Don't fall into a cynical perspective—The true turning point of the crypto economy and the pitfalls of market psychology

From 2024 to 2025, the crypto economy is approaching a critical crossroads. After four years of decline, market participants are experiencing deep fatigue and skepticism. Many analysts and investors now believe that “further growth is unlikely” or that “we are in a boring practical phase,” but we must not overlook the dangers of falling into such cynicism.

In reality, despite surface-level pessimism, the current crypto economy is undergoing structural changes comparable to the dawn of the internet in the late 1990s. Improvements in regulatory environments, the full-scale entry of institutional investors, and the emergence of truly valuable use cases—these factors are converging to create a rare window of opportunity for investors.

The Gap Between Expectations and Reality: The Vicious Cycle of Market Psychology

In financial markets, “expectations” drive prices. If market forecasts are exceeded, prices rise; if they fall short, prices decline. This pendulum swings widely over time, often resulting in a negative correlation between current market conditions and long-term returns.

At the peak of the 2021 bubble, the rise in crypto prices far exceeded market participants’ imaginations. Market caps of DeFi blue-chip projects soared 500 times, evaluations of multiple smart contract platforms surpassed $100 billion, and speculative fervor around metaverse and NFTs reached extreme levels—extreme expectations were everywhere.

However, from 2022 onward, this reaction was sharply negative. Looking at Bitcoin’s ratio to gold, it has barely recovered from its 2021 highs. Bitcoin’s performance as digital gold has been worse than four years ago. Other projects faced even more severe setbacks. The fundamental frustration was that the efforts of those who had worked tirelessly for four years went unrewarded.

During this period, most projects faced structural challenges such as:

Revenue Cyclicality: Cash flows depended excessively on market fluctuations, preventing the formation of sustainable growth models.

Regulatory Uncertainty: Ambiguous policy environments hindered the full-scale entry of large corporations and institutional investors.

Misaligned Incentives: Dual ownership structures meant that the interests of equity holders and token holders were not always aligned.

Information Asymmetry: Insufficient disclosure between project teams and communities led to excessive market volatility.

Within this vicious cycle, the four years from 2022 to 2025 brought deep professional fatigue across the industry. The gap between high expectations and reality drove many participants toward cynicism and false pessimism.

Structural Problems Moving Toward Resolution: Synchronization of Regulation and Technology

But here’s the key point: as these issues became widely recognized, the market responded accordingly, and many projects began reform efforts to overcome these difficulties.

Regulatory improvements have been particularly notable. Regulatory authorities in the US and other countries have started to establish clear frameworks for digital assets. This shift has allowed companies and large financial institutions to move beyond basic concerns of legality and instead focus on forward-looking questions like “How can blockchain technology expand revenue, reduce costs, and unlock new business models?”

At the same time, transparency practices are improving. The maturation of third-party data providers has enhanced project transparency and reduced information gaps among market participants. Many existing projects are now clearly separating on-chain revenue from off-chain revenue, enabling token holders to participate in actual cash flows.

Furthermore, the entire market is beginning to share a common understanding: that nearly 99.9% of assets, from the latest DeFi protocols and stablecoins to emerging use cases, must generate cash flows, and that truly scarce assets like Bitcoin and Ethereum are exceptions. This realization has significantly increased market rationality and improved analytical quality.

Meaningful Use Cases: Multi-layered Developments from DeFi to Payments

Valuable use cases created by the crypto economy are no longer just virtual assets—they are entering an implementation phase that addresses real social issues:

Peer-to-peer financial networks enable users to transact directly without intermediaries like governments or corporations, with smart contracts automatically executing contractual relationships.

Digital payment systems can facilitate low-cost, reliable value transfers anywhere in the world with internet access, potentially solving financial inclusion for billions.

Permissionless exchanges provide transparent, single-platform environments offering 24/7 access to top global assets for anyone.

Innovative derivatives tools and global collateral markets are delivering efficiencies and accessibility that traditional finance systems have struggled to achieve.

Most importantly, many of these use cases are showing increasing actual user adoption. Regardless of price fluctuations, projects with functional value continue to expand their user base.

The Rise of Ethereum, Solana, and Emerging Platforms

The network effects of leading blockchain platforms like Ethereum, Solana, and HyperLiquid are growing daily. These are not just technical platforms—they are supported by expanding ecosystems of assets, applications, businesses, and users.

Thanks to permissionless design and global distribution capabilities, applications on these platforms are among the fastest-growing businesses worldwide, achieving unparalleled capital efficiency and revenue turnover. In the long run, they are highly likely to form the foundation of a “financial super app” market.

Wall Street and Silicon Valley giants are pushing forward with blockchain initiatives for this reason. New products are announced almost weekly, spanning tokenization, stablecoins, and a wide array of related technologies. Crucially, these are not experimental but production-level products, many built on public blockchains.

Beyond Cynicism: Investors’ Perspective on Recognizing Opportunities

One of the most notable signs today is that many analysts hesitate even to predict exponential growth. Out of fear of seeming overly optimistic, they tend to avoid forecasts of more than 20% annual growth.

Having gone through four years of decline and valuation resets, the question we should ask is simple: if exponential growth truly occurs—if the era of effort being rewarded finally arrives?

The future of the crypto economy may be inevitable. This means your favorite tokens could go to zero. At the same time, the inevitable maturation of the crypto economy will intensify competition and increase pressure to deliver results more than ever before.

As more institutions and large corporations enter the space, they will inevitably eliminate weaker players. In a field where 90% of startups fail, this is an unavoidable reality. But don’t lose sight of the bigger picture.

Few technologies align more closely with the spirit of the modern era than the crypto economy. In a context of declining trust in institutions, unsustainable government spending, currency devaluation pressures, and fragmentation of global order—people are seeking fairer new systems beyond the old.

Many analysts cite Gartner’s bubble cycle or Carlota Perez’s theories, claiming “the best return period is over, and we are entering a boring practical phase,” but the reality is more intriguing. The crypto economy is not a single market maturing in sync; it is a collection of multiple products and businesses on different adoption curves. Speculation does not vanish as technology matures; it fluctuates with emotions and the pace of innovation.

While skepticism is rational, falling into cynicism is not. We are rebuilding currency, finance, and most importantly, economic governance. This process is full of challenges but also brimming with excitement and potential.

Your next challenge is to find ways to maximize this emerging reality. Instead of endlessly complaining that everything will fail, you must recognize the unique opportunities hidden within the fog of disillusionment and uncertainty, and be prepared to bet on the dawn of a new era.