0xSun: Has gone long on ETH and shorted a basket of alts for hedging, believing that institutional funds buying ETH will not spill over into other alts.

According to BlockBeats news, on August 1, Smart Money and crypto KOL 0xsun.sol (@0xSunNFT) posted on social media stating that there is currently a severe divergence in the market. Personally, I have opened a hedging transaction (going long on ETH & shorting a basket of alts) with a position of approximately 1:1. The logic behind going long on ETH is that ETH has been the main driving force behind this round of rise at the end of June. Institutions are emulating MicroStrategy by using equity financing to purchase ETH. Additionally, in the narrative of stablecoins, ETH is also a core infrastructure and settlement layer. Referring to MicroStrategy's previous purchase of BTC that drove the price up significantly, the rise of most alts is far less than that of Bitcoin. The funds used by equity and institutions to buy ETH are also unlikely to spill over to other alts. According to CMC data, in the past 30 days, only 20 of the top 200 tokens have risen more than ETH, including BONK, ZORA, CFX, ENA, which are clearly driven by favorable events. Alts follow the previous shorting logic, prioritizing those with higher market capitalization, non-leading, weak performance, and low presence, and diversifying short positions while setting stop loss to prevent a single target from surging. 0xsun added that if the market continues to be bullish in the second half of the year, it is very likely to be driven by ETH. If the market enters a bear phase, I don't believe that alts can thrive independently, while ETH at least has institutional buying power to support it. The scenarios that would lead to the failure of this hedging idea are either that the alt season has truly arrived, with most alts consistently outperforming ETH, or that ETH is volatile or leading to a decline, while other alts do not drop significantly. Based on the experience of these past few months, I personally think the likelihood is low.