Author: XinGPT
After returning from Hong Kong Consensus, I successively met some friends in the mainland, with familiar laughter still echoing in my ears. Old friends remain active, KOLs, Agencies, market makers, traders - people haven't dispersed, the market hasn't collapsed, the only thing that has changed is the "atmosphere" of this market.
This is neither a bull market nor a bear market. It's not governed by the greed or fear people are familiar with, but an indescribable "alienation" - an industry atmosphere that old veterans have never experienced, making one feel like in a different world.
In this era, crypto has only one business left: selling coins.
Three Pillars: Creation, Discovery, Circulation
Roughly speaking, crypto has always been driven by three wheels:
Value Creation - Bitcoin, Ethereum, stablecoins, Layer2, DePIN, AI Agents, etc., satisfy user needs through technological innovation, creating actual use value.
Value Discovery - VC investments, trading pricing, capturing potential assets, achieving price discovery through market mechanisms, and driving industry development.
Value Circulation - Market makers, Agencies, media, KOLs, etc., build coin sales channels, help projects reach retail investors, and complete the transfer from primary to secondary markets.
These three should have been meshing gears, complementing each other. But now, we see:
The first two are withering, while the third is thriving.
Projects no longer pursue users and products, VCs no longer study trends and tracks, and the entire market is left with only one voice shouting: "How do we sell coins?"
Coin Selling Economics and Resource Club
A reasonable and healthy market should have these three stages inseparably linked, with project parties doing well in products, meeting user needs, gaining profits and capital market premiums; primary and secondary institutions providing capital allocation for project parties, intervening during low periods and exiting profitably during peaks; while circulation channels laid by distributors also provide higher capital efficiency for the capital market.
However, current crypto discussions no longer involve project parties and VCs discussing which areas still have innovation opportunities, what products can be made, or what needs can be met. Even in the widely disproven 2024 second half, AI Agent's local industry heat could still inspire entrepreneurs' passion.
Secondary institutions are generally lying flat, with Altcoins peaking upon listing, meme coin liquidity almost dried up, and BSC's sustainability still lacking.
Under such market conditions, the only active institutions are the third type: MM market makers, Agencies, and intermediaries, discussing topics like how to generate good data or secure listings on major exchanges, how Agencies can promote and pull buying orders, and how active market makers can collaborate with buying communities to dump more trading volume.
Market participants are extremely homogeneous, all trying to extract the increasingly scarce existing funds in crypto.
As a result, top resource parties (top projects, major exchanges and their listing departments, resource-strong MMs and agencies) form an unbreakable community of interests. Crypto's blood flows from LP end to VC, from VC to top projects, with the other end seeping through retail investors' capillary secondary market, feeding these parasitic interest groups, growing larger and larger.
Entrepreneurs' Disappearance
After FTX's bankruptcy in 2022, crypto experienced a dark moment, with Bitcoin falling to 18,000, and Altcoins going silent.
But unlike now, a large amount of funds were deposited in VCs and secondary funds/large accounts, which had regenerative capabilities. VCs would invest in startup projects, and entrepreneurs could produce positive externalities, create value, and attract funds.
Now, most funds are being vampirized by intermediate links. Project parties only seek to profit from listings, becoming intermediaries for VCs and secondary markets, not needing to create value, just building "empty shell" stories. From traditional business logic, if downstream distribution channels consume most costs, upstream R&D and operational expenses must be cut.
Project parties simply abandon product development, using all funds to navigate promotion and listing channels. Anyway, many can list without products or users, and promotions can now be packaged as "meme" driven. The less spent on products and technology, the more funds can be used for listings and price manipulation.
Crypto's innovation path has become:
"Tell a good story → Quick packaging → Find connections for listing → Cash out and run."
Product? Users? Value? That's just romantics' self-satisfaction.
Skimming is Destiny
On the surface, project parties spending money on listings and price manipulation seems beneficial to everyone - funds get exit, secondary retail investors have trading space, and intermediaries skim profits abundantly.
But long-term, the loss of positive externalities means only intermediaries grow larger, forming monopolies and increasing skimming proportions.
Upstream project parties reduce R&D costs, and the squeeze of regulatory pressure and skimming create severely asymmetric risk-reward ratios, forcing them to exit. Downstream retail investors' PvP becomes increasingly severe, with "always being the bag holder," and after losing profit potential, masses exit.
Essentially, whether exchanges, market makers, Agencies, or communities, intermediaries are service providers who don't directly create value or positive externalities. When service providers and skimmers become the market's largest interest group, the market becomes like a cancer patient with a tumor, where cancer cells grow fatter while the host's nutrients are drained, eventually withering away.
Cycle's Power and Post-Disaster Reconstruction
Crypto is ultimately a cyclical market.
Optimists believe that after this liquidity drought, a true "value spring" will eventually emerge. Technological innovations, new use scenarios, and new business models will reignite innovation passion. Innovation never dies, and bubbles will eventually burst. If there's a glimmer, let it be a beacon.
Pessimists believe the bubble hasn't fully burst, and crypto must undergo a deeper "avalanche reshuffle". Only when skimmers have no coins to skim and the market structure dominated by intermediaries collapses can true reconstruction begin.
Between these, practitioners must traverse a chaotic, muddy stage: questioning, internal consumption, weariness, and life doubts.
But this is the market's essence - cycles are destiny, and bubbles are just a prelude.
The future may be bright, but the tunnel leading to brightness will be very long.
