KOL Analysis of ETH and alts Hedging Strategy, Optimistic about ETH's Future Performance

On August 1, Smart Money and crypto KOL posted on social media that there is currently a serious divergence in the market. Personally, I have opened a Hedging Transactions (go long ETH & shorting a basket of altcoins), with a Position of approximately 1:1.

The logic for going long on ETH is that ETH is the main driving force behind the recent surge at the end of June. Institutions are mimicking a certain company by using equity financing to purchase ETH. In the narrative of stablecoins, ETH is also a core infrastructure and settlement layer. Referring to the previous case where a certain company purchased BTC, leading to a continuous price increase, ultimately most altcoins did not rise as much as Bitcoin. The funds used by equity and institutions to buy ETH are also unlikely to spill over into other altcoins.

According to data platforms, in the past 30 days, only 20 tokens among the Top 200 have seen a price increase greater than ETH, including BONK, ZORA, CFX, and ENA, which are clearly driven by favorable events.

Altcoins follow the previous shorting logic, prioritizing those with a relatively high market cap, non-leading, weak movement, and low presence. Additionally, shorting should be diversified, with stop-losses set to prevent a single asset from surging.

The KOL added that if the market continues to be bullish in the second half of the year, it is highly likely that it will still be driven by ETH. If the market enters a bear phase, they do not believe that altcoins can stand alone, while ETH at least has institutional buying power to support its price. The situations that could render this hedging approach ineffective are either the arrival of an altcoin season where most altcoins continue to outperform ETH, or ETH experiencing fluctuations or leading the decline, while other altcoins do not drop much. Based on the experience of the past few months, I personally think the likelihood is low.