Breaking the Illusion of Power: When the Cryptocurrency Market Faces Harsh Reality

The cryptocurrency market is witnessing a strange divergence: soaring adoption, but prices under pressure. This is not an abnormal phenomenon, but a natural manifestation of market maturation. The illusions of strength from previous price cycles have blinded many, leading them to believe that prices will always keep pace with technological development.

The reality is not so.

The Calm Before the Storm: When Applications Outpace Prices

Looking at a ten-year horizon, cryptocurrencies have an extremely attractive future. But maintaining this view is truly a tremendous psychological challenge. You need to prepare for a rather harsh scenario: adoption will continue to expand, but prices will stagnate or even gradually decline. Meanwhile, other sectors like AI or tech stocks will perform well, while cryptocurrencies are forgotten by the market.

This will feel unfair, and the process will serve as a test of resilience. But the delay in price movement is inevitable. Many crypto assets in the past were valued higher than their underlying economic fundamentals could support.

The market only cares about adoption when there is money and profit. Only then does it wake up.

Popular Applications: Opportunity or Trap?

The early stages of large-scale adoption often lead to valuation bubbles. This is the most uncomfortable phase: real demand cannot support overly high valuations, the market will self-correct, and this is an inevitable path toward sustainable growth.

When crypto infrastructure reaches a large scale, it becomes clear: external capital inflows far exceed actual demand. Adoption is not about confirming value but is a stress test for business models.

Some projects will quietly disappear. The remaining ones, even if they survive, will be valued significantly lower than the peak expectations they once built.

Cryptocurrencies are gradually stepping out of the spotlight, becoming normal. This is the path from noise to maturity. This is truly a good thing.

Internet history has proven: when bubbles burst, the Nasdaq drops 78%, but internet users triple. Investors suffer losses, but software quietly changes the world. Infrastructure technology never rewards impatient investors.

When Infrastructure Wins: Who Benefits?

Market transitions will be uncomfortable for many participants. Long-standing builders will see other companies copying their work and reaping more benefits. Early crypto venture funds will witness traditional funds benefiting more.

Some issues are structural, some are self-inflicted.

The market is self-correcting. Open networks will thrive, incentive systems will change, and mechanisms for discounting value will improve. But not all models will survive to benefit from this growth.

Crypto adoption is progressing quietly, just the market hasn’t noticed yet. It may take years for the market to rebuild the value relationship, recognizing that encryption technology is the core operating system, not just a speculative asset.

Two Cycles: Price and Adoption

The price cycle is driven by psychology and liquidity. The adoption cycle is driven by practical utility and infrastructure. These two factors are related but not synchronized.

In previous revolutionary technologies, prices often led. But with cryptocurrencies, currently, adoption leads, and prices lag behind. The current investors are chasing AI, not blockchain.

However, a world without stablecoins, transparent capital channels, or 24/7 global payments is becoming harder to imagine than ever.

The deepest lesson from these cycles: accept that the disconnect between adoption and price can last much longer than expected. If you want sustainable returns, you must keep your rationality when patience wears thin.

This is not a call to HODL.

Many crypto projects will never revive. Some have flaws from the design stage, some lack competitive advantages, some are completely abandoned. New winners will emerge, stars will collapse, and a few will turn around and succeed.

Healthy Correction

We are entering a completely different economic and legal environment. This opens opportunities to address existing issues: weak revenues, incomplete asset disclosures, inappropriate token-structure, non-transparent incentives.

If cryptocurrencies truly want to become what they aspire to, they must first demonstrate those qualities.

I believe that within 15 years, most enterprises will adopt encryption technology to maintain competitiveness. Then, the entire market capitalization will surpass $10 trillion. Stablecoins, tokenization, user base, and on-chain activity will grow exponentially.

At the same time, valuation standards will be redefined, current giants may weaken, and irrational models will be eliminated. This is healthy and necessary.

Cryptocurrencies Will Ultimately Become Invisible

The more core crypto becomes to products, the more vulnerable the business models. The lasting winners will deeply integrate it into their processes, payment systems, and balance sheets.

Users won’t need to realize the existence of encryption technology; they will only feel faster payments, lower costs, and fewer intermediaries.

Cryptocurrencies should become pure and “boring”.

As capital tightens, the era of rampant airdrops and irrational incentives will end. This is just a historical cycle, nothing new.

My basic view is simple: adoption will accelerate, prices will adjust, valuations will return to reasonable levels. Crypto is a long-term trend, but that doesn’t mean the tokens you hold will definitely increase.

Who Will Benefit from Encryption Technology?

The underlying technology mainly benefits consumers through lower prices and better experiences. Secondary beneficiaries are businesses upgrading their systems to leverage cheaper, faster, more programmable infrastructure.

This raises tough but necessary questions:

• Traditional payment companies or Layer 1s?
• Stripe or Ethereum?
• Robinhood or Coinbase?
• Layer 1 protocols or user aggregation platforms?
• DeFi or traditional financial stocks?
• DePIN or infrastructure stocks?

This is not an absolute choice; diversification is still feasible. The key is the relative value: who will capture the residual value created by blockchain?

I lean toward traditional businesses using open payment channels to reduce costs and increase margins. History shows they often benefit more from the infrastructure itself.

What I Believe and Don’t Believe

I believe networks with real demand will eventually have commercial value, as Internet has proven. I am certain some Layer 1s will have value confirmed by their development. But most will struggle to attract users and find supporting value.

I believe the gap between winners and losers will widen. Distribution, go-to-market strategies, user relationships, and unit economics will matter more than early technological advantages.

A common misconception is overestimating early technological advantages while underestimating the factors necessary for further development.

Looking Back at Reality

I am not overly optimistic about price trends in the next few years. Adoption will increase, but prices may continue to decline, amplified by mean reversion and cooling AI cycles. But patience remains a major advantage.

I am optimistic about:

• Crypto-as-a-service models
• Businesses empowered by crypto

I am pessimistic about:

• Over-financialization
• Failure of unit economics
• Overbuilding infrastructure

Protecting principal becomes extremely important. The value of cash, undervalued not because of its profit but because of psychological immunity. It allows you to act decisively when others are paralyzed.

Markets are entering an era of rapid pace and impatience. A longer-term vision than most is a real advantage. Managers must constantly adjust portfolios. Small investors chase short-term trends. Institutional investors will again declare crypto dead.

Gradually, traditional companies will adopt crypto, and balance sheets will connect to blockchain. One day, looking back at this phase, everything will become clear.

Signals are everywhere, but firm conviction is often easier when prices have already risen.

Before that: brace for pain.

Waiting for sellers to cut losses, waiting for confidence to collapse. But we are not there yet.

No need to rush. Markets will continue to fluctuate, life will go on. Spend time with those you care about. Don’t let your portfolio become your entire life.

The crypto world will operate silently, whether in darkness or under bright lights.

Good luck to everyone.