In recent months, the overall rise of crypto assets is related not only to the US government's continuous policies favoring crypto assets and the crypto ecosystem but also to listed companies' collective purchase of crypto assets.
The former is a long-term positive factor for the ecosystem, while the latter is a direct driver of token prices. I have always been very cautious about the latter, as it is not only unfavorable for investors to buy at low prices but also easily accumulates bubbles and risks in the short term.
Listed companies' collective buying of crypto assets first started with Bitcoin, led by MicroStrategy and quickly spreading to other listed companies.
Subsequently, this trend spread to Ethereum. First, Ethereum's co-creator raised funds in the name of a listed company to purchase Ethereum, then Wall Street companies represented by Tom Lee joined the buying spree, attracting new companies to continuously join the "battle".
Just as listed companies began purchasing Ethereum, Animoca Brands' founder started sending messages on Twitter, hinting at the possibility of companies mimicking the previous two by targeting BAYC's ApeCoin. Soon after, news spread that Fat Penguin's token PENGU was being massively acquired.
These previous operations were only targeting tokens, but from last weekend, funds began targeting classic Non-Fungible Tokens: over the weekend, large funds spent $13 million to bulk buy CryptoPunks, and other funds bulk purchased classic NFT art Squiggles.
This week, Gamesquare publicly announced the establishment of a treasury fund to purchase Non-Fungible Tokens, with an initial fund of $10 million, expecting a 6% - 10% return rate.
I focus on whether these operations are long-term or short-term trend-following. If it's a long-term operation, it will certainly benefit the ecosystem and asset development, at least providing a relatively solid price foundation. However, if it's short-term trend-following, such swarming operations will increase asset volatility and potentially cause significant market chaos in the future.
Among these companies, MicroStrategy is a familiar company to us. This veteran has experienced several Bitcoin cycles and remains loyal to Bitcoin even at the bear market bottom. Michael Saylor even says he has no children and plans to follow Satoshi Nakamoto's approach of permanently locking his Bitcoin holdings. This is a solid foundation.
Ethereum's co-creator's operation is a new move, and its future depends on the company's performance during the bear market. However, based on his current statements, I tend to believe his action is strategically holding Ethereum for the long term, not a short-term operation.
Regarding Tom Lee's operation, while I somewhat agree with his basic viewpoints, I can also see the typical Wall Street style I dislike.
Therefore, among companies purchasing Bitcoin and Ethereum, I tentatively consider only these three companies' operations to be based on their understanding of the ecosystem. For other companies, I believe they are likely just following the trend. They see this method of injecting crypto assets into shell companies can quickly boost garbage stock prices in the short term, so they imitate en masse.
The batch purchase of Non-Fungible Tokens is even more complex.
The disadvantage of Non-Fungible Tokens is their far lower liquidity compared to tokens; the advantage is that once the atmosphere builds up, their price increase might be much higher than typical tokens.
Therefore, the most suitable method for such assets is to quietly, slowly buy in, hold long-term, and then possibly gain substantial profits. The current high-profile publicity and actions do not seem like a long-term holding attitude.
If we set aside the fund purchases and only look at the fundamental aspects of these assets, I feel they essentially haven't changed fundamentally, or at least not currently.
Bitcoin doesn't need fundamental changes, so it doesn't matter.
However, Ethereum requires fundamental changes, especially the breakthrough of application scenarios to support continuous price increases. Currently, whether it's stablecoins, RWA, or AI + Crypto, although there might be some small applications, I don't see any systematic or large-scale breakthrough at the ecosystem level. Currently, it's mainly speculative expectations.
In Non-Fungible Tokens, CryptoPunks and NFT art are similar to Bitcoin, not requiring fundamental changes. But projects like Fat Penguin and BAYC are different - they need fundamental changes and application scenario breakthroughs. Currently, no such application scenario breakthroughs are visible.
So overall, this round of companies swarming to buy crypto assets, whether tokens or Non-Fungible Tokens, I believe many operations are accumulating risks. In the short term, price surges make everyone happy, but if fundamental aspects and application scenarios don't break through, when speculative expectations cannot be realized or sustained, the price collapse might be as spectacular as the current price surge.
