What happened in the encryption market and what will happen

In the past week, many fren have been calling me to inquire about the market situation. I feel it is necessary to share my thoughts and disclose my views on the current market situation -

【What happened to change】

【Future Process】

For a long time, my family and friends who pay attention to me know that I am a long-term investor. So, starting from 2019, I have an annual strategy update, and 2024-2025 is probably this one, for discussion with family and friends.

1. DeepSeek burst the bubble.

Once DeepSeek is out, no matter if it really trained such AI with 5 million USD, the narrative is: [Algorithm Improvement] has at least temporarily defeated [Computing Power Improvement].

Don’t get hung up on whether this thing is true or not - since the market unanimously recognizes the 5 million, you should treat it as true.

As we approach the end of the 24th year in the encryption industry, apart from meme, I am unwilling to admit but objectively there is indeed only one narrative left: AI Agent, which can be said to be the hope of the whole village.

However, no one expected that the AI Agent would be mercilessly defeated by the real AI player DeepSeek in the next-door genuine AI track.

In the DS team, everyone is a true IQ200, graduates from Tsinghua University and Olympic medal winners are everywhere.

On the other hand, in our industry, we admire the idle second-line programmers who work from home, and the AI engineers from big companies who have been laid off or engaged in side businesses. So sometimes, we are forced to have an IQ of 50.

So…

January