Original Author: XinGPT? (X: @xingpt）
After returning from Hong Kong Consensus, I successively met some friends in China, 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 a kind of 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, Layer 2, DePIN, AI Agents, etc., creating actual use value by meeting user needs through technological innovation.
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., building coin sales channels, helping projects reach retail investors, and completing transfers from primary to secondary markets.
These three should have been interlocking gears in a symbiotic market ecosystem. 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 developing good 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 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 with partial industry heat like AI Agents in the second half of 2024, which could inspire entrepreneurs' passion, it's generally being disproven by VC coins.
Secondary institutions are generally lying flat, Altcoins peak immediately upon listing, MEME coin liquidity is almost dried up, and BSC's sustainability is still lacking.
In this market, only the third type of active institutions remain - MM market makers, Agencies, and intermediaries, discussing topics like how to generate good data, get listed 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 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 with each rise.
Entrepreneurs' Disappearance
After FTX's bankruptcy in 2022, crypto went through its darkest 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 entrepreneurial projects, and entrepreneurs could create positive externalities, generate value, and attract capital.
Now, most funds are being vampirized by intermediate links. Project parties only seek to profit from listing, becoming intermediaries for VCs and secondary markets, not creating value but 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 processes. After all, many projects list without products, and now promotions can be packaged as "meme" driven. The less spent on products and technology, the more funds can be used for listing and price manipulation.
Crypto's innovation path has become:
"Tell a good story → Quick packaging → Find connections to list → Cash out and run."
Product? Users? Value? That's just romantics' self-satisfaction.
Pumping is Destiny
On the surface, project parties spending money on listing and price manipulation seems beneficial to everyone - funds get exit, secondary retail investors have trading space, and intermediaries profit abundantly.
But long-term, the loss of positive externalities means only intermediaries grow larger, forming monopolies and increasing pumping percentages.
Upstream project parties reduce R&D costs, and regulatory pressure and pumping create severely asymmetric risk-reward ratios, forcing them to exit. Downstream retail investors' PvP becomes increasingly severe, with "always being the bag holder" leading to mass exit after losing profit potential.
Essentially, whether exchanges, MMs, Agencies, or communities, intermediaries are service providers who don't directly create value or positive externalities. When service providers and pumpers become the market's largest interest group, the market becomes like a cancer patient with a tumor, ultimately ending with cancer cells growing fat and the host withering after nutrients are drained.
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 pumpers have no coins to extract and the intermediary-dominated market structure 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 might be bright, but the tunnel leading to brightness will be very long.
