The NISHI Talk: Crypto Conversations “The Changing Crypto Landscape, and the Unchanging Strategies of Traders” Kasou NISHI × European

Summary

1. The “easy profit” era is over as the market matures, requiring more sophisticated strategies

The days when simply holding long positions could generate profits are over. Today, traders must adapt to changing market conditions with more advanced strategies. In particular, the rise of Digital Asset Treasury (DAT) companies has been seen as a sign of market overheating and a signal of potential market peaks.

2. Trading strategies are evolving around DEXs, bots, and TGE opportunities

As restrictions on centralized exchanges increase, arbitrage trading using perpetual DEXs and algorithmic trading bots has become more prevalent. Additionally, strategies focused on earning points tied to Token Generation Events (TGEs) are gaining importance, emphasizing mid- to long-term rewards rather than short-term gains.

3. Despite regulatory pressure and institutional entry, new “ways to compete” continue to emerge

While increased regulation and the entry of traditional financial institutions are reducing the market’s former level of freedom, DEXs are gaining attention as a way to reclaim the original ethos of crypto. Even as the environment changes, new sources of competitive edge will continue to emerge, and traders must constantly adapt to discover them.

This project features virtual NISHI, a crypto analyst, engaging in candid discussions about recent trends in the cryptocurrency industry with individuals he feels are "important to interview right now." This time, he speaks with "European," an engineer and trader with long experience in cryptocurrencies, about trading strategies during price declines and the ever-changing landscape of crypto, past and present.

Kasou NISHI: European, you're an engineer and cryptocurrency trader, trading daily. Given the recent market conditions, have your trading strategies changed at all?

European: There's no longer a bullish, go-getter mood, so I feel the phase where you could simply make money by creating long positions without thinking is over. I believe we need to adapt to this change.

However, these signs were already emerging. A typical example of this is the so-called DAT (Digital Asset Treasury) companies.

Looking back, when a bubble is nearing its final stage, a "last player," so to speak, emerges. Investment funds that, in hindsight, seem irrational—money that makes you wonder, "Why was all that money flowing in?"—enter the market. As a result, those who engage in such less-than-smart investments often suffer the greatest losses in the end.

The funding source for DAT strategies is other people's money, such as shareholders' money, making it susceptible to moral hazard. It's like accumulating Bitcoin through leverage. I felt this was clearly a bad sign, and consequently, Bitcoin's price plummeted after reaching its peak in October of last year.

Therefore, with each increase in DAT companies, I felt the market was nearing its peak, and recently I've been reducing my enthusiasm for taking positions.

Kasou NISHI: I feel the current market conditions are similar to the atmosphere of the market from 2017 to 2018. In 2018, the market remained flat from spring onwards, then plummeted at the end of the year. If we follow this historical pattern, a scenario where "DAT companies fail and a major crash occurs at the end of the year" seems plausible.

European: But if that happens, in a sense, it would be a "cleanse." Even after DAT companies and funds sell off, leaving a scorched earth, new sprouts will emerge. Crypto has always followed that kind of cycle.

Kasou NISHI: By the way, the crypto market experiences major downturns every few years. How do you feel psychologically during those times?

European: Honestly, I feel “nothing” (laughs). I’ve been through it so many times. In fact, I think the impact used to feel stronger in the past. It wasn’t unusual to see a 50% drop in a single day. There were also times when exchanges got hacked and prices fell 30% within just two hours. It’s like how people say Japanese people are used to earthquakes—so even a drop of around 10% doesn’t really faze me anymore.