Navigating the Crypto Waters: Embrace Caution as Altcoin Season Ends, Says Bitget CEO

In the ever-evolving world of cryptocurrencies, market trends come and go with dizzying speed. Recently, Gracy Chen, the CEO of Bitget, shared her insights on the current state of the crypto market, emphasizing cautious investment strategies as altcoin optimism wanes.

The Decline of Altcoin Season

Gracy Chen has observed a stark transition in the crypto landscape, declaring the end of the altcoin season. Her discussions with major market makers and top venture capital leaders reveal a market entering a complex transition. The downtrend in altcoins, coupled with the collapse of the Digital Asset Treasury (DAT) bubble, has pushed investors towards more defensive strategies.

Chen highlights a notable “black swan” event on October 11 that had a devastating effect on the altcoin segment, making the risk-reward ratio for retail investors particularly unappealing. She advises against clinging to the hope of a recovering altcoin season, noting that only specific projects with solid infrastructure—such as stablecoins, tokenized real-world assets (RWAs), and payment systems—show potential, though they often do not issue tokens.

The Crumbling DAT Bubble

The once-popular DAT model is now facing scrutiny, with liquidity and trust issues causing widespread concern. According to Chen, genuine buying interest in DATs is dwindling, with many transactions resembling token-for-equity swaps.

In her analysis, Chen tells a cautionary tale about the asymmetric effects of the DAT model. For project teams and token holders, it’s a means of capital raising and earning, but investors, whether in the private or public phases, are often left at a financial loss.

Adopting a Defensive Stance

In this uncertain environment, Chen offers key investment advice:

• For those holding no position: A 5–20% allocation in Bitcoin might be wise, given its low exchange rate against gold.
• For leveraged investors: It’s prudent to reduce leverage and shift to defensive positions immediately.
• For those with medium exposure: Practicing patience and awaiting the right opportunity could be beneficial.

Bitget is also mirroring this caution by expanding its asset allocation services, offering products like stablecoin-backed gold and U.S. stock token trading. Chen states, “Diversified asset allocation is key to long-term survival in such a market climate.”

Post-Black Swan Challenges

Following the October event, Chen noted a decrease in weekly trading volumes across major exchanges by 20–40%. Some market makers suffered financial hits, leading to forced deleveraging. This underscores the need for recovery and recalibration, with a renewed focus on risk management.

Despite the turbulence, Chen finds wisdom in a classic market aphorism: “Bull markets are born on pessimism, grow on skepticism.” She underscores that the current market is in a phase of skepticism, where investors should focus on liquidity and sustainability, embracing a long-term outlook to be ready for the next wave of opportunities.