Trader Eugene Shares Insights on Long-Term Crypto Investing Amid Market Volatility

Trader Eugene, a well-known figure in the cryptocurrency community, has shared his investment philosophy, emphasizing the importance of considering three key elements when investing in utility and decentralized finance (DeFi) tokens for the long term. These elements are essential for investors to evaluate the sustainability and potential of their investments in the volatile crypto market.

Eugene's first point is the necessity for token holders to be the team's top priority. He believes that if equity holders enjoy benefits that token holders cannot obtain, it is not wise to invest in the token for its value. While token holders do not necessarily need to receive direct utility such as buybacks or dividends immediately, they must receive clear and consistent signals from the team that they are the ultimate beneficiaries.

Secondly, Eugene warns against business models that directly rely on the speculative nature of cryptocurrency, known as the "Ouroboros Cycle." This cycle can trap many so-called "fundamental investors" because, in a bear market, trading volume may drop significantly, making any valuation based on price-to-earnings (PE) or price-to-sales (PS) ratios meaningless. Additionally, annualizing revenue data based on just one month's "good" performance can be misleading.

Lastly, Eugene stresses the importance of trusting the management's execution ability. Like any company, investors need to conduct thorough due diligence to ensure that the team behind the protocol has the capability to realize its vision, beat competitors through technological barriers, or superior execution.

Eugene believes that only a few protocols meet these standards and that he will buy these tokens at the right time. For the remaining 99.9% of tokens, he classifies them as part of the "concentration camp," indicating that they do not meet the necessary criteria for long-term investment.

In summary, Trader Eugene's insights provide a clear framework for long-term investment in utility and DeFi tokens. By focusing on the priority of token holders, the sustainability of the business model, and the execution ability of the management team, investors can make more informed decisions and navigate the complexities of the crypto market more effectively. However, it is crucial to remember that investing in cryptocurrencies is inherently risky, and investors should always conduct their own research and exercise caution when making investment decisions.