jakiro
The current status of the Web3 industry and crypto market, in a nutshell, is that the currency price is OK, but the industry is deeply bearish.This situation has never happened in this industry before.In the past, both volume and price have risen or both volume and price have fallen. Now this situation of serious deviation between volume and price is the first time in more than ten years of the emergence of the crypto market.
Although the situation seems strange, the reason is not complicated and the liquidity is insufficient.Many people are asking why the currency price and total market value seem to be OK, but the industry is so depressed?Actually, this question is wrong.Don’t forget that the current federal funds rate in the United States is still at a historical high, and macro liquidity is in a tightening cycle. In this cycle, the stock market and currency market should be a bear market.So what is really strange is why the currency price is okay when the industry is in a deep bear market?
1. Structural changes
If something goes wrong, there will be a demon.Under the appearance of the deviation between the currency price and the industry, there is a huge change in the underlying market structure.Few people realize that the crypto market has undergone a fundamental, structural change at the beginning of this year.The passage of Bitcoin ETFs marks the emergence of a digital currency market with almost completely independent liquidity outside the originally free-flowing crypto market: the US stock market.This is actually a watershed event in the history of crypto development. The current deviation between the currency price and the industry is a new phenomenon that has emerged under this new market structure.
Because there were two markets, there were two seemingly contradictory scenes.The “okay” currency price was created in the US stock market.And the “no” industry happens in the crypto market.
Bitcoin’s rise since the second half of last year is mainly driven by ETFs.The funds entering the ETF are basically left in the hands of Wall Street, and have not entered the free crypto market, nor have they nourished innovative crypto projects.Instead, the crypto market remains amid a funding shortage caused by high interest rates and AI oppression.The lack of injection of external liquidity will inevitably lead to inversion of the industry.The various embarrassing situations that are now emerging in the crypto industry are all manifestations of the shortage of funds.
A real bull market will only come when liquidity moves towards loosening.Conversely, when liquidity is loose, funds will be injected into the crypto market again, and a bull market will surely come.
More and more signals indicate that the Fed’s rate cut cycle is only a few months away.Federal interest rates are currently at historical highs, and optimistically estimated that the interest rate cut cycle may last longer, providing a long-term era for the development of the industry.Pessimistic estimates that after a period of interest rate cuts, inflation soars, and the Federal Reserve will be forced to raise interest rates again to confirm the chaos.I personally am cautiously optimistic about the future, but even in the chaos, 2025 is likely to be a good year.
In the long run, there will be a big battle between the two markets, but it will only be a battle between the male and female, and the two will coexist for a long time.
2. Four tracks with great opportunities
Now many people are guessing what themes will emerge in the next bull market.I also give my own opinions and reasons here, which do not constitute investment advice and are not responsible for the results.
BTCFi
Why is BTCFi one of the most anticipated tracks in the next round?
First of all, BTC is the only consensus asset that can span the two markets of US stocks and crypto in the next cycle. ETH is not yet good yet, and the others must be ranked behind.Only BTC can connect the consensus and liquidity between the two markets.
Secondly, BTC is very large in scale.BTCFi can only mobilize 5% of BTC assets in the next cycle and add some derivatives, and the scale may reach the level of 100 billion.
Third, the infrastructure problems that have long hindered the development of BTCFi have been basically solved, whether it is Lightning Network, Side Chain, BTC L2, or the cross-chain bridge to the EVM chain, whether it is signing multiple wallets or BTC Script smart contracts,The current technical level is no longer the same as in the previous round.Now in BTCFi, there are basically only things that cannot be imagined, but nothing can be done.
Fourth, the mentality of the BTC community changes.BTC hodlers and ETH fans are two completely different groups, with great differences in growth paths, concepts and mentalities.BTCFi was not able to develop in the past, largely because BTC hodlers were not interested in it at all.However, with the outbreak of the inscription ecology last year, the BTC community has undergone two changes. One is that a group of active members who have been baptized by DeFi have joined the BTC community. The other is that among the originally very conservative BTC hodlers, there are also a small number of people.Begin to change your mindset and be willing to actively participate in the construction of BTCFi.
In addition to the above four reasons that are easier to understand, I am optimistic about BTCFi.Anyone who has been in this industry still remembers that before 2018, BTC was very liquid and active.However, with the tragic collapse of the ICO bubble in 2017-18, especially the rise of stablecoins, BTC has basically retreated to the digital gold positioning and its activity has dropped greatly, so many people believe that BTCFi may be a false proposition.But anyone who is familiar with the history of world monetary and financial knows that this is actually a problem that humans have faced and perfectly solved in history.
During the hundreds of years of gold standard, gold, as a standard currency, also faced similar contradictions.The core problem is that on the one hand, the reason why gold is credible is because it preserves its value and resists inflation, which is the consensus basis for it to become a basic currency.But it is precisely because of this consensus basis that the public tends to store gold treasury.Currency needs to be circulated, and non-flowing currency is not a good currency.In other words, there is a contradiction between the characteristics of gold as a reserve of value of currency and the characteristics of its trading intermediaries.what to do?
In September 1717, Newton, as the director of the British Royal Mint, proposed to tie gold to the pound.This is actually Newton’s other great contribution to the history of mathematics and physics. Those economic blind people did not recognize it and slander Newton for being mediocre in the rest of his life, which is ridiculous.Newton actually created a flexible reserve for gold, which on the one hand satisfies people’s desire to properly preserve naked gold, and on the other hand, it uses the active pound as a voucher, and gradually forms a double-layer currency creation system, which not only meets security,It also satisfies liquidity and drives high-speed operation of economy and trade.During this golden years of human economic history, gold rarely appears directly in economic activities in naked form, but gold is inseparable from economic activities.
I think BTCFi is currently at such a historical turning point.If this round of BTCFi can achieve good development, it will become the stabilizer of the entire crypto economy. On the premise of solving the problem of safe storage, it will actively participate in the crypto economy in the form of “vouchers” and effectively and continuously promote it.crypto economic growth.This is the fundamental reason why I am optimistic about BTCFi.
Meme
Anyone who knows me knows that I am not a fan of memecoin, which is determined by my personal values.But even so, I still want to include meme in one of the four most optimistic tracks.
This is not because meme has almost become the only track in the bear market that is still creating stories, but because meme’s underlying logic reflects increasingly stronger advantages in the moral dilemma of the crypto world.
Meme coins have two advantages.The first advantage is easy to think of, which is the low cost of entry.The second advantage is relatively profound, that is, meme coins put fairness and transparency before the value commitment.
What is the biggest difference between Meme and the so-called value coins?It is that the value coin first promises value, while the meme coin first promises fairness and transparency.I’m not saying that meme coins are really fair. In fact, there are many tricks behind it, but in comparison, the information asymmetry of meme coins is generally better than the value coins.
Which is more difficult, value or fairness?Wang Yangming said that it is easy to get away from the thieves in the mountains, but it is difficult to get away from the thieves in the heart.It is relatively easy to make value for an asset, but it is much harder to distribute value fairly.Value coins are easy to make them easier and then difficult to make them difficult.Since the regulatory mechanism in this industry has not been established, for every value coin team, once the value emerges, the team will face the temptation of opportunism. This is the real test and challenge. Those who can pass this level,Very rare.Once a team of value coins turns aside the promise, the coins will become neither fair nor valuable.On the contrary, a meme coin can have no value and is completely manifested as a gambling game, but it uses some rules to make the information symmetry relatively in place.On this basis, it is even possible to give value to meme coins through secondary development. This is to make it difficult first and then make it easy, which is much easier than to reshape a junk value coins.
Please don’t get me wrong. I firmly advocate that crypto should move towards value creation, and I will work hard to make a good value currency.But I must also admit that favoring meme coins is a rational choice for many people.
Therefore, I think in the next cycle, although the probability of betting on a meme coin as an individual is still very low, the meme coin as an overall sector will continue to be popular.Moreover, I think the meme sector will have some value creation behavior, that is, some third-party teams develop and apply them around the existing meme coins, thereby injecting value into the meme coins.
Stablecoin payment
Is there no application for blockchain except for currency speculation?Many people think so, but they are actually very wrong.The largest application on blockchain is payment, and the fastest growing payment in the payment track is stablecoin payment.
Strictly speaking, I put stablecoin payments in one of the four tracks is cheating.Because the outbreak of stablecoin payments is not a speculation in the future, and does not require any risk of making any judgments, but a trend that has been established.
Previously, stablecoins have been widely used as a major token asset for investment and incentives in the crypto industry.The recent emerging trend is the gradual penetration of stablecoins in cross-border trade.Especially in the past two years, a large number of small and medium-sized cross-border traders have begun to use stablecoins to settle B2B in their supply chains.In this field, the advantages of blockchain payment that is settlement, minute-level clearing, and life-long checking of transaction records are fully reflected. As long as you use it carefully, you can’t stop and you don’t need to spend time to convince.
The only obstacle at present is regulation.
There is a common misunderstanding in the crypto circle that major countries will suppress and crack down on stablecoin payments for a long time.As the design team of the ERC-3525 digital ticket standard, we have had in-depth exchanges and cooperation with central banks and multinational financial organizations in many countries in the past two years. I can tell you that this is not the case at all.From international settlement banks to the World Bank, from central banks in some Southeast Asia and Africa to some international commercial banks with huge cross-border businesses, they have fully understood the advantages of stablecoins, and most of them know that this is an unstoppable trend., so we are taking a positive attitude to learn and accept.
In this round, it was not the wolf that came, nor was it Ye Gong good dragon, but it was based on relatively mature theoretical thinking and certain practices.The main problem they are facing now is how to implement the control obligations that any country ruled by law and responsible financial institutions in the country ruled by law should fulfill while generally accepting stablecoin payments as a legal means of payment.A large part of the major research in this field we are currently exposed to revolve around this issue.Once this problem is broken, stablecoin payments will sweep the entire financial industry like a flood opening.
Stablecoin payment must be the first successful sector in RWA.Many people think that RWA will be popular in the next wave. I think the overall heat is not yet. Only when stablecoin payment, as the pioneer sector of RWA, can other RWA assets gradually take off, and this will require at least another cycle..However, there is no problem with the overall upward trend of the RWA track, and Patient Capital should gradually begin to layout RWA.
Web3 Social
The leader of the Web3 social track will appear in the next wave, which is my boldest prediction.This topic has been hyped for a long time and every attempt has not been successful. Why do I think the breakthrough point is in the near future?This is mainly because new ideas and solutions have emerged, and representative cases are Solana Blink and TON.
First of all, we need to understand that the so-called Web3 is the value Internet, and the so-called Web3 social network is actually a social network that can perform value operations.In other words, compared to Web2 social, Web3 social is mainly an incremental factor, rather than a recurrence.Functionally speaking, Web2 social networks have done a good job in content, and there is no need for Web3 social networks to start a new business.You rebuild a social platform, use 99% of the resources to repeat what the Web2 social network has done to perfection, and you also have to convince users to give up the social assets accumulated over the years and transfer all the social relationship and data assets to the new platform, This is not only very difficult, but also very stupid.Why not add a value layer to the existing Web2 social network and allow everyone to perform value operations such as payment and transactions in existing social networks?
This idea is so simple and natural, but entrepreneurs in the entire Web3 social track have never thought of it for several years.Fortunately, with the emergence of TON and Solana Blink, this layer of window paper was finally pierced.What are the common characteristics of TON and Solana Blink?It is to build a value layer on the social network in the prime location of the Web2 CBD, instead of going to the wilderness to rebuild the building, hoping that everyone will move collectively for such ideological and value propositions.In other words, let Web3 run and find traffic instead of letting traffic run and find Web3.Many people only see trees but not forests, only look at the status quo and not trends, and are obsessed with analyzing data all day long. Sometimes they accuse TON of having traffic but not valuable, and sometimes they laugh at Blink for being loud and thunder.These accusations are not a problem, but they are ignorant of the general trend and cannot see the great significance of the transformation of the thinking paradigm of Web3 social network construction.I’m not saying TON and Blink will definitely succeed, let alone that they are the last ones.Just like there was Mi Chat before WeChat, and there was before Douyin.Musical.ly, success does not have to be in them, but they open the right direction and will attract the better innovators behind, which is the most important.
Socialism must be the king of all applications, this is true in the Web2 era and that in the Web3 era.There is no logical problem with Web3 social networking. The reason why it was not done before was that it was the wrong way of thinking.Now that this window is broken and opened, it will surely usher in the great development of Web3 social payment and social transaction products, which will largely determine the basic structure of the Web3 industry in the next ten years. I have strong confidence in this.
