BTC is back at 94,000, but the spring for Tier 1 investors is not coming back

 

Written by: TechFlow

 

On April 23, the news reignited sentiment with Trump's announcement of a reduction in tariffs on China.

 

Investor confidence in risky assets quickly recovered, with BTC quietly rising 7% and back to $94,000.

 

Everything, it seems, came back one night.

 

BTC is one step closer to breaking its all-time high of $100,000 at the beginning of the year, Twitter is full of anticipation of a new bull market, and traders in the secondary market are busy chasing the ups and downs, and the market seems to be back to the frenzied spring of 2021.

 

However, this return of emotions does not belong to everyone.

 

It is they who are hilarious, and the first-tier investors may be silent in the face of signs of bullish returns.

 

The bull died in the lock-up

 

The good news of BTC's return to $94,000 has secondary market investors cheering, but for primary market investors, the carnival feels like a distant dream.

 

Most of their tokens are locked and cannot be traded freely, and the market performance over the past year has cost them a lot.

 

A chart from STIX (@stix_co) reveals this harsh reality.

@stix_co is a platform focused on OTC (over-the-counter) trading of cryptocurrencies, providing liquidity support for locked tokens.

 

The chart above compares the valuation changes of multiple tokens in May 2024 and April 2025: May 2024 is the valuation of these tokens at the time of OTC trading (i.e., the price at which primary investors can sell them at the time of lock-up), while April 2025 is the actual valuation of these tokens on the open market (i.e., the current market price).

 

The results show that, on average, the valuation of these tokens has fallen by 50% in a year.

 

Let's look at a few specific examples.

 

BLAST's OTC valuation last year was $250 million, and now the market valuation is only $30 million, down 88%; EIGEN fell 75% from $600 million to $150 million; The SCR was even worse, falling by 85% from $170 million to $25.5 million.

 

Almost all tokens fell sharply, with the exception of JTO, which rose 75% from $100 million to $175 million.

 

But this is only a special case, and it does not cover up the overall bleak situation.

 

To put it simply, if the tokens in the hands of these first-tier investors had not been sold through OTC transactions last year, the average value of their holdings would have been cut in half, and some would have only been left with one or two percent.

 

For a bit of background, OTC trading means that before the token is unlocked, primary investors can sell it in advance through private transactions, usually at a discount.

 

Taran mentioned in the post above that when these tokens were traded over-the-counter last year, the price was about 89% off their valuation.

 

That is, if they sold last year, they may only lose 10%-20%, or maybe not at all. However, there are also investors who choose to hold for a year and wait for it to be unlocked, only to see the value of the token drop by an average of 50%, or even by seven or eight percent, and their wealth has shrunk significantly.

 

You might say that their investment cost is low, and even if it falls so much, they still have to make money.

 

But the problem is that there's something called opportunity cost in economics. As an investor, what is more uncomfortable than making less (and maybe even losing) is the loss of theoretical opportunity cost.

 

In the theoretical best-case scenario, Bitcoin (BTC) has risen by 45% over the past 12 months.

 

If a Tier 1 investor had sold their tokens last year and swapped them for BTC, their money might have risen 1.45 times by now.

 

But right now, their tokens are only 0.5 times worth and may even have to be sold at a 5% discount after unlocking them in the future, and may end up being worth only 0.25 times.

 

In other words, their actual loss is as high as 82.8% compared to BTC's gains; Even in dollar terms, it's a 75% loss.

 

It's like watching others make a lot of money, while your own assets are shrinking smaller and smaller.

 

"Bull back", for them, may have died in lock-up.

 

Lock-up for a year and losing half of the money, the most infuriating thing about this thing is:

 

Researching, comparing, identifying, and investing in projects, after putting in the effort, it is better to hold BTC directly.

 

In the classic investment book "Walking Wall Street", there is a famous "orangutan dart throwing theory".

 

Author Burton Malquil suggests that if an orangutan is blindfolded and throws a dart and picks a portfolio of stocks, the long-term returns may be no worse than the careful selection of professional investors.

 

This theory was originally intended to satirize the ineffectiveness of over-analysis in the stock market, but now it is particularly ironic in the context of the cryptocurrency market.

 

Tier 1 investors spend a lot of time and energy researching white papers, analyzing project prospects, and even locking up positions for a year to win high returns, but the result may be: it is better to throw a dart at Bitcoin.

 

BTC has risen 45% over the past year, while their staked tokens have fallen by an average of 50% or more.

 

The valuation and investment logic of the entire altcoin may need to be reshaped urgently.

 

Spring does not return

 

The next wave of crypto altcoins is still locked up like this?

 

VC entered the market at a low price, and the lock-up mechanism was originally intended to protect the early stage of the project from a large number of early investors from selling off and causing the price to collapse. But judging from the data of the past year, this mechanism also puts a huge risk on primary investors.

 

As mentioned in the original post of the chart above, more than $40 billion of locked tokens will be unlocked in the future, which means that the market may face more selling pressure. If the new token continues to be locked at a high valuation, investors may once again fall into a vicious cycle of "lock-up for a year and losing half of it".

 

Obviously, the way of locking is no longer suitable for the current market environment.

 

Will Tier 1 investment in the crypto market still be hot? Can the spring of primary investment come back? As things stand, the answer may not be promising.

 

Over the past few years, high valuations of altcoins have tended to be based on market frenzy and liquidity premiums, but as the market matures, investors are starting to pay more attention to the actual value and liquidity of the project.

 

The high risk of locking tokens is prohibitive for Tier 1 investors, and more and more people are likely to choose more transparent and liquid projects.

 

Some emerging trends are already emerging: shorter lock-up periods, lower valuation multiples, and even direct meme-making to reduce the bubble of primary investment;

 

Of course, it is also possible that it is still old wine in new bottles, and under the fairer appearance of Meme coins, the first-level logic still exists, and the game is made on the plate, so that you can't see that there is a first-level existence.

 

For the crypto market as a whole, more transparent mechanisms have also become particularly important. The lock-up mechanism also needs to find a better balance to protect the early stage of the project without making investors take too much risk.

 

But the question is, the first level is not lost, the second level is not lost, and the leeks are not lost, so who will lose?

 

Crypto tokens don't produce value, they transfer it; If someone earns, someone must lose.

 

The spring of one wave of people is bound to be the cold winter of another wave of people.

 

This article is sourced from Foresight News:

https://foresightnews.pro/article/detail/83082

Respectfully submitted by the AIC Team

April30, 2025