Sober thoughts in the post-bull market era: How will various sectors of the crypto industry develop amid the market resh

Original author: Joel John

Original translation: Yangz, Techub News

Translators note: Against the backdrop of Trumps vacillating tariff policy and turbulent global trade situation, the criptocurrency market is experiencing a significant cooling. The author of this article analyzes the structural changes in the current cryptocurrency market from 16 dimensions. In this special period of dual effects of macroeconomic policies and market mechanisms, the cryptocurrency industry may usher in a profound value reconstruction – this is not only a cruel reshuffle process, but also a necessary path for the industry to mature.

These are some of my general thoughts on the current state of the cryptocurrency market, or how I think cryptocurrencies will develop.

1. Cryptocurrency is, at its core, a monetary track in its current form. Blockchain is to currencies/assets what the Internet is to information, and as a result, speculation remains the industry’s primary use case.

While the pace and scale of speculative activity will fluctuate, the most significant results (and the largest source of revenue) in this space will continue to come from speculation and the secondary use cases that derive from it, such as lending, derivatives, broker-dealers, etc.

2. With Circle submitting an initial public offering (IPO) application, the stablecoin track may reach its peak. In my opinion, the interest rate cut will be another domino that affects this field. Considering the dual pressures of channel moat and regulatory challenges, the next major opportunity for stablecoins may not be so hot. (Recommended reading: Techub Financial Report Interpretation: Circle sprints for IPO, but revenue growth cannot hide the profit dilemma)

Especially for founders not from Silicon Valley, the real marginal opportunity lies in regional fintech applications that can leverage crypto payment rails, rather than “exporting” dollars. Of course, if you can raise more than $10 million in funding from the beginning and are headquartered in the United States, the situation is different.

3. The DePIN track should be hot in theory, but considering the service level agreement (SLA) and the scale required for large-scale AI projects, the real investment opportunities will be concentrated in those networks that can generate demand-side revenue of about $100 million or more. Such networks will almost (always) work with private equity funds or hedge funds to meet short-term capital liquidity needs. So far, I have not seen any token-based network that can scale to this extent (and maintain reliable operation).

The good news is that networks that can scale to this size do exist. The bad news is that most of the revenue generated by these networks will not touch the token system.

4. The reason why we started to pay attention to the relationship between tokens and revenue is due to two fundamental changes. First, in the post-pump.fun world, the valuation premium enjoyed by tokens has disappeared. When assets are vested, it becomes extremely difficult to maintain a fully diluted valuation (FDV) of more than $100 million; second, the volatility of todays stock and foreign exchange markets is no less than that of cryptocurrencies, and the trends are clearer, causing marginal buying in the cryptocurrency market to completely dry up.

The fundamental reason why project parties really need to worry about revenue is that for liquidity funds (the last marginal buyer), there are only about 50 tokens that can generate revenue that are worth allocating, and there may be less than 30 of them with actual growth potential.

5. VCs have a strong incentive to insist that tokens as a business model are not dead yet and tout that Web3 is coming. If you choose to ignore industry trends, you can continue to be deaf and dumb for a while.

In my opinion, we are entering a phase where there will be fewer founders issuing tokens, and they will hold the proceeds as small teams. Crypto VCs may not be able to cope well with this shift, as their liquidity has traditionally come from exchange listings and retail investors buying orders. Some may blame the macro environment for the decline in crypto VC deployment, but the real reason is that in the years after FTX, the ability of portfolios to provide returns has been greatly weakened as the market has changed.

6. In my opinion, there are less than 10 crypto funds that can write checks and build Uber/Cisco-level achievements. And there are probably less than 30 partners who really understand how to achieve such achievements. People always think that the lack of large-scale consumer applications in the crypto space is due to problems such as poor user experience or poor marketing. In my opinion, part of the core challenge is that the nature of current capital is bound by a 3-year return cycle and is overly obsessed with liquidity brought by token listing. This has become the opium of crypto venture capital. Perhaps, in this environment, there is an opportunity to build large-scale consumer applications with a longer-term perspective.

7. Crypto x AI seems to be hot, but it is hard to keep up with the pace of AI itself. This may be the first area where the Emperors New Clothes phenomenon in our industry is exposed. Concepts such as data traceability and distributed computing resource allocation are attractive in theory, but their scalability potential remains to be verified. Most networks that have achieved scale rely on distributed data centers, which still settle revenue in US dollars.

AI models do not show a premium advantage because of the data source getting compensation. The real potential, or the same as the P2E model, is the crowdsourcing IP address field. I think this market segment is worth paying attention to.

8. There is an opportunity in the crypto space to build a native digital bank for the middle and high income groups. Think of it like payroll management + money transfers + portfolio construction (stocks/treasuries) to lending, all for crypto native users. This user group is those who make between 5k-200k a month in crypto and want a bank that can handle all of this. While the potential market size (TAM) of such a bank is between 5k-10k people, in my opinion, there is unique value in building such a platform.

9. Farcaster may bring DAOs back to life. Many DAOs have fallen because it turns out that people simply don’t want to participate in the governance of lending or derivatives platforms. If the community on Farcaster can grow to tens of thousands of people, and these communities can coordinate resources (such as community assets) on-chain, then DAOs will become important again.

I hope this will be the way Memecoins come back. If done right, this type of asset could be more sustainable than Dogecoin/Catcoin. The core challenge for Farcaster is how to balance the needs of content creators with the financialization of the platform. Without financialization, it could become just another ordinary protocol; if it can be successfully financialized, it will become the prototype of the next generation of the Internet.

10. The current blockchain games give people a feeling of lifelessness, but from the perspective of return on investment, it is the market segment with the highest return on investment in consumer applications. Teams that are still working in this field today need some kind of crazy qualities, and those who are truly capable builders are likely to create a sustainable game market with millions of users. People always think that this track will die in 2022 (after Axie), but if you count the 1-year cooling-off period after the frenzy period and the product development cycle of more than 2 years, 2025/2026 is likely to be the first year of the explosion of cryptocurrency games.

11. It will be difficult for long-tail altcoins to make a comeback. This is different from 2018 and 2023, when there was a lack of retail investors to take over. Now retail investors are still active in the market, but they are no longer chasing the 50th homogeneous token.

In my opinion, this will change the investment logic of the crypto industry. In the past, the bet was Can this token be listed on the exchange?, but now it has become Is this token important? These are two completely different questions, and few people can find the answer.

12. The cryptocurrency industry will lose talent faster than liquidity will dry up. Specifically, seeing people switch to AI or seek other opportunities due to slow progress in the cryptocurrency field will be a far greater blow to morale than falling prices. Unlike 2018 and 2023, the current macro environment portends more prolonged pain, while the field of AI continues to achieve exponential progress.

In such a market, certain companies will evolve to become beacons of hope. Corporate culture will eventually become a moat. However, there are only a few founders who can foresee this transformation.

13. Research and media organizations in the cryptocurrency field are going through a period of consolidation. Ordinary creators have become disillusioned with the industry because the main financiers have always been L2 project parties, and now working with them has become a torment. In the next 18 months, the only way for creators to survive is through super financialization. In other words, they must obtain a sufficiently generous profit margin to have the luxury of investing time in polishing high-quality content.

Companies that can combine creation (writing/research), financialization (asset/deal structure design) and moat (distribution channels/processes) will make a lot of money. But teams with this gene are extremely scarce.

14. If there are fewer founders who can issue coins, and more founders who can achieve million-level user growth, then the next pool of capital to be released in the cryptocurrency field will be private equity. Although it is not yet a large-scale, as long as the annual revenue of enterprises exceeds 10 million US dollars, private equity institutions are likely to become the dominant force in the next 18 months. The total number of enterprises that meet this condition is about 50, of which perhaps 20 are privately held. Therefore, for now, this is still a small market.

15. I think it would be possible to set up a fund of about $10 million to invest in projects that combine creative content (music/art/writing) with crypto primitives and distribute them at scale. But this requires partners to have aesthetic taste, understand the distribution of consumers, and resonate with creators. This is one of the things that I am particularly interested in.

16. The cryptocurrency industry has both moral decay and idealism in how it shapes the world. Compared to 2018, the industry has achieved a hundred times the product market fit (PMF), but can only get a small part of the premium it once received. In this market, it has become an art to block out the words of academics and focus on data signals. It can even be called a survival skill. Please remember: you are shaping the world you live in, and you are shaped by the world you live in. Subjective initiative itself is a moat.

Enlace original

This article is sourced from the internet: Sober thoughts in the post-bull market era: How will various sectors of the crypto industry develop amid the market reshuffle?

Related: One-week token unlocking: VENOM has initially started unlocking, and the tokens released this week account for 2.9% of t

This week, a total of 6 projects unlocked tokens, among which VENOM unlocked a relatively high ratio of 2.9% of the circulation, but the amount was relatively small at 6.94 million US dollars. In addition, MOCA unlocked 2.3% of the circulation. Venom Project Twitter: https://twitter.com/VenomFoundation Project website: https://venom.network/ Number of unlocked tokens this time: 59.32 million Amount unlocked this time: Approximately 6.94 million US dollars Venom is a Turing-complete proof-of-stake blockchain that uses a Byzantine Fault Tolerant consensus algorithm for block validation and creation as well as network security, using dynamic sharding to increase its transaction throughput and network capacity. VENOM has initially started to unlock, and the current circulation is 28%. The unlocking targets are 17.94 million coins (US$2.1 million) for the ecosystem, 15.84 coins (US$1.86 million) for the…