Crypto Winter 2.0: Who’s Naked Swimming When Speculation Recedes?

In February 2025, the crypto market is undergoing a brutal "coming of age."

Just as Bloomberg published that eye-opening commentary, Bitcoin’s price has fallen from the all-time high of $126,272 set in October last year, dropping below $80,000 at one point. This isn’t just a simple technical correction but a profound restructuring of industry fundamentals — the crypto world is painfully shifting from "narrative-driven" to "value-driven".

1. Market Crash: More Than Just Numbers Falling

The crypto market in early February was bloodbath. On February 3, triggered by Trump’s tariff policies, the total liquidation within 24 hours reached $2.23 billion, with longs accounting for over 84%. On February 25, BTC again broke the $90,000 psychological barrier, with forced liquidations totaling $1.57 billion. Altcoins like Solana were cut in half, with declines exceeding 50%.

But this crash was different from previous ones: it occurred without regulatory crackdowns—in fact, the regulatory environment was relatively relaxed, with the White House clearly pro-crypto. This confirms Bloomberg’s core point — the problem isn’t external but internal: the token-driven venture capital flywheel has broken, and retail demand has dried up.

2. Venture Capital Exodus: From "Born for Existence" to "Fighting for Value"

Santiago Roel Santos, founder of private equity firm Inversion, summed it up sharply: "As a category, Web3 currently lacks investment value to a large extent."

This realization is triggering a reshuffle in the industry:

Retreat sectors: NFTs, Web3 gaming, and DeFi clones lacking innovation. Data shows that Q1 2025 Web3 gaming investments plummeted 71% to $91 million, with 17 blockchain games shutting down and a market cap evaporation of 19.3%. Projects once financed by the "next Axie Infinity" narrative now face funding shortages and confidence crises.

Offensive directions: stablecoin infrastructure, on-chain prediction markets, and RWA (real-world asset) tokenization. Coinbase’s 2025 outlook lists stablecoins as a top focus — with a market cap of $193 billion, annual trading volume exceeding $27 trillion, evolving from a trading tool to the infrastructure for global capital flows.

More noteworthy is cross-sector migration: Mechanism Capital and Tangent, native crypto funds, are investing in robotics startups like Apptronik and Figure; Portal Ventures is expanding into fintech and AI. This isn’t just strategic adjustment but survival instinct — when traditional institutions bring capital and compliance advantages, simply knowing crypto is no longer enough.

3. New Valuation System: Revenue, Retention, and Willingness to Pay

Dragonfly partner Tom Schmidt warns: "I wouldn’t be surprised if more funds quietly shut down or scale back in the coming months."

This crisis stems from a complete shift in valuation logic. In early cycles, narrative hype, token liquidity, and market share were core metrics; now, revenue, user retention, and willingness to pay are the hard currencies.

This shift demands higher standards from entrepreneurs: no longer relying on white papers and tokenomics for funding, but proving real PMF (product-market fit). Stablecoins and prediction markets are favored precisely because they address real needs — high costs of cross-border payments and liquidity for event betting.

4. Structural Opportunities: Rebuilding from the Ruins

Despite short-term pain, market self-purification is creating new opportunities:

Structural demand for Bitcoin ETFs: Despite volatile prices, spot Bitcoin ETF inflows over the past five weeks totaled $6.63 billion, with BlackRock’s crypto portfolio soaring from $54.77 billion at the start of the year to $102.09 billion (according to previous data). This indicates institutional demand for allocation remains strong, even as prices decline, with institutions accumulating on dips.

Shift in Federal Reserve liquidity tools: The December FOMC meeting canceled the daily $500 billion standing repo facility, allowing banks to borrow from the Fed with unlimited collateral of Treasuries. This change increases market liquidity and could support risk assets (based on previous data).

RWA tokenization on the eve of explosion: Aside from stablecoins, tokenized RWA growth exceeded 60%, reaching $13.5 billion, with private credit, commodities, and real estate assets going on-chain. This may be the breakthrough for crypto technology to truly integrate into traditional finance.

5. Investor Insights: Return to Risk Control Anchors

For ordinary investors, the current environment calls for rational asset allocation. As previously analyzed, maintaining 30%-40% in gold as a risk control anchor, with the rest allocated to Bitcoin and quality mainstream coins, is especially valuable amid increased volatility.

Bitcoin at $91,000 and Ethereum at $3,000 reflect not just price fluctuations but the market’s search for new equilibrium prices. From $61,000 in August 2024 to now, the macro bull cycle’s structure remains intact, but deleveraging and narrative restructuring require time.

Conclusion: After the Winter, the Survivors Reign

The crypto industry is experiencing the pain of shifting from "wild growth" to "focused cultivation." This isn’t the first nor the last time. History shows that after each major reshuffle, projects that truly create value will gain a more solid footing.

When speculation recedes and the naked swimmers leave, those who can solve real problems, generate real revenue, and retain real users will remain. For investors, this may be the best time to reassess asset allocation and focus on fundamental value.

What are your thoughts on the current crypto market transformation? Do you believe it will lead to healthier development, or are you worried about the loss of innovation vitality? Feel free to share your comments and discuss!

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