The Truth and Lies of Cryptocurrency: Industry Revelation for 2025

Author: Ignas Translator: Shan Ouba, Jinse Finance

Reviewing the 2025 Industry Performance to Find the Right Direction for 2026 A year ago, I wrote an article titled "The Truth and Lies of Cryptocurrencies in 2025."

At that time, everyone was touting a higher target price for Bitcoin. I wanted to use a different analytical framework to identify potential fallacies in market consensus and develop differentiated investment strategies accordingly.

My goal is simple: to uncover investment logic that already exists but has been ignored, neglected, or misunderstood by the market.

The Truth and Lies of Cryptocurrency in 2025

Before sharing our analysis for 2026, let's clearly review the key events that truly influenced the industry's direction in 2025—which judgments were proven correct, which views were disproven, and what lessons we can learn from them.

After all, if you don't review your investment strategy, your actions are not investing, but simply guessing.

Quick Summary

1. “Bitcoin will peak in the fourth quarter” Most people are optimistic about this view, but at the time I felt that this judgment came too easily and didn't seem like it would come true. As it turns out, they were right, and I was wrong (and I'm paying the price for it). Unless Bitcoin continues to surge from its current price, breaking the historical pattern of the four-year cycle, I admit this judgment is wrong.

2. “Retail investors prefer meme coins” The fact is, retail investors don't favor cryptocurrencies at all. They turned to buying gold, silver, AI concept stocks, and all assets unrelated to cryptocurrencies. The so-called meme coin supercycle or AI intelligent agent supercycle ultimately did not arrive.

3. “The AI ​​and cryptocurrency fusion track will continue to strengthen” The result of this judgment is mixed. Projects in the track are still continuously advancing product launches, and the X402 technical standard ecosystem, which aims to bridge the gap between cryptocurrencies and AI, is steadily expanding, and fundraising activities are continuing. However, the prices of related tokens have consistently failed to achieve a sustained upward trend.

5. “NFTs are completely dead”

These conclusions are easy to summarize. The truly valuable insights lie in the following five core trends.

I. Spot ETFs are Bitcoin's "bottoming-out" tool, not its "ceiling".

Data shows that early long-term Bitcoin holders sold approximately 1.4 million Bitcoins in March 2024 alone, with a total value of $121.17 billion (Source: WuBlockchain).

Imagine the bloodbath in the cryptocurrency market without the support of spot ETFs: even with the continued decline in Bitcoin prices, the net inflow of funds into spot ETFs still reached $26.9 billion.

This nearly $95 billion supply-demand gap is the fundamental reason why Bitcoin has underperformed almost all other major asset classes.

This isn't a problem with Bitcoin itself; in fact, I believe we don't need to delve into unemployment rates, manufacturing data, or other selective indicators to explain this phenomenon. The essence of it all is a "major rotation" driven by whales and four-year cycle believers. More noteworthy is the significant divergence in Bitcoin's correlation with traditional risk assets like the Nasdaq. The correlation coefficient is currently -0.42, the lowest level since 2022. We initially expected this correlation to break upwards, but in the long run, low correlation is a major positive for Bitcoin—because institutional investors are urgently seeking investment targets that can hedge against traditional assets. In conclusion, the spot ETF successfully absorbed the selling pressure that would have dragged the market into a deep abyss. Even more encouragingly, there are signs that this selling pressure has ended: Based on this, I dare to give a 2026 target price for Bitcoin: $174,000. This price corresponds to a market capitalization of 10% of gold's market capitalization (calculated at $5,000 per ounce).

A year from now, you can use this prediction to tease me :)

II. Token Airdrops Are Not a Waste of Time

A familiar scene is playing out again: the crypto community is once again declaring "airdrops are dead." The same argument permeated the market in early 2025. But if airdrops were truly dead, how come I received a $46,000 Lighter token airdrop?

In 2025 alone, nearly $4.5 billion worth of mainstream project tokens were distributed via airdrops.

In 2025 alone, nearly $4.5 billion worth of mainstream project tokens were airdropped.

The following are the peak valuations of the airdropped tokens for each project: Story Protocol (token IP): Approximately $1.4 billion Berachain (token BERA): Approximately $1.17 billion Jupiter (token JUP): Approximately $791 million during "Jupiter Month" Animecoin (token ANIME): Approximately $711 million Linea (token LINEA): Approximately $437 million The market has indeed changed somewhat: user enthusiasm for points-based tasks has waned, Sybil attack detection technology has become more sophisticated (which explains the negative sentiment surrounding airdrops on social platform X), and project valuations have also declined. Furthermore, to maximize returns, you must sell all tokens after the airdrop. A widely accepted investment truth in 2025—that many projects actually had higher investment value before TGE—was also proven correct. Looking ahead, 2026 will be a big year for airdrops. Many leading projects are gearing up for token generation events, including: Polymarket, Kalshi (possibly), MetaMask, MetaETH, Tempo, Base (questionable), and several perpetual contract decentralized exchanges. In the new year, you still need to actively participate in various interactive tasks, but you absolutely cannot blindly bet or wait for opportunities. Airdrop arbitrage requires focusing resources and betting on truly leading projects. III. Fee Switches Are Not the "Engine" for Token Price Increases, But Rather the "Price Floor" I made a bold, counter-consensus prediction at the time: turning on the fee switch will not automatically drive up the token price. In fact, the revenue generated by most protocols is simply insufficient to significantly push up the token price—after all, the revenue-to-market ratio of the cryptocurrency industry is ridiculously low. As I wrote at the time: "I believe the role of the fee switch is not to determine how high a token can rise, but to set a price floor for the token. If the protocol's revenue sharing mechanism is implemented and can generate substantial revenue, then the token will have extremely high allocation value within a certain price range." Looking at the top-ranked projects in "Token Holder Revenue" compiled by DeFillama, the conclusion is clear: except for $HYPE, all tokens with high revenue sharing outperformed Ethereum. Admittedly, comparing these tokens with Ethereum seems unfair. However, for most DeFi investors, Ethereum is the benchmark for measuring the performance of all altcoins. The performance of $UNI was particularly surprising. Uniswap finally turned on transaction fees after many years. Following the announcement, $UNI surged by about 75%, but subsequently gave back all its gains, ultimately achieving the same annual performance as other decentralized finance tokens. To be fair, comparing these high-revenue tokens with my subjectively selected low-yield tokens reveals that high-revenue tokens are indeed more resilient to market downturns.

We can extract three core insights from this:

1. The role of the token buyback mechanism is to support the price floor, not to push up the price ceiling.

2. All market movements during this period present trading opportunities; the dramatic rise and fall of $UNI before and after the announcement of the fee switch is the best proof.

3. Buybacks are only one side of the coin; the selling pressure of tokens also needs to be considered. Currently, the circulating supply of most tokens is still relatively small, and there will be continuous unlocking and selling pressure in the coming years.

4. Buybacks are only one side of the coin; the selling pressure of tokens also needs to be taken into account. Currently, the circulating supply of most tokens is still relatively small, and there will be continuous unlocking and selling pressure in the coming years.

IV. Stablecoins Dominate the Market, but Profitable Arbitrage Transactions Are Rare

Last December, while traveling in Bali, I was asked to pay with stablecoins for the first time in my life.

The motorcycle rental company gave me his son's Tron wallet address and asked me to pay in USDT.

USDT on Tron?!

You should know that I can't even legally trade USDT in the EU. This fully illustrates how difficult it is to shake the advantage of market pioneers, and it is precisely this advantage that keeps USDT's position stable.

Nevertheless, my previous judgment that "USDT's market share will decline" was correct: its market share has dropped from 67% to 60%. Considering USDT's asset allocation structure, I believe the risk of holding it outweighs the return.

Although its market share has declined, USDT's market capitalization continues to grow.

In fact, Citibank predicts that by 2030, the total market capitalization of stablecoins will grow from the current approximately $280 billion to $1.9 trillion in the baseline scenario, and even reach $4 trillion in a bull market scenario. [Image source: Citibank] By 2025, the narrative focus of stablecoins has shifted from "transaction tools" to "payment infrastructure," beginning to challenge traditional finance. However, what makes me uneasy about my Ethereum assets is that numerous projects, such as Tempo, Stable (a scam project), and Plasma, are all positioning themselves in the stablecoin payment arena. However, arbitrage trading based on the stablecoin narrative is not easy to execute. For example, Circle's initial public offering (IPO) was exceptionally popular initially, but ultimately gave back all its gains. The arbitrage targets related to stablecoins, Stable (a scam project) and Plasma, have also performed poorly so far. In short, the core conclusion of the 2025 stablecoin narrative is the same as other sectors: all market movements are merely trading opportunities. I bet you'll almost never pay directly with stablecoins… unless you use a cryptocurrency debit card. The surge in popularity of cryptocurrency debit cards is partly due to their ability to help users bypass banks' stringent anti-money laundering checks, enabling convenient tax avoidance. Ultimately, this trend will greatly benefit the blockchain space – because every cryptocurrency debit card transaction generates a transaction on the chain. I've always dreamed of a dominant cryptocurrency debit card that completely bypasses Visa and Mastercard's clearing networks, enabling direct peer-to-peer payments. This is undoubtedly a potential opportunity for massive returns in the cryptocurrency space. Projects like Payy, Kast, and Holyheld are all working towards this goal. In 2026, their token generation events may bring surprises.

V. DeFi is More Centralized than CeFi

This disruptive viewpoint was proposed by "DeFi Made Here" (the Fluid team), and its importance even exceeded my expectations. It needs to be clarified that the "centralization" mentioned here is unrelated to the decentralized nature of blockchain or asset self-custody.

As the team stated: "Only a very small number of protocols account for the vast majority of the total value locked (TVL); risk assessment agencies are few and far between, yet they simultaneously serve multiple competing projects, indicating a clear conflict of interest; such phenomena are ubiquitous."

The specific implications they want to express are as follows:

• JPMorgan Chase's market share in the US is approximately 12%, while Aave's share in the decentralized lending field is as high as 50%-70%.

  Behind the Ethereum Layer 2 network lies a multi-signature wallet worth billions of dollars yet operating without regulation. Tether itself is a multi-signature wallet controlling hundreds of billions of dollars. Chainlink, an on-chain data service provider, virtually monopolizes all value transfers in the decentralized finance (DeFi) sector. The same risk assessment team receives salaries from different protocols, creating an obvious conflict of interest. These are just a few examples. (Note: Although the total value locked in the entire decentralized lending sector has increased, Aave's market share has remained stable at 63%.) In fact, CeFi has a higher concentration of business and total value locked in the DeFi sector. As the USDC decoupling crisis revealed, over-reliance on a few institutions could be fatal to decentralized finance. In the year since this viewpoint was proposed, another centralized problem has emerged in the DeFi space: the conflict between centralized equity holders and token holders/Decentralized Autonomous Organizations (DAOs) has begun to erupt. Who is the true owner of the protocol? Who owns the intellectual property? Who controls the revenue stream generated by the protocol? The infighting within the Aave community shows that token holders have far less power than we imagine. As a voting representative for several DAOs, including Aave, I inevitably have a subjective bias on this topic. I firmly believe that all protocol-related revenue (including front-end fees) should be distributed to token holders. However, those centralized equity holders with a "laboratory" background are unwilling to relinquish control. This is understandable. But if equity holders ultimately prevail, the investment value of many DAO tokens will be significantly reduced. Fortunately, Uniswap has set a positive precedent through its "proposal for protocol integration" (token burning, equity and token rights alignment). Now, it remains to be seen whether Aave can keep up. 2026 will be a crucial year for aligning the interests of equity holders and token holders. Final Conclusion: The market in 2025 proved only one thing: all market movements were merely trading opportunities, and exit windows were fleeting. The market has lost its unwavering faith in any token. This situation has also led to three consequences: 2025 marks the demise of the HODL culture; DeFi has transformed into purely "on-chain finance"; and with the improvement of the regulatory environment, decentralized autonomous organizations have shed their "pseudo-decentralized" disguise.