Author: Primitive Ventures
Translated by: Felix, PANews
Crypto Saturation and Structural Transformation
This market cycle has clearly shown that the market has reached saturation, both in terms of capital and attention.
Global Google Trends data illustrates this point. Only Solana's search popularity has reached a new high. Despite the ETF approval, Bitcoin reaching a new high, and political discussions triggered by meme coins, the search popularity of Bitcoin, Ethereum, and even Dogecoin has not recovered to the peak levels of 2021.
Red: Ethereum Google Search Popularity
Blue: Solana Google Search Popularity
Blue: Bitcoin Google Search Popularity
Red: Dogecoin Google Search Popularity
As attention declines, prices follow suit. Most major assets are still trading below the highs of the previous cycle. This means: Cryptocurrency as an asset has reached saturation in mainstream perception, but as a currency, it is still not widely adopted.
This duality defines the current situation. Speculative behavior is well-known, but its actual use is still misunderstood. The next marginal buyer may not come for trading, but for infrastructure.
Player Structure: The Game is Clearing Out
To understand why even top-down narratives cannot sustain momentum, one needs to understand who is still participating.
Source: PV internal research
Centralized exchange (CEX) spot traders, once the backbone of retail power, are gradually fading out. As the get-rich-quick effect of CEXs diminishes, new user inflow has stagnated. Worse, many existing users have either left or shifted to higher-risk perpetual contract trading. Meanwhile, the rise of spot ETFs has quietly drawn away another group of potential buyers. Centralized exchanges are no longer the default entry point.
Yield miners, typically with larger capital allocation scales, are increasingly looking off-chain. As on-chain yield opportunities decrease and risk-adjusted returns decline, capital is turning to more stable income sources in the real world.
Non-Fungible Token and GameFi participants, once the driving force of cryptocurrency adoption culture, are now largely marginalized. Some have turned to memecoins, but with the Trump wave subsiding, this trend seems to have peaked, leaving most participants disappointed.
Airdrop hunters, usually viewed as the most persistent on-chain participant group, are now openly conflicting with project teams over unfulfilled promises. Many cannot even cover their costs.
Across every user group, the trend is clear: participation is declining, belief is weakening, and retail investors are leaving.
Critical Point: Conversion Stagnation
The problem is not just user group fatigue; conversion itself has stalled.
Top CEXs serve about 400 million users (removing duplicates), but only about 10% convert to on-chain users (wallet users). Since 2023, penetration has barely changed; the industry struggles to convert users from the custodial layer.
Source: PV internal research
Meanwhile, traffic to mainstream exchanges has continued to decline since the 2021 bull market peak, even with Bitcoin reaching a new high. Conversion channels are not expanding.
Binance Traffic; Data Source: Semrush
Coinbase Traffic; Data Source: Semrush
Worse, the cryptocurrency awareness threshold may have been reached. According to a ConsenSys survey, 92% of global respondents have heard of cryptocurrency, and 50% claim to understand it. Awareness is no longer the issue; interest is.
And the retail enthusiasm curve is flattening. In the previous cycle, Non-Fungible Tokens and Dogecoin attracted many users. In this cycle, even Trump's memecoin couldn't break into the mainstream. The curiosity that once drove retail inflow is fading.
Yellow: Dogecoin Google Search Popularity
Blue: Non-Fungible Token Google Search Popularity
Red: Trump Meme Google Search Popularity
Slogan: Momentum of a Mirage
OM's rise was a carefully planned operation: shifting to the hottest RWA, aligning with UAE capital, forming partnerships, leveraging KOL promotions, and resetting liquidity through tokenomics.
Source: PV internal research
But despite a 100x price surge, there was no meaningful spot trading volume. OM lacks something that even the most perfect script cannot fabricate: genuine marginal buyers.
OM Trading Volume
When centralized exchanges adjust perpetual contract leverage and market makers face internal friction, the system quickly collapses. A 95% drop followed, not due to minting spirals or vulnerabilities, but because there were simply no buy orders.
OM is not an execution failure. It reflects a structural problem: in today's centralized exchanges, even a 100x price surge cannot spark new demand.
Federal Reserve Quantitative Tightening and USD Shortage
The structural shift in buyer behavior cannot be understood in isolation from macro liquidity. Since 2022, the Federal Reserve has begun significantly reducing its balance sheet, initiating one of the most cautious quantitative tightening cycles in recent years.
The Federal Reserve's balance sheet peaked at nearly $9 trillion in the post-COVID period, greatly stimulating global risk appetite through excess liquidity. However, as inflation intensified, the Federal Reserve changed its strategy, reversing the situation by withdrawing reserves, tightening financial conditions, and curbing the loose leverage that had fueled speculation in various risk assets, including cryptocurrency.
This contraction not only slows down capital in, but also structurally limits the type of buyers that cryptocurrencies have long relied on: quick-acting, risk-taking speculators.
Structural Transformation: Where the Next Demand Might Emerge
If the next marginal buyer does not come from crypto-native speculators, they may emerge from a structural transformation driven by policy, necessity, and real-world needs.
The normalization of stablecoin regulation may usher in a new era dominated by digital dollars. cross-an age of rising tariffs, capital capital controls, and geopolitical fragmentation, cross-border capital needs faster, more discreet channels. Stablecoins, especially those aligned with U.S. interests, are poised to become practical tools of economic influence.
Moreover, adoption is quietly rising in regions long ignored by the industry. In parts of Africa, Latin America, and Southeast Asia, where local currencies are unstable and a large population is unbanked, stablecoins have practical uses in remittances, savings, and cross-border trade These users are> are the new frontier of dollarization.
As Real World Assets (RWA) scale expands, more users will participate not for speculation, but to, but to acquire acquire real assets on-chain.
. cryptocurrencies as an asset have already captured most large of. dream of overnight wealth has lost its luster.
The U..S. dollar shortage is real. The Federal.Reserve's quantitative tightening and macroeconomic contraction policies structurally reduce the.
After experiencing all the cycles, narratives, and reshaping, cryptocurrencies are splitting into two distinctly different paths, and this divergence will only grow wider.
On one side is the speculative system once driven by meme, leverage, and narrative reflexivity, now gasping for life due to liquidity withdrawal. These markets depend on continuous marginal capital inflows, and without these inflows, even the most carefully designed strategies cannot sustbuying pressure.
On the other side, policy-oriented, utility-driven adoption is slowly but undeniably emerging. Stablecoins, compliant channels, and tokenassetsized. Not by hype, but out of necessity. Not a bubble, but enduring.
What is being witnessed now is not a market crash, but a structural rebalancing.
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