Author: 0xJeff; Translator: Deep Tide TechFlow
2025 was filled with unprecedented turmoil and change. We welcomed an American president who was said to support cryptocurrency and artificial intelligence. However, instead of the expected bull market, 2025 became a year of "slaughter" for the entire industry.
Most altcoins experienced an 80%-99% crash in 2025. Bitcoin's market capitalization share returned to 2019-2020 levels (over 60%), outperforming most cryptocurrencies. Ethereum's (ETH) trading price is almost the same as in 2022. The altcoin market is highly fragmented (there are 40 to 50 million coins on the market). Despite a constant stream of positive news within the industry (such as a clearer regulatory framework, ETF approvals, corporate adoption of blockchain technology, and institutional investment in BTC, ETH, and altcoins), the stock market's performance in 2025 completely overwhelmed the crypto market. Despite the pain and turmoil, 2025 is still considered by many to be the industry's "year of maturity," but it also witnessed the departure of a large number of practitioners and investors. So, for those still holding out in the crypto space, here's the key stuff you need to know before 2026 arrives: Let's dive in ↓ Prediction Markets: A Versatile Trading Tool Prediction markets emerged as one of the fastest-growing verticals in 2025—weekly notional trading volume reached $3.8 billion for the first time, with Polymarket, Kalshi, and Opinion becoming the dominant platforms in the space. While the debate continues about whether prediction markets are equivalent to gambling, the U.S. Commodity Futures Trading Commission (CFTC) classifies them as event contracts or binary options based on the outcomes of real-world events. The CFTC's innovation-friendly stance, coupled with increasing market demand for betting/predictions, has driven the rapid growth of prediction market trading volume in 2025. From a trading instrument perspective, prediction markets offer tremendous flexibility. They can be viewed as a more user-friendly options tool (though still lacking in liquidity). You can leverage your trades in any market, choosing "yes/no" directional bets, using them as a hedge (by holding spot positions elsewhere), or earning returns and potential airdrop rewards by implementing a delta-neutral strategy (equally distributing "yes/no" shares across the market). Cash-backed put options and covered call options are ideal for investors looking to manage their investments more conservatively. Instead of directly buying or quickly selling altcoins when prices fall, you can generate cash flow by selling call or put options. If the price reaches a target, you can choose to buy or sell your altcoin at a lower price; if the price doesn't reach the target, you'll recover your principal. This strategy is one of the best ways to generate a high annualized return (APR) for your altcoin or stablecoin. The only thing to note is that your principal will be locked for a period of time (usually 3-5 weeks), but you will immediately receive the option premium (premium) when you sell call or put options. Narrative fatigue + Equity vs. Token = Return to Fundamentals. Market narratives are rotating much faster than before; what used to last for weeks or even months now only lasts a few days at most. The crypto community (CT) is shifting from chasing narratives to focusing on real fundamentals (such as user numbers, revenue, and growth metrics). The market is more inclined to evaluate metrics of the real business and clarify the value transfer relationship between the business and the token. However, this year has witnessed too many chaotic situations in the game between equity and tokens, especially in the M&A field: Pumpfun acquired Padre (a trading instrument) without fully informing Padre token holders. After the acquisition announcement, PADRE tokens plummeted by 50%-80%, triggering a strong backlash from the community. To quell the Padre community's dissatisfaction, Pumpfun promised to airdrop PUMP tokens based on the pre-acquisition PADRE holding value. Circle acquired Axelar, but similarly ignored Axelar token holders. After the acquisition, AXL tokens fell sharply. This is recent news, and what will happen next is unknown, but the community is already furious (which is understandable). The debate between equity and token holders is escalating, leading us to a deeper issue… Market Governance Organizations and Ownership Tokens MetaDAO has launched a fair, transparent, and manipulable ICO launch platform, characterized by high liquidity, a relatively low fully diluted valuation (FDV) structure, and no venture capital (VC) or private placement allocations. Furthermore, it introduces mechanisms such as performance-based team unlocking and potential fund recovery features. This structure gives token holders true ownership, control, and alignment of interests, effectively solving problems such as project team collapses, token dumping, opaque operations, and improper acquisitions. Colosseum (an independent organization accelerating the Solana ecosystem) recently launched "STAMP" (Simple Token Protocol, Market Protection Mechanism), a new investment contract designed to integrate private venture capital financing with the public MetaDAO ICO, ensuring investor rights and aligning with MetaDAO's on-chain governance. The MetaDAO model has spawned a new category of "ownership tokens," projects that launch via MetaDAO ICOs. Many launched projects have performed strongly—such as Umbra, Omnipair, and Avici—experiencing high demand during their funding rounds, with their tokens significantly outperforming the market in 2025. Through the MetaDAO model, token holders have gained greater importance, truly wielding a voice and effectively owning the project. Project revenue and fees are no longer channeled to equity holders but directly benefit token holders. The trend of market governance organizations and ownership tokens is likely to continue into 2026 and will intertwine with subsequent trends… The Rise of Security Tokenization On-chain liquidity is constrained, and market participants are increasingly focusing on fundamentals, revenue, buybacks, and other intrinsic value. Meanwhile, enterprises are adopting stablecoins, and more and more institutions are investing capital in the crypto space. Recently, tokenized securities have become simpler and more feasible than ever before, especially for regulated institutions. On December 11, 2025, the security tokenization field saw a significant regulatory breakthrough. The U.S. Securities and Exchange Commission (SEC) issued a No-Action Letter, explicitly stating that it would not take enforcement action against the pilot security tokenization program of DTC, a subsidiary of DTCC (American Depository Trust and Clearing Corporation). The pilot program includes the tokenization of Russell 1000 index constituents, U.S. Treasuries, and major ETFs. This mechanism, during the pilot period (starting in the second half of 2026 and lasting three years), will facilitate compliant centralized tokenization operations through DTC, directing activity to regulated infrastructure rather than fully decentralized alternatives. This means that from 2026 onwards, we will see more security tokenization projects, which also means increased demand for tokenized stocks, accelerating the convergence between traditional finance (TradFi) and decentralized finance (DeFi). Consumer-grade crypto products and perpetual contracts become the core of crypto. In 2025, consumer-grade crypto products and perpetual contracts (Perps) will become the core hot topics in the crypto industry: Pumpfun will peak in 2024-2025. Virtuals adopted a similar model but incorporated a new AI-powered intelligent agent narrative. Zora also made similar attempts in the content token space and received support from Jesse. Collectibles, fantasy football, and prediction markets will be very popular in 2025. These are all consumer-oriented products that offer fun for crypto-natives while also attracting non-crypto users (such as prediction market participants) to earn rewards while having fun. Crypto itself is like a game, and trading is a form of entertainment. Therefore, innovative consumer-grade products that effectively combine both often stand out. Perpetual contracts have a similar appeal because they allow users to make precise bets on asset price fluctuations. If you look at the key metrics for prediction markets and perpetual contracts, you'll find that they both reached all-time highs (ATH) in 2025. These figures seem to be screaming that the Product-Market Fit (PMF) in the crypto space has emerged: prediction markets have reached $3.8 billion in weekly nominal trading volume, while perpetual contracts have seen a staggering $340 billion in weekly trading volume (a record $1.3 trillion in monthly trading volume). This is why people are so enthusiastic about participating in platforms like Hyperliquid, Lighter, Aster, Polymarket, and Opinion. The massive activity, huge demand, and large capital flows directly translate into higher valuations and more airdrop rewards. Consumer-grade crypto products also hold great potential, but we haven't seen truly sustainable consumer-grade crypto products by 2025. Sportsdotfun (SDF) has shown good early growth momentum and is currently raising community funding on Legion and Kraken. While the future of this space remains uncertain, the prospects are currently exciting. From this, we can learn that if you want to find your edge in this market, you either invest in platforms (such as prediction markets, perpetual contracts, and consumer crypto products) or actively participate in these categories: Learning how to trade perpetual contracts; Making predictions in prediction markets; Using consumer crypto products. Through these practices, you can better understand the market and find your competitive advantage. Otherwise… You can become a “storyteller.” Yes, the Wall Street Journal (WSJ), Silicon Valley, and various tech professionals are now enthusiastic about the role of “storyteller.” Many startups have opened up “storyteller” positions. In the crypto space, this is actually quite commonplace. We have "Yappers," Key Opinion Leaders (KOLs), and storytellers who have been discussing projects and helping build the crypto community for years (even before Kaito coined the term "Yapper"). But now, it seems the whole world is beginning to realize the importance of having the right narrative and communicating your brand, product, and positioning appropriately. However, the role of the storyteller goes far beyond that of a "Yapper." Currently in the crypto space, many "Yappers" are simply copying and pasting content to "get noticed," rather than trying to truly learn and understand what they're discussing. This provides an opportunity for those who truly understand the industry, possess expertise, or are simply curious to learn—whether in the crypto community (CT) or the wider field. Those skilled at storytelling can ultimately gain the freedom to choose: they can choose to develop independently or be "acqui-hire" by startups and projects that align with their brand. In 2025, we've already seen successful examples of this dynamic. For instance, Kalshi recruited prominent figures from the crypto community, while several crypto projects successfully shaped their brand and attracted more users through close partnerships and ambassador programs such as sharing badges. If you're good at storytelling, this is your stage! Key Takeaways: The crypto market in 2024-2025 was like playing Monopoly; however, 2026 will be more like a stage for corporations, startups, and suited financiers—less Monopoly-like gameplay, fewer easy money opportunities, and less of the narrative of simply "numerical growth." The future will focus more on fundamentals, alignment of interests, value accumulation, and the leverage of compound interest. If you can't cultivate a genuine competitive advantage, even if you're an OG (Original Gamer), you may ultimately become someone else's "bagholder." Your competitive advantage can be any of the following: Having a clear mind, not being blinded by delusions; being good at telling a good story; creating high-quality products that people truly need; understanding trends; and trading rationally, not swayed by emotions. Persist, find your strengths, and you will be rewarded.
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