From Stablecoins to DAOs: Five Insights Reshaping the Crypto Market
Author: Route 2 FI
Translation: Baihua Blockchain
As the cryptocurrency industry matures, its development trajectory becomes clearer, shaped by innovation, challenges, and shifting priorities. Here are key insights into the evolution of this dynamic market, exploring its greatest opportunities and obstacles.
Speculation: The Lifeblood of Cryptocurrency
Cryptocurrency is essentially a revolutionary financial system infrastructure, akin to the internet's transformation of information access. However, despite its transformative potential, speculation remains the dominant force driving industry activity.
Whether through trading, borrowing, or derivatives markets, speculation creates the largest outcomes and revenue sources. While the pace and intensity of speculative activity may fluctuate over time, it has always been the core driving force of the cryptocurrency industry. This reality suggests that, although the utility of cryptocurrencies may expand in the future, their speculative nature will continue to occupy a central position for many years to come.
Stablecoins: Approaching a Turning Point
With Circle's impending IPO, the stablecoin market is nearing a turning point. Although stablecoins have long been considered the cornerstone of cryptocurrency adoption, their growth may soon plateau due to regulatory challenges and diminishing competitive advantages. Lower interest rates may further weaken their appeal.
The next wave of opportunities for stablecoins may not lie in globally dollar-backed solutions, but in localized fintech applications leveraging crypto payment rails. Entrepreneurs outside Silicon Valley—especially those unable to secure large early-stage funding—may find more success by focusing on regional use cases rather than attempting to replicate U.S.-centric market models.
Decline of Token Premiums
In recent years, the dynamics of the token market have changed dramatically. Tokens that were once seen as high-potential assets and enjoyed significant premiums now face stricter scrutiny from investors, who prioritize tangible revenue sources over speculative hype.
Two main trends are driving this shift:
In a post-bull market environment, the collapse of token premiums makes it increasingly difficult for tokens to achieve high valuations after vesting schedules take effect. *As investors turn to traditional assets (such as stocks and currencies), which offer similar volatility but clearer directional trends, the marginal buying interest in tokens is fading.
Only a few tokens linked to tangible revenue may thrive in this new environment.
Venture Capital Faces Liquidation
As liquidity for token listings dries up, crypto-focused venture capital is undergoing a paradigm shift. Many venture capital firms that historically relied on retail-driven trading platform listings for returns now face a new market: fewer entrepreneurs are choosing to issue tokens. Instead, entrepreneurs tend to form small teams focused on sustainable revenue sources, challenging the traditional venture capital model.
Since the FTX and other high-profile failures, the market has undergone broader changes. As the industry adapts to these new realities, only the most adaptable venture capital firms will remain relevant.
Building Consumer Applications with a Long-Term Vision
A notable gap in the crypto ecosystem is the lack of large consumer applications akin to Uber or Instagram. While many attribute this to poor user experience or marketing failures, a deeper issue lies in the capital flows within cryptocurrency prioritizing short-term returns over long-term product development.
To unlock the potential for mass-market consumer applications, entrepreneurs must embrace a longer time horizon and resist the temptation of immediate token liquidity—a challenging but necessary shift for sustainable growth.
Cryptocurrency and AI: Bright Prospects but Uneven Development
The convergence of cryptocurrency and artificial intelligence (AI) holds immense potential but has yet to be realized on a large scale. Concepts like provenance and distributed computing sound appealing in theory but face significant scalability challenges when applied to real-world AI use cases.
An interesting area of exploration is crowdsourced IP addresses—this model, similar to "play-to-earn" games, could open new possibilities for decentralized networks.
Providing Banking Solutions for Crypto-Native Users
Offering tailored banking solutions for crypto-native users with monthly incomes between $5,000 and $20,000 is a niche but valuable opportunity. These users require integrated financial services, including payroll management, portfolio building (including traditional assets like stocks), and borrowing options—all within a crypto-friendly framework.
Although this market may initially be small (estimated at 5,000 to 10,000 users), it represents untapped potential for innovative financial products.
Reviving DAOs through Community Coordination
Decentralized Autonomous Organizations (DAOs) have struggled to remain relevant as many users lose interest in managing platforms like borrowing protocols or derivatives trading platforms. However, platforms like Farcaster may inject new vitality into DAOs by facilitating large-scale community coordination around shared resources and assets.
If successful, this approach could pave the way for more sustainable meme coins, which are associated with community-driven value rather than speculative hype.
Crypto Gaming: A Field Ready for Revival
Despite seeming dormant since the 2022 Axie Infinity craze faded, crypto gaming remains one of the highest-potential areas for consumer applications. With sufficient time for stability and product development, 2025-2026 could become a breakthrough period for games that combine engaging gameplay with sustainable economic models.
Entrepreneurs willing to persevere through this challenging phase may ultimately attract millions of users and foster a thriving market.
Talent Drain: Challenges Beyond Liquidity
As the cryptocurrency industry’s progress slows relative to the rapid development of AI, many top talents are leaving the industry altogether—a trend that may impact morale more deeply than price declines.
In this environment, companies with strong cultures will become beacons of hope, attracting top talent even during turbulent times.
Integration of Media and Research
As traditional funding sources dwindle, media and research focused on cryptocurrency are entering a consolidation phase. The future belongs to those companies that combine high-quality creative output with financial expertise and robust distribution strategies—this combination, while rare, is highly valuable.
The Growing Influence of Equity Financing
As fewer entrepreneurs issue tokens, more companies are achieving significant revenue milestones, and equity financing will play an increasingly important role in the evolution of cryptocurrency. Within the next 18 months, equity financing may become the dominant force in funding projects with scalable and validated revenue sources.
The Fusion of Creativity and Cryptocurrency: Opening New Frontiers
Combining creative industries like music, art, and writing with crypto-native technologies to reach audiences on a larger scale holds untapped potential. Success in this area requires partners who understand both consumer distribution and the unique needs of creators.
Conclusion
Cryptocurrency continues to evolve at an astonishing pace—both idealistic and morally complex—as it reshapes global systems while confronting new challenges. By focusing on data-driven insights and long-term strategies rather than short-term noise, innovators can help shape its next chapter while navigating its dual nature.
Article link: https://www.hellobtc.com/kp/du/04/5746.html
Source: https://theblackswans.substack.com/p/the-evolution-of-crypto-a-look-at
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