For the first of many publications to be published on Red Pill, a swift yet detailed introduction on the cryptocurrency market’s composition. While a retail beginner looks to participate in the “crypto mania”, it isn’t as simple as buying the first cryptocurrency you see in the gainer’s list on an exchange. To understand crypto and how the game is played, you must first understand the technology, societal contributions, and culture of each crypto asset and digital asset baskets.
Bitcoin
The father of digital assets and cryptocurrency, Bitcoin is the progenitor of a multi-trillion-dollar industry that is set to flip gold as the most valuable asset in the world. Launched in 2009 by an anonymous developer with the pseudonym “Satoshi Nakamoto,” its goal is to develop a trustless, permissionless, and decentralized peer-to-peer system that does not need a third-party financial institution for transactions.
History:
- 1983: David Chaum proposed eCash, an anonymous electronic money concept.
- 1989: Launched Digicash, which didn’t gain widespread adoption.
- 2008: Satoshi Nakamoto published the Bitcoin whitepaper.
- 2009: Bitcoin was launched, introducing decentralized digital currency.
- Oct 2021: SEC approved ProShares Bitcoin Strategy ETF (BITO), the first Bitcoin futures ETF in the U.S.
- Jan 2024: SEC approved 11 spot Bitcoin ETFs.
Function: Being the first crypto asset, Bitcoin was initially meant to be a currency for peer-to-peer transactions. As its value grew over time, it became a store of value due to its strict supply of 21 million that can’t be minted further. Additionally, since Bitcoin has grown from being a currency for peer-to-peer transactions, Bitcoin Cash ($BCH) became the alternative. However, like any other asset, people may transact using Bitcoin to this day.
Culture: If anything, Bitcoin is the genesis asset of cryptocurrency. While other cryptocurrencies are called “tokens”, Bitcoin is a valuable asset that does not face the same scrutiny, volatility, and criticism compared to other tokens. Despite the FUD (fear, uncertainty, doubt), Bitcoin will most likely be the only cryptocurrency that will never go extinct and will always be the top cryptocurrency by market capitalization of all time.
Bitcoin’s influence started to creep from tech evangelist, to retail, small businesses, and eventually reaching larger markets such as billionaires, private financial institutions, and even entire governments. With the recent approval of the Bitcoin ETFs in Jan 2024, Bitcoin has legitimized itself to the world as a robust and progressive asset class.
Before continuing onto the next section, I encourage everyone to take some time to read through Bitcoin’s simplified whitepaper: https://bitcoin.org/bitcoin.pdf
Majors
Major cryptocurrencies, also known as blue-chip cryptos, are your alternative tokens that lay the foundation of an ecosystem supported by their technology. These are usually layer-1 tokens that provide a way for builders to develop projects on their network, allowing consumers to interact with the ecosystem with a wide array of products. Prime examples of these majors are:
- Ethereum: Operating with the EVM using Solidity as their programming language, this network holds the largest amount of total value locked, likely attributed to its huge staking and decentralized finance ecosystem. They utilize proof-of-stake to validate transactions.
- Solana: The 2024-2025 bull run main character, Solana utilizes a unique consensus mechanism called Proof of History (PoH) combined with Proof of Stake (PoS) to achieve fast transaction processing and low fees. They are currently the chain with the highest revenue, likely due to their deep reach in crypto culture through memecoins and great user-experience products that are friendly to the average retailer.
Here are a few contenders for this spot, but not officially recognized by the entire crypto ecosystem:
- Layer-1: XRP; BNB; SUI; HYPE
- Memes: DOGE (Yes, it’s a Layer-1 Blockchain)
Participants of these ecosystems have majors as their “capital-preservation” token, usually compromising the largest slice in their portfolios. Once the values of these major tokens increase, a flow of liquidity occurs into smaller market cap tokens in their respective ecosystems as the majority of traders both speculate and increase their aversion to risk in order to chase higher gains.
The longevity of these major tokens stand the test of time and will usually remain relevant in the next bull markets until proven otherwise. This is because of their nature to have a particularly high market capitalization, as most of these major blue-chip tokens are in the top 10 cryptocurrencies.
Altcoins
Altcoins, or alternative coins, are simply crypto tokens that are NOT Bitcoin nor stablecoins. Yes, even blue-chip tokens such as Ethereum and Solana are considered altcoins. Altcoins are seen as a way to stack more Bitcoin by potentially expanding your portfolio at a pace that is greater than Bitcoin. Altcoins are segmented into different narratives and brackets.
Narratives such as: Layer-1; Layer-2; Decentralized Finance (DeFi); Artificial Intelligence (AI); Decentralized Physical Infrastructure (DePIN); Decentralized Science (DeSci); Real-World Assets (RWA); Centralized Exchange Tokens; GameFi; Memecoins; and many more.
These narratives have a basket of altcoins ranging from its own sub-major and microcap gems. Despite being in the same narratives, one must be weary in what bracket they belong to based on their market capitalization. In my opinion, these brackets are:
Large caps: These are your altcoins that are in the top 10 or 20 in terms of market capitalization. Most of these tokens are Layer-1 tokens tat ave a thriving ecosystem of their own. Stable, but does not have the same potential to increase your wealth tenfold compared to other tokens.
Mid caps: To me, altcoins that are between $2 billion and $500 million are mid cap tokens. These are tokens that are relevant and still have some adequate potential to compound your wealth. These also contain your sub-majors such as ow $ONDO is to the RWA sector and $FET is to the AI sector.
Small caps: Small caps are tokens that are easily prone to market manipulation with great potential to tenfold your wealth to the upside, or take you to -80%. These are your tokens below $300m, all the way to possibly $50m. The lower you go, the riskier it gets. While small cap tokens are generally composed by teams of builders who are building an early product, there is a different side to cryptocurrency where you can find the most 1000x gems, or get rugged…
Here are some useful tools to track the entire market:
- Blockchain scanners to track transactions and wallets: https://solscan.io | https://etherscan.io
- Crypto information dashboard: https://coinmarketcap.com | https://www.coingecko.com
- Trading tool: https://www.tradingview.com
The Trenches
The Wild West of cryptocurrency. Whether it is a gladiator arena or the infamous backrooms, this is not a place where newbies should be financially participating. The Trenches is a term dubbed by crypto twitter, the primary community of which cryptocurrency culture stems to, famous for its ability to turn people into overnight millionaires (or drunkards if they get rugged).
The Trenches is a place where any individual, regardless of IQ, is able to launch their own token using a simple launchpad such as Pumpfun. The tokens you meet in the Trenches can start from as low as $4k market cap and can easily go 10x in a few minutes. While this may sound lucrative, it can also go to zero in a single one-second candle.
Culture: It’s where the culture and community in crypto materializes through charts. Participants of the Trenches are filled with both hyper-gamblers, smart traders, and market makers. In the Trenches, good tech or revenue does not drive the price higher, but attention.
Narratives: Narratives in the trenches are frequent and short-lived, often called “metas”. World events, crypto culture, influencer marketing, and private cabals are the main drivers of volatility. A few examples of metas and their respective leaders are as follows:
- Cat coins: Popcat
- Zoo animals: Moodeng
- AI Agents: AI16Z
- Political leaders: TRUMP
- Celebrities: MOTHER
- Tiktok: Chillguy
… so on and so forth until the meta has been exhausted of its attention and saturated with low-quality derivative betas.
A few platforms where you can interact with trench tokens are:
- Launchpads: https://pump.fun/board | https://sunpump.meme
- Decentralized Exchanges: https://app.hyperliquid.xyz | https://app.uniswap.org | https://jup.ag
- Analytics: https://dexscreener.com/ | https://www.dextools.io | Bitget Seed | Binance Alpha
- Rug checkers: https://bubblemaps.io | https://rugcheck.xyz
Stablecoins
The safe-haven of cryptocurrency, stablecoins are meant to become the constant standard of comparison in every trading pair. Works exactly like normal currency, but crypto. Stablecoins are cryptocurrencies designed to have a stable value. They aim to stay steady as their price is usually tied to something stable like the US Dollar. There are different types of stablecoins, from which they are backed by:
- Fiat-Backed: Tether’s USDT; Circle’s USDC
- Crypto-Backed: Maker’s DAI; Athena Labs’ USDE
- Algorithmic: Tron’s USDD
While stablecoins are meant to be stable, they are still not totally risk-free as you may think. Previously in 2022, Terra Luna’s algorithmic stablecoin $UST had a massive depegging event that caused the collapse of Terra Luna. This massive wipe of liquidity caused massive losses and cause for heavy regulation in the cryptocurrency industry.
Final Words
Crypto is not just about technology or price charts; it is a cultural phenomenon, a rebellion against centralized systems, and a playground for dreamers and degens alike. Yet, for all its allure, it demands respect—knowledge of the tech, awareness of the risks, and an ear to the ground for the ever-shifting metas.
Whether you are here to preserve wealth, chase 1000x gains, or simply explore, the crypto market rewards those who learn its rhythms and respect its unpredictability. Dive in, but tread wisely—this is a revolution that does not wait for the unprepared.
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