long before countries follow one after another.

In addition to being a store of value, from a monetary perspective, the deeper significance of incorporating Bitcoin into strategic reserves is Bitcoin's liquidity. Bitcoin is more easily circulated compared to gold, easier to carry, and can even be taken anywhere in the world by simply remembering the private key in your mind, free from any national currency restrictions. This is a functionality that no current currency or gold possesses. If such a currency were to become a global currency, it would mean that billions of people would have a small amount of Bitcoin in their wallets for circulation and payments. The era of a unified global currency would arrive, and at that time, Bitcoin would serve as the value anchor, with all goods fluctuating around Bitcoin. However, this may be the ultimate form.

We just need to understand that until the ultimate form arrives, the price of Bitcoin is not considered high at any point. This process will continuously drive up the price of Bitcoin. As for how many years it will take, I believe there is still a long way to go. My attitude towards Bitcoin is a long-term bull market. The industry is far from complete, and innovation has just begun. Bitcoin is meant to be left to the next generation.

2. Currently, all the benefits promised by Trump have been realized. What other news could drive the market further up, or do you think the market has already turned bearish?

In the short term, indeed all the benefits have been realized, and there are no new policies to look forward to. The only hope we have for the rest of the year is that the Fed could implement QE again in the second half of the year to increase market liquidity. Based on the series of operations since Trump took office, Trump is creating an artificial economic crisis to pressure the Fed to inject liquidity. So, we are currently in the midst of this man-made crisis, feeling uncomfortable is completely normal. However, we need to have a deeper understanding of the word 'crisis,' as there is opportunity in crisis. Each crisis washes away a large number of weak long positions, but ultimately, the market will rebound. Those who dare to add positions in the pit will ultimately achieve great results. Since we know that Trump is creating a crisis, the pit will eventually be filled back up. It's just a matter of how deep the pit will be dug, requiring more of our contemplation.

Regarding the bull and bear markets, focusing solely on Bitcoin, I believe we are still in a bull market. Currently, both on-chain data and fund situations do not align with bear market logic. It is more likely that we are in a pullback phase of the bull market. In previous bull markets, pullbacks have often been in the range of 30-40%. So, if we trace back from $110,000, the approximate low point of the pullback should be around $66,000-$77,000. The market has already touched this range, but whether it has hit the bottom or not, we can consider the trend of the US stock market as well. The US stock market has seen three consecutive weeks of large bearish candles on the weekly chart, with a drop of over 10%. This level of retracement often does not end quickly. In past crises, a 10% drop in the US stock market is just the beginning, with a 20% drop providing a possible buying opportunity, and a 30% drop being a stable win. Therefore, I personally think that $77,000 for Bitcoin is most likely not the bottom of this retracement. In the short term, $77,000 is a strong support level. Therefore, with the oversold rebound of the US stock market, it is highly likely to touch above $90,000. For short to medium-term swing traders, selling above $90,000, waiting for a correction, and then buying back may be a good choice.

Overall, Bitcoin does not yet meet the criteria for a bear market, but the probability of a further pullback is high, making it a situation for selling high and buying low.

In the long run, I believe the following factors will drive Bitcoin to new heights:

First, the Federal Reserve's re-release of liquidity, as previously discussed.

Second, the globalization of Bitcoin's strategic reserves, with follow-ups from various countries' strategic reserves, will bring tremendous incremental value to Bitcoin.

Third, and most importantly, if mainland China legalizes cryptocurrency, it will be a huge catalyst. In terms of purchasing power, no country can compete with the Chinese people. The general public has money in their pockets but lacks good investment options. The stock market has been around 3000 for over a decade, with continuous expansions but no real growth, leading to significant losses. Nowadays, even the real estate market is not very promising. With the end of the demographic dividend, real estate has also been in a bear market for over ten years.

So, if this really happens, trillions of dollars could flow in within minutes, easily doubling Bitcoin's price. However, if China opens up, it will definitely not open up to the current cryptocurrency exchanges but will likely create a Chinese version of an ETF. Transactions and trading will be limited within the country, with no withdrawals allowed, but the price will be anchored to Bitcoin globally. In other words, they will build their own pool, conduct hedging activities overseas, as after all, the foreign exchange wall cannot collapse; this is the foundation of the economy.

3. Which sectors are worth watching in the future, and what types of projects may generate new alpha returns?

Alright, I'll mention a few sectors that I believe have good opportunities for everyone to consider.

1. RWA: Real-world asset tokenization, a broad and impactful concept. It can first integrate with DeFi and traditional finance. DeFi is already mature enough in the cryptocurrency world. If blockchain technology can be combined with the traditional market, the potential is limitless. For example, tokenized bonds can be used for collateralized loans, and tokenized equities can greatly increase market liquidity, providing significant assistance to the future economic environment. Additionally, splitting real estate ownership using tokens to gain future income and growth, as well as tokenizing art ownership, are examples of virtualizing real-world assets. In conclusion, specific opportunities for implementation are visible, but the step of asset on-chain requires endorsement from traditional large institutions.

2. AI: Artificial Intelligence speaks for itself, being the hottest topic today and a sector that can continuously innovate in the future. The integration of AI and blockchain mainly manifests in AI algorithms. AI requires large amounts of data for machine learning, and blockchain conveniently protects data privacy, even transforming data into a valuable transmission, enabling the evolution of centralized AI towards a more secure decentralized form. Currently, apart from some simple AI agents, most are still in the concept hype stage, far less practical than centralized AI. However, there will always be bubbles; the market seeks dreams, leading to speculative expectations.

3. Public Blockchain: This is a recurring topic, with every bull market cycle seeing a hype around public blockchains. During each cycle, a few new chains are also hyped up, but the alpha often lies in these new chains rather than the old ones — this is the logic of standing on the shoulders of giants. Before the convergence of thousands of chains into one, public blockchains will continue to iterate, constantly breaking the blockchain's "impossible triangle" until they catch up with the current internet transmission speed and cost.

4. Payment: Cross-border payments play a crucial role in the global integration process. Traditional finance is known for its slow settlement and high costs. The advantages of using blockchain for payments are evident, but these pitfalls have mostly been occupied by stablecoins like USDT and USDC. Looking ahead in the payments sector, what we need to focus on is the integration of payments with smart contracts. For example, some IoT devices can earn data value through data transmission. Furthermore, there are blockchain projects aiming to replace the banking systems in regions such as South America, Africa, and Southeast Asia. In many underdeveloped regions, a large number of blockchain projects are being used to replace the banking system because the cost of opening a bank account is too high for the poor. For instance, my household helper was previously paid in fiat currency, but the traditional financial system she used for settlement was slow, cumbersome, and incurred high fees. Later, I taught her to use an exchange, settle in a stablecoin, and then convert to the local currency, which was more convenient and incurred lower fees.

5. MEME: The MEME coin trend has passed, but this phenomenon will not end. Low-cost, high-return P2P gambling will always exist in the casino because it aligns with the gambling mentality. In the future, celebrities and brands may also issue their own tokens on the blockchain, which could open up more possibilities. For example, tokens could be used to exchange for company goods. The current hype is only the most basic form, and eventually, MEME will be empowered, whether it is in terms of brand value or consensus value.

From a sectoral perspective, the overall logic is to hype new projects rather than old ones. The future significant opportunities will still lie in new projects. About 90% of old projects cannot escape the fate of each round being lower than the previous one. After all, for most project teams, the easiest way to make money is to launch a new project rather than trying to save those old projects with scattered tokens.

4. Traditional Financial Institutions Are Entering the Crypto Space. In your opinion, which crypto assets will these massive funds allocate to? Where will the funds flow in the future?

Looking at traditional capital, we can consider four directions: strategic reserves, ETFs, Grayscale, and Trump funds.

The types of tokens in the US strategic reserve, such as BTC, ETH, SOL, XRP, etc., are likely to be the first assets traditional institutions will allocate to when entering the crypto space. For most traditional institutions, they do not understand the crypto space at all. They invest blindfolded with the investors' money — they allocate just for the sake of allocation. Those projects that may go to zero are absolutely off-limits for these institutions. With the endorsement of strategic reserves, traditional funds won't have to bear the blame anymore.

Another issue is the future approval status of major ETFs in the United States. Currently, only BTC has been approved. ETH, SOL, XRP, LTC, and others are in preparation.

The allocation of Grayscale Trust represents the direction and expectations of early institutional investors in the U.S. crypto sphere. Currently, Grayscale Trust's single-asset trusts include BTC, ETH, BCH, ETC, LTC, SOL, LINK, MANA, FIL, BAT, LPT, XLM, ZEC, and ZEN.

Finally, there is the Trump Crypto Fund, which also serves as an important reference benchmark. Currently, it holds BTC, ETH, TRX, LINK, AAVE, ENA, MOVE, ONDO, and SEI.

Chapter 3: Madman's Advice - Advice for Newcomers

1. For newcomers who have just entered the cryptocurrency field, what advice do you have for them? How should they start learning and gaining experience?

For newcomers, the current cryptocurrency market has a high barrier to entry compared to when we first entered the market. It's not as simple as buying and selling anymore. You need some foundation to get in. Over the years, the crypto sphere has spawned many different variations, especially in terms of on-chain content. It can be said that what traditional finance had has been copied over, and what traditional finance lacked, the crypto sphere has innovated itself. This requires a significant amount of financial knowledge, a strong blockchain background, and an understanding of the internet.

Trading non-stop 24/7 can be exhausting for newcomers. Therefore, for newcomers, it's essential to first understand the entire framework of the crypto sphere, such as secondary market trading, primary market analysis or macro analysis, exchange-related businesses, on-chain explorations, DeFi, etc. Newcomers need to focus on specific areas, fully master a certain area, accumulate experience through practice, talk to industry veterans more, and learn from their experiences, especially the pitfalls others have encountered, as they are the most valuable asset for newcomers.

Lastly, rapid learning is key. Only by running faster than others can you have the opportunity to achieve great results.

2. In the market trading process, what common misconceptions or traps do newcomers need to avoid?

Regarding trading, I have been in the market for almost 20 years, which is probably longer than many young folks in the space have been alive. I'm not that old, I just started trading while in school. I've encountered many pitfalls over the years. I believe the most important thing is to adjust your mindset. I often say in my tweets that trading is a marathon, not a 50m sprint. Don't expect to get rich overnight; instead, think long-term. As long as you're alive, opportunities will always be there. Therefore, I focus more on asset allocation, how to ensure stable annual growth of assets, which are risky assets, which are cash assets, which are assets for preserving value, and how to allocate based on your risk preferences.

If your current assets are not yet abundant, work hard in this industry, first figure out how to make money, and don't solely focus on trading for quick riches. I have seen too many get rich quick schemes, only to eventually give everything back to the market. Many times, the money earned was based on luck and lost through a lack of skill.

Another important point is not to take out loans or use money that affects your daily life for trading, as this will impact the most crucial aspect of your trading: mindset. Once your mindset is compromised, all your actions will distort. If you realize your mindset is not in the right place, immediately stop trading, take a break, and then start afresh.

If you engage in leverage, always remember to set a stop-loss before entering each position. This is key to survival. If you cannot adhere to this rule, please do not engage in futures or leveraged trading.

3. How do you suggest newcomers establish their own analysis framework and model? Are there any practical tools or methods you can recommend?

Regarding trading, I believe the most important thing is not just reading books but actually starting, allowing yourself to experience failure, accepting every stop-loss, acknowledging your imperfections, and even stupidity at times. Learn to respect the market first. Therefore, my advice is to start with very little money, experiment, make mistakes, identify your issues in trading, and then work on resolving them to find a trading method that suits you.

Once you have accepted your failures, you can start learning some theoretical knowledge, understand indicators, and observe the candlestick patterns to grasp their operational rules. Here, I recommend a few books that I find quite helpful in trading: "Wyckoff Method," "Japanese Candlestick Charting Techniques," "Reminiscences of a Stock Operator," "Turtle Trading Rules," "Stop-Loss."

Ultimately, by combining various types of knowledge, you can increase the success rate of your market judgments. Trading is not a simple path; it is a system. It is difficult to obtain the correct result from a single indicator. Even after all these years, I am still continuously improving and learning. Trading is a path of hard work and dedication. Therefore, if there is a better way to make money, I suggest not choosing this path. It is a risky path to wealth, with most people living mediocre lives. Those who can achieve stable returns are already rare. Most of the time, I feel that success in trading requires some inborn talent, or rather, whether your personality is suitable for trading. The key is to find a way that suits you to earn money.

Conclusion

Mercy is honored to have invited the legendary trader to share his insights. "Responsible, focused, sincere" are the qualities I deeply perceive from the teacher. In the dull market conditions, I hope everyone can gain something and regain confidence from his sincere and profound insights!

Finally, Mercy has excerpted a quote from the recommended book by the trader - "Reminiscences of a Stock Operator" to share with everyone:

「There's nothing new on Wall Street because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again in the future.」

Risk Warning and Disclaimer

This article is for reference only. It represents the author's views and not those of OKX. It is not intended to provide (i) investment advice or recommendations; (ii) an offer or solicitation to buy, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. We do not guarantee the accuracy, completeness, or usefulness of this information. Holding digital assets (including stablecoins and NFTs) involves high risk and may experience significant price volatility. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial conditions. For your specific situation, please consult with your legal/tax/investment professionals. Please take responsibility for understanding and complying with relevant local laws and regulations.

This article is a contributed submission and does not represent the views of BlockBeats.

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