The cryptocurrency market is evolving rapidly, and seasoned investor Shenyu offers a compelling perspective on the current bull cycle. Speaking during the Hong Kong Web3 Carnival, he challenged conventional wisdom by suggesting that this bull run may not feature a traditional altcoin season—a significant departure from past market dynamics.
His insights, grounded in macro trends, technological shifts, and behavioral changes among market participants, provide a nuanced understanding of where we stand in the current market cycle and what investors should expect moving forward.
Why an Altcoin Season Might Not Happen
Historically, after Bitcoin’s price surges, capital flows into altcoins, triggering what’s known as the “altcoin season.” But Shenyu argues this pattern may not repeat in 2025.
👉 Discover why this bull market could break all previous patterns
Bitcoin currently emits $60–70 million in new supply daily. Post-halving, that will drop to around $30–35 million—a major reduction in sell pressure. However, unlike previous cycles, market participants have changed, altering how capital moves.
Miners, for example, have hedged risks months in advance thanks to the approval of Bitcoin spot ETFs in January. Major mining firms have also relocated operations to lower-cost regions like South America and Africa, allowing them to maintain healthy gross margins (10–20%) even with older hardware. With Bitcoin’s price rising ahead of the halving, their economic stability reduces forced selling—a key factor that previously pressured altcoins.
Moreover, capital inflows are now funneled primarily through ETFs, which are overwhelmingly Bitcoin-focused. This structural shift means less speculative liquidity is spilling into altcoins early in the cycle.
Shenyu believes we're currently in the mid-stage of a bull market—past the absolute bottom, with new narratives emerging, but not yet in a high-leverage, FOMO-driven frenzy. He cautions against relying solely on historical data or single indicators to time the market top.
Instead, he advocates for dynamic asset rebalancing: continuously observing market phases and adjusting portfolios accordingly. This strategy not only preserves capital during downturns but can also enhance long-term returns.
The Evolution of the Bitcoin Ecosystem
Once seen as a static store of value, Bitcoin’s ecosystem is now experiencing unprecedented innovation.
Shenyu notes that while the Bitcoin mainchain remains focused on decentralization and stability, most innovation is happening at Layer 2, sidechains, and rollups. These layers enable NFTs, DeFi primitives, and smart contract functionality—features once thought impossible on Bitcoin.
The rise of ordinals and inscriptions sparked debate, with some core developers like Luke Dashjr calling them spam. But Shenyu sees this as part of a natural three-way governance process: developers propose, miners vote via hash power, and users decide through adoption.
This decentralized decision-making ensures no single group controls Bitcoin’s evolution—its greatest strength.
Even if certain innovations seem crude at first (like early Ethereum dApps), they lay the groundwork for future breakthroughs. The recent surge in BTC-based assets seeking yield—similar to Ethereum’s DeFi boom—suggests demand is building for Bitcoin-native financialization.
While the final form of the Bitcoin ecosystem remains unclear, Shenyu views current experiments as essential steps toward maturity. “We need to give it time,” he says. “Revolutionary developments will emerge.”
Modular Blockchains: The Next Frontier
One trend Shenyu is closely watching is modular blockchain architecture.
After years of grappling with scalability—first on Bitcoin (2017–2018), then Ethereum—the industry has converged on modularity as a solution. Instead of monolithic chains handling execution, settlement, consensus, and data availability all at once, modular blockchains specialize and outsource functions.
Examples include:
- Celestia (data availability)
- EigenLayer (re-staking for security)
- Rollups (execution layers anchored to mainnets)
This approach drastically reduces costs and improves throughput, enabling blockchain use cases that feel seamless to end users—without them even realizing they’re interacting with decentralized tech.
Shenyu believes this shift will unlock a $100+ billion market, making it one of the most promising investment themes of the cycle.
The Future of Custody and User Experience
As institutional adoption grows—fueled by ETFs and compliant custodians like traditional banks—the way users store and interact with crypto is changing.
Cobo, where Shenyu has been involved since 2017, operates in this evolving custody landscape. But instead of competing directly with banks, Shenyu sees synergy.
The real breakthrough lies in keyless wallet technology, such as:
- MPC (Multi-Party Computation) wallets
- Smart Contract Wallets (SCWs)
- Passkey-based Account Abstraction (AA) wallets
These innovations allow users to enjoy decentralized security without technical complexity—holding keys without feeling the burden.
In the future, most users won’t need to manage private keys. Blockchain will run quietly beneath apps they use every day, much like TCP/IP powers the internet today.
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Balancing Decentralization and Practicality
Has the industry sacrificed decentralization for usability?
Shenyu acknowledges trade-offs. The “impossible triangle” has led to compromises: some chains prioritize scalability over full decentralization. But that’s not inherently bad.
For high-value transactions—like sovereign wealth or institutional holdings—Layer 1 remains ideal, despite higher costs.
For everyday interactions—low-value messages, social tokens, microtransactions—modular or weakly decentralized layers suffice, offering safety and transparency at scale.
“There are now multiple paths,” Shenyu explains. “The ecosystem is richer because of it.”
Managing Investor Psychology in a Bull Market
Even whales feel FOMO.
Shenyu admits: “Everyone has FOMO. It’s biological.” But in 2023’s bear market, he used the downtime to reflect, read, and analyze past mistakes. His biggest gain? Reduced emotional reactivity.
His strategy now:
- When excited by a new trend, wait 1–2 days before acting.
- Conduct a “thought experiment”: What’s the core value? Is it sustainable?
- Ask: Am I chasing sentiment money or cycle money?
He distinguishes between:
- Sentiment money: Short-term gains from hype (better suited for younger, agile investors).
- Cycle money: Long-term returns from structural trends (his preferred approach).
The Rise of the Post-2000 Investor
A new generation is reshaping crypto.
Born into digital life, post-2000 investors are native to online ecosystems. They’re more sensitive to social sentiment, faster at adopting new tools, and less bound by legacy ideologies.
“They don’t play our games anymore,” Shenyu observes. While older investors focus on cycles and fundamentals, younger ones thrive on virality and real-time data.
This doesn’t make one approach superior—just different. Each generation plays to its strengths.
Frequently Asked Questions
Q: Why might there be no altcoin season this bull run?
A: Capital is flowing into Bitcoin via ETFs rather than speculative altcoin markets. Miners are better hedged post-halving, reducing sell pressure. The investor base has matured, favoring stability over hype.
Q: Is Bitcoin becoming a platform for DeFi and NFTs?
A: While Bitcoin’s base layer remains conservative, Layer 2 solutions and sidechains are enabling DeFi-like applications and NFTs. This expansion reflects organic demand for yield and utility on Bitcoin.
Q: What is modular blockchain architecture?
A: It’s a design where blockchain functions (execution, settlement, data availability) are split across specialized layers. This improves scalability and lowers costs while maintaining security.
Q: How can investors avoid FOMO?
A: Practice delayed action—wait 1–2 days before investing. Focus on core value rather than hype. Align investments with long-term cycle trends instead of short-term sentiment.
Q: Are younger investors changing crypto markets?
A: Yes. Post-2000 investors are digital natives who react faster to sentiment and trends. They prioritize speed and experience over ideological purity, driving innovation in UX and social trading.
Q: Can decentralization be balanced with usability?
A: Yes. High-value use cases can stay on Layer 1 for maximum security. Low-value interactions can use modular or semi-decentralized layers. The ecosystem now supports both.