Collins Capital: Crypto's future rise depends on the expansion of industry infrastructure

24-10-27 10:31

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Article source: Collins Capital

In the world of blockchain, from Satoshi Nakamoto's release of the Bitcoin white paper, to V God's ETH craze, to the later Defi, NFT, meme, L2 and even the current discussion of L3, so many stories are combined with the bull-bear conversion of each cycle, how many people have become rich overnight and how many people have failed. Zhuo Ye joined Collins Capital in 2020 and participated in Collins' many investments in the blockchain track. During this journey, he not only experienced the glory of the market, but also constantly adjusted strategies with the team in the trough to find a way forward. Standing in this time window with a promising future market, in every cycle, narrative cannot be separated from infrastructure-mining, which should be paid serious attention to again.

Bull market illusion: luck conceals the depth of cognition

Before 2017, the blockchain market was in a frenzy, and every new project claimed to be the next "miracle". With its keen industry insight, Ke Yin took the lead in investing in projects such as Binance and QTUM. In a volatile market, the success of these projects is not accidental. The focus and execution of teams such as Binance are the reasons why Ke Yin firmly supports them. As investments continue to expand to projects such as Bitget and Republic, Ke Yin has accumulated multiple benchmark cases. However, as primary investment gradually moves towards an oligopoly market, projects with real core competitiveness have become scarce. Although Ke Yin has also actively participated in international projects such as Jasmy and Klaytn, not all investments can meet expectations, and some overly optimistic investments have exposed risks after the market matures.

The hard power of mining: a "protracted war" to cross the cycle

Compared with traditional equity investment, mining is more like a "hard-core" infrastructure investment method in the blockchain field. Mining is not just a combination of equipment and electricity, its essence is the understanding of the underlying logic of blockchain. Ke Yin has been deeply deploying mining business since 2016, and has achieved a calm cycle crossing with its deep understanding of the industry. Founding partner Jianbo's previous background in SMIC gave him a deep insight into the technology and market of the chip industry. In 2018, he took the lead in investing in Sinovation to deploy Bitcoin mining chips, which allowed Cola-Yin to maintain its technological leadership in the mining field. Mining not only brings stable returns, but also becomes a "robust weapon" to cross the bull and bear markets.

The strategic perspective of mining: the winning magic weapon in the upstream of the industrial chain

Colla-Yin Capital clearly recognizes that the value of mining lies not only in the current returns, but also in its ability to cope with cyclical fluctuations. The long-term existence of Bitcoin has laid a solid demand for the mining industry. Cola-Yin continues to deploy mines around the world to adapt to changes in the energy landscape and reduce operating costs. Through such a global perspective, Cola-Yin ensures the low-cost advantage of the mines and calmly copes with the challenges of rising mining difficulty in the future. Cola-Yin always believes that future investment opportunities are not in projects that look glamorous on the surface, but in infrastructure that has upstream industrial resources and core competitiveness. This long-term layout is Cola-Yin Capital's unique strategy in the blockchain industry.

Bitcoin halving: New opportunities in industry differentiation

Under the effect of Bitcoin halving, mining companies have gradually divided into three camps, each adopting different coping strategies:

• North American listed mining companies rely on low-cost oil and gas resources. The high leverage in the past has caused some companies to fall into crisis in the bear market. Faced with market pressure, they began to explore areas such as Bitcoin's second-layer network and NFT to seek new growth points.

• Non-listed mining companies in South America, Central Asia and Africa continued to expand after the halving, using high-power mining machines to gain market share and pursue short-term cost advantages.

• State-supported mining companies use low-cost electricity resources to quickly seize production advantages and seek long-term strategic benefits.

Zhuo Ye of Collins Capital keenly observed that mining companies in South America and Africa have become the biggest beneficiaries of this halving cycle due to their relatively low costs. They use lower mining costs to rapidly expand and enhance their market position. For Ke Yin, these mining projects are undoubtedly the key roles in the next cycle. They are not only market participants, but also will play the role of "industry cornerstone" in the halving cycle, laying a solid foundation for Ke Yin's long-term development in the mining industry.

The expansion of any industry is inseparable from the development speed of infrastructure, and the blockchain industry has relied on solid basic support from being "sentenced to death" many times to today's booming development. Mining is not only an important part of maintaining the blockchain ecosystem, but also a key force to stabilize the market when there are differences in the market, laying the foundation for the long-term development of the industry. For this reason, the infrastructure of blockchain, including the expansion of computing facilities, the layout of mining resources, and the innovative investment in energy and technology, is one of the core driving forces for the market to move forward.

As the price of coins fluctuates and the market continues to seek new growth points, the blockchain industry no longer relies solely on short-term speculation for profit, but gradually returns to the accumulation of long-term value. At this stage, further strengthening of infrastructure is particularly important. Only by investing more resources in core infrastructure such as computing power, storage and network can the industry maintain steady development in technological innovation and market demand. The future rate of increase depends not only on the growth of a single project, but also on the resilience of the entire ecosystem, which is supported by a sound infrastructure.

Therefore, accelerating the infrastructure construction of the blockchain industry, from distributed computing power to the optimization of decentralized network resources, is a key prerequisite for the recovery and rise of the entire market. Only by making the foundation of the entire ecosystem more solid, the blockchain industry can hope to move to a higher level in future development, continue to attract more attention and investment from mainstream capital, and bring more profound innovation and change to the global financial, technological and governance fields.