Liquid Founder Jack Yi: Holding Coins is Most Profitable
Liquid Capital founder Jack Yi (易理华) summarized his observations from over ten years in the cryptocurrency industry since late 2015 in a post on platform X. He stated that true wealth accumulation in the industry is concentrated among a few specific paths rather than evenly distributed across all participation methods.
The first category is the "coin hoarders" who long-term accumulate mainstream assets like Bitcoin, Ethereum, and BNB. This includes direct mining, long-term holding, and participating in mining pool operations. Jack Yi defines the profit logic of this model as "time compounding returns," meaning that profits mainly come from long-term holding across cycles rather than active trading decisions.
The second category consists of participants engaged in trading infrastructure-related businesses, including quantitative arbitrage teams, exchange operators, and stablecoin issuers. Their profit model is based on providing liquidity, matching, or settlement services at the infrastructure level, rather than directly bearing directional risks from asset price fluctuations.
The third category includes participants involved in project issuance and market making (MM). Jack Yi classifies them as "asset issuers and controllers," profiting by issuing token projects or controlling specific assets through market making. The core of this model is direct control over asset supply and liquidity.
In contrast to these three categories, participants who solely engage in spot investment and contract trading are described by Jack Yi as having "more failures than successes." He likens their operational model to that of "hunters"—they must actively strike every day to yield results, representing a high-risk, low to medium compounding return model, lacking the time compounding or structural advantages of the first three categories.
From the perspective of industry capital structure, Jack Yi's summary reveals the underlying logic of wealth distribution in the cryptocurrency industry—most of the capital that profits across cycles comes from participants who have structural control over the asset supply side (mining, issuance, market making) or trading infrastructure (exchanges, stablecoins). Ordinary investors relying solely on directional judgments for spot or contract trading are always at a disadvantage in terms of information and capital, reflecting the ongoing transfer of wealth from "hunter-type" participants to "structural-type" participants in the industry.
Source: Public Information
ABAB AI Insight
The "time compounding" path described by Jack Yi is exemplified by early Bitcoin miners and long-term holders who accumulated wealth through multiple bull and bear cycles in 2013, 2017, and 2021. For instance, MicroStrategy's continuous Bitcoin accumulation since 2020 and Michael Saylor's public definition of it as a "digital gold" long-term holding strategy is essentially an amplified version of this logic at the corporate level.
The "trading infra" capital path occupies certain fee-generating segments within market structure—exchanges profit from transaction fees and listing fees, stablecoin issuers (like Tether issuing USDT) profit from reserve asset interest income, and quantitative arbitrage teams profit by capturing market price differences. These entities share the characteristic that their revenue sources do not solely depend on asset price fluctuations but rather on trading volume and market activity, which is why exchanges often navigate bull and bear cycles more stably than traders.
The "asset issuers and controllers" players' path is highly similar to the roles of primary market issuers and market makers in traditional financial markets. For example, some project teams influence prices by controlling the token unlocking pace and secondary market liquidity, akin to how major shareholders and underwriters control new stock pricing in traditional equity markets. These players currently hold a dual advantage of information and resources in the cryptocurrency industry, positioning them at the relatively top of the industry food chain.
This essentially represents capital concentration—after ten years of development, wealth in the cryptocurrency industry has not been evenly distributed among all market participants but has continuously concentrated among a few structural players occupying the supply side (mining, issuance), infrastructure side (exchanges, stablecoins), and liquidity control side (market makers). The core mechanism is that these roles inherently possess advantages of information asymmetry and asymmetric returns, while purely directional traders, lacking structural moats, will inevitably be net outflows in this wealth redistribution over the long term.
ABAB News · Law of Cognition
- Holding coins is an easy win, trading is life-threatening.
- Whoever controls supply and liquidity will navigate cycles.
- Hunters will never eat better than farmers.