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, with the only change being 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, the crypto only has one business left: selling coins.
Three Pillars: Creation, Discovery, Circulation
Roughly speaking, the 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 transfers from primary to secondary markets.
These three should have been interlocking gears in a complementary 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 laid by distributors also provide higher capital efficiency for the capital market.
Currently, discussions in the crypto 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, VCs' coin investments are generally falsified.
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 revolving around how to generate good data, secure relationships with major trading platforms, 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 the crypto.
As a result, top resource parties (top projects, major trading platforms and their listing departments, resource-strong MMs and agencies) form an unbreakable community of interests. The 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 and larger.
Entrepreneurs' Disappearance
After FTX's bankruptcy in 2022, the crypto went through its darkest moment, with Bitcoin falling to 18,000, and Altcoins falling silent.
But different from 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 needing to create value, just fabricating "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 listing and promotion, knowing that listings are possible without products and users. Promotions can now be packaged as "meme" driven, with less spent on products and technology, allowing more funds for listing and price manipulation.
The crypto's innovation path has become:
"Tell a good story → Quick packaging → Secure listing relationships → Cash out and run."
Product? Users? Value? That's romantic self-satisfaction.
Skimming as Destiny
On the surface, project parties spend money on listing and price manipulation, benefiting 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, with regulatory pressure and skimming causing severely asymmetric risk-reward ratios, forcing them to exit. Downstream retail investors' PvP becomes increasingly severe, with "always being the bag holder" causing money-making effects to disappear and mass exits.
Essentially, whether trading platforms, MMs, 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, ultimately ending with cancer cells growing fatter while the host's nutrients are drained, leading to withering.
Cycle's Power and Post-Disaster Reconstruction
The crypto is ultimately a cyclical market.
Optimists believe that after this liquidity-dried low point, a true "value spring" will eventually emerge. Technological innovations, new use scenarios, and new business models will reignite innovation passion. Innovation never dies; bubbles will eventually burst. If there's a glimmer, let it be a beacon.
Pessimists believe the bubble hasn't fully burst, and the crypto must undergo a deeper "avalanche reshuffle". Only when skimmers have no coins to skim 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.
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