Chapter 75 of Water Margin: "Song Gongming's loyalty moved the master, and the general Su received the imperial edict to recruit him." The outlaws who were once forced to Liangshan surrendered to the court under the impetus of various forces. How similar, in 2008, the information published on the first block of Bitcoin Genesis was the second aid from the British Chancellor of the Exchequer to Europe, and the words were full of Satoshi Nakamoto's criticism of the existing financial system. Now, this former Liangshan hero has also surrendered to the court and willingly become a new tool of the old capital. With the successful breakthrough of the stablecoin bill, Circle and Tron have successively hit Nasdaq, and the discussion of US stocks and cryptocurrencies on the entire network has reached its peak. This article will systematically sort out the logical line of cryptocurrency moving towards traditional finance. At the same time, in order to add a little fun, I, a hardcore investment research blogger, will also rarely mix some of my own stories in the article.
"Life is full of regrets and joys, how can I love a smile worth a thousand gold? I hold wine for you to toast the setting sun, and let the evening glow shine among the flowers." It's not easy to type, please like, comment and forward it🫶🫶🥲
I came into contact with Bitcoin when I was 15 years old. I was inspired by Satoshi Nakamoto's spirit of changing the world and devoted myself to this industry. Now Bitcoin has transformed from a grassroots to a temple. I wonder what Satoshi Nakamoto's spirit would sigh if he saw this scene in the world? On second thought, I also changed from a young man full of vigor and vitality to a miserable blogger who writes long articles saying that the weather is cool in autumn. Hahahaha, it is true that everything is determined by fate and cannot be controlled by humans.
We still have to be optimistic. Without further ado, let’s get started.
1. Overview of Crypto and US Stocks
In order to give you a big picture, the first chapter will briefly sort out the crypto and US stock varieties that are linked to each other, including the attempts of traditional financial services and cryptocurrency exchanges to enter each other's markets. Let's feel this inseparable situation together.
"You are so powerful that you cannot let others come freely, and it is hard to stop the soaring dragon and the soaring phoenix. The flowers in the hall intoxicate three thousand guests, and the frost of the sword chills fourteen states."
1. Overview of coin stocks: I summarized it myself. There are three types of cryptocurrencies in the US stocks. Some of them are subdivided into coin stocks and mining stocks, but these details are unnecessary. We call them coin stocks here, which is also a common name in the market. The three types of coin stocks are:
Cryptocurrency mining businesses: MARA Holdings (MARA), Riot Platforms (RIOT), Hut 8 Mining (HUT)
Cryptocurrency comprehensive financial services business: Circle (CRCL) USD stablecoin, Coinbase Global (COIN) exchange, Galaxy Digital (GLXY) comprehensive financial and technology services.
Coin hoarding business: MicroStrategy (MSTR) hoards Bitcoin, Metaplanet Inc. (3350.T) Japan hoards Bitcoin, Sol Strategies (HODL) Canada-listed hoards Sol. At the same time, this sector also has some broad inclusions, for example, many traditional listed companies will put cryptocurrencies into their balance sheets, classic examples include Tesla (TSLA) and Trump Media Technology Group (DJT).
2. Blue-chip cryptocurrencies: I call the currencies that are recognized by the main funds blue-chip cryptocurrencies. There are many evaluation dimensions, such as those that enter the coin base coin50 index or issue ETFs, which are all large currencies. There is a very detailed chart below. The picture is a few months ago and may have been updated.
At the same time, I have also listed some ETF code names, so those who want to invest in stocks can go and invest.
Bitcoin: ProShares Bitcoin Strategy ETF (BITO), iShares Bitcoin Trust ETF (IBIT)
Ethereum ETFs: Grayscale Ethereum Trust (ETHE), Bitwise Ethereum ETF
Solana: On June 13, seven major asset management companies (such as VanEck and 21Shares) submitted revised S-1 documents in response to the SEC's request for redemption and pledge. Bloomberg analysts estimate the probability of approval in 2025 to be 90%, and some reports predict that it may be approved in July.
3. From the perspective of cryptocurrencies tradfi: There are currently two relatively mature businesses in the cryptocurrency circle that are moving closer to traditional finance.
Payment. The payment track is the only cryptocurrency project with practical application value. No offense, but there is not much difference between running in Nike shoes and running in shoes that can mine. Payment is different. Using cryptocurrency for cross-border payment is indeed superior to traditional channels. At the same time, some toC project parties, such as @0xinfini, which has been very popular recently, have indeed solved the problem that people in the cryptocurrency circle have difficulty in withdrawing money and that cryptocurrency consumption can only be spent in the cryptocurrency circle, so it is a market with demand. This track has a great combination with traditional finance, first of all, in terms of supervision, and secondly, in cooperation with large banks, and traditional payment service providers such as visa master.
Some RWAs. Most RWAs are scams, but some are relatively mature products that are closely linked to traditional finance. For example, @Bybit_ZH provides services for trading commodities and US stocks, @binancezh provides services for trading gold tokens, etc. These trading products are all based on the original ecology of encryption and are attempts to connect with the traditional capital market.
4. Cryptocurrency from the perspective of tradfi: Crypto is a very dynamic business for those old fashion investors, like Warren. Currently, there are two main types of investors that start from traditional finance and expand their business into cryptocurrency:
Traditional brokerage firms open crypto trading: These are mainly several compliant traditional brokerage firms in Hong Kong. After obtaining the cryptocurrency trading license, they can allow users to directly use cryptocurrency trading to trade on their platforms, such as Futu. At the same time, in a broad sense, we can also include some ETF providers, who all provide traditional asset class investors with channels to invest in "alternative assets." (Yes, cryptocurrencies are still considered alternative assets in large funds, on the same level as antiques and calligraphy and paintings)
Hedge and venture capital: For more professional investors, hedge funds have already begun to deploy cryptocurrencies. For example, I interned at a compliant hedge fund in Hong Kong in the summer of 2024. Some family offices and large companies will appropriately allocate crypto assets to optimize their portfolios. As of June 17, 2025, there are 18 listed companies holding Bitcoin, 5 holding Ethereum, and 2 holding Solana.
The first paragraph was written by hand after searching for information one by one, and it took me a whole morning. If you have read it all, you will definitely sigh that you did not expect that these two industries are so closely connected. But do you remember that when blockchain was first born, a group of geeks clamored to overthrow traditional finance. How did the dragon-slaying boy suddenly become a dragon? Before entering this question, let us first tell an interesting story, the history of the Internet.
2. The Tragedy of the Internet
"If life could always be like the first time we met, why would the autumn wind make the painted fan sad? People's hearts change easily, yet they say that people's hearts change easily."
⌨️The Internet was originally built by a group of technology geeks and pioneers who wanted to create a decentralized, open platform to oppose capitalist monopoly. These "hackers" believed in the "hacker ethic", emphasizing information freedom, opposing authority and decentralization. For example, Richard Stallman founded the free software movement, advocating software sharing and opposing the control of proprietary software. (This is the reason why Microsoft was attacked by so many hackers later)
The first generation of the Internet was mainly used by academic institutions and government departments, following the principles of openness and sharing. Even in 1989, when the famous Tim Berners-Lee invented the World Wide Web (the www on our website), his design principles were still based on open standards and no copyright restrictions, aiming to promote the free flow of information.
Do you think it is very similar to the style of the cryptocurrency world from 2008 to 2016, and the cypherpunk spirit that Ethereum continues to this day? The concept of Cypherpunk was created by Jude Milhon, who is an Internet scholar. Her article (Cypherpunk Manifesto) points out that privacy is the cornerstone of freedom and the Internet should be a tool to resist surveillance.
It’s incredible, right? Now the Internet, which is used to eavesdrop on privacy, abuse data, create information cocoons, and randomly block people’s accounts, once aimed to become a tool to resist surveillance.
🖥️The transformation of the Internet from an idealistic platform to a capital tool began with the commercialization wave in the 1990s. In the 1990s, policy changes such as the privatization of NSFNET in 1995 and technological advances such as the introduction of HTTPS enabled e-commerce to flourish. Market demand grew, attracting venture capital and startups, and the Internet changed from an academic tool to a commercial platform.
WWW was invented in 1989, and the Internet bubble began in 1995. The dot-com bubble occurred between 1995 and 2001. As Netscape IPO triggered a boom, the popularity of browsers promoted e-commerce, and Internet company stock prices soared. Why is it called the dot-com bubble? Because in those days, as long as your listed company added ".com" to its name, the company's valuation would soar, and the market dream rate was extremely high. .com became a buzz word, and the entire market was intoxicated by the dream of low interest rates and the new economy.
But all good things must come to an end. In March 2000, the Federal Reserve raised interest rates, U.S. stocks fell in valuation, the Nasdaq index plummeted 78%, and many Internet companies went bankrupt.
Let me make a comparison for you. The Internet bubble crisis was even more destructive than the 2008 financial crisis.
The major impact of this stage on the Internet was that the structure of participants had undergone a fundamental change, from the ivory tower to the underworld. Speculators, fraudsters, and corrupt employees had their feast. Afterwards, the Sarbanes-Oxley Act of 2002 strengthened the supervision of financial reports of listed companies to prevent fraud. At the same time, the SEC launched an investigation into the misconduct of investment banks (such as Goldman Sachs) in IPOs. This series of performative measures only proved the barbarity of the Internet expansion period and was of little practical use.
Do you think it is very similar to the bull market in 2017? Blockchain technology has gone from the halls of idealism to the arena, with various CX pushes, bubble business models, and simple and crude Ponzi schemes. But that was also the time when liquidity was the most abundant, and it was the golden age in the eyes of countless old coin circles.
💻2009-Today, the Internet has completed its transformation from the underworld to the temple. BlackRock, Vanguard, State Street, Fidelity, the above four together hold more than 20% of the shares of the 7 giants. Smaller Internet companies may even be held by a single institution with a 30% stake. Large technology companies such as Google, Facebook and Amazon have formed a monopoly by controlling infrastructure and data. Advertising and data collection have become the main profit models, and privacy and network neutrality, the once sacred doctrine, have long been thrown into the dust by later generations.
The Internet's total monopoly of data and total invasion of user privacy began with Google, and then other Internet giants discovered such a sweet business and followed suit. There is a movie called "Surveillance Capitalism", which does not ask you to monitor capitalism. Surveillance is an adjective that modifies capitalism. The movie describes in great detail how Internet giants step by step pua the masses, exchange political resources, and rise to the top of the power tower.
After 40 years of development, the Internet has successfully connected to capital, which to some extent can be regarded as marrying into a wealthy family. Without the initial support of these investment institutions and the subsequent hype of large funds, the Internet business model itself would not have been able to be successfully popularized on a large scale.
After talking about capital, what about power? Needless to say, countless examples from China and abroad can pop up in everyone's mind. Whether through the temptation of power or the threat of power, Internet giants have long been involved in political resources. If you don't believe it, you can criticize the leaders on Green Bubble, or criticize the Ma Group on Twitter, and then you can verify the statement that the Internet succumbs to power.
Back to the cryptocurrency world, do you think it is similar to the development from 2020 to now? Institutions have entered the market, and countless project parties have set their ultimate goal to join traditional finance, such as going public. It is ironic to think about it. Wasn’t the reason for the invention of ICO to revolutionize IPO? While you admire Sun Ge’s ceiling operation, have you ever thought about why the once unruly Internet and the unruly cryptocurrency world could not escape the fate of being recruited?
Now let’s move on to the key part of this article: The Death of Geeks: Why Cryptocurrency Will Eventually Submit to the Imperial Court
3. Death of a Geek
I will graduate from high school in the summer of 2023. At that time, RWA will be a very hot topic of discussion. Since November 2023, I have firmly believed that the future of the cryptocurrency industry will be integrated with traditional finance. So I went to a compliant crypto hedge fund in Hong Kong for an internship in the summer of my freshman year. The purpose was to get more exposure to traditional financial business. My friends in @0xUClub also know that Dave can be said to be an alternative cryptocurrency rebel who actually wants to surrender to traditional finance. Now that the time has come, King of Understanding and Sun Ge have entered the mainstream with cryptocurrency, and I still feel a little emotional.
"Qin Wang looked up the mountain, watching the chaotic clouds and heavy rain, turning the river upside down. He wondered if the clouds were the rain, or if the rain was the clouds? The vast sky was changed and destroyed in an instant by the west wind. Looking back, he listened to the bright moon and the sound of the sky, and the cry of all the people in the world."
3.1 The real mass adoption: The Godfather’s business
In The Godfather 2, the young godfather Vito Corleone confronts the local gangster leader Fanucci in Little Italy, New York in 1910. Fanucci says to Vito: "Young man, you gotta pay for protection for your business, or there’ll be trouble."
A hundred years later, the bigwigs at the SEC probably said the same thing about @cz_binance.
I have been talking about mass adoption for a long time, from the time I finished my college entrance exam to now. Why haven’t any real application-level products been developed? Why hasn’t the cryptocurrency industry had its own iPhone moment? What factors are needed for true mass adoption?
This question is a topic worth discussing. Here I will only talk about it from one perspective, business confrontation: the Godfather's business. The principle of the mafia is that if you want to do business on my territory, you have to give me some benefits. This sentence is completely applicable to discussing the mainstreaming of cryptocurrency from the perspective of business confrontation. Why is blockchain so exciting? Because it brings not only changes in business models, but also changes in distribution structure. For example, pump.fun, everyone can participate in asset games without any threshold, which is intolerable for those institutions that monopolize asset rules, such as large investment banks. Various Dapps that return data privacy rights to users can almost cut off the financial path of many Internet giants.
If you want to do business in my territory, you have to give me some benefits. If you don't share the profits, then the big institutions that control the resources of mainstream society will not allow you to do business in their business areas.
Capital has two ways of dealing with this new thing.
The first is suppression, such as the UK Red Flag Act, which requires each vehicle to be equipped with at least three people - two people operating the vehicle and one person walking 60 yards (about 55 meters) ahead to guide, waving red flags (during the day) or holding lanterns (at night) to warn pedestrians and other vehicles. This thing protects the interests of traditional horse-drawn carriages and railways, and is a victory for industrial lobbying groups. There is also Hong Kong's current taxi protection law, which regards online ride-hailing as illegal operation in order to protect the stupid taxi drivers who are outdated, have poor service attitudes, and deliberately take detours. The core of the first method is to eliminate the enemy, and it will indeed eliminate a group of innovations that lack vitality.
The second method is assimilation. For example, investment institutions bought Microsoft shares, financiers such as Soros participated in political donations, and the arrogant Jack Ma was expelled from Alibaba and semi-taken over by state-owned assets. The core of the second method is to turn the enemy into a subject. Whether it is coercion or inducement, you must listen to my opinions on your future development.
Back to cryptocurrencies, the initial approach of mainstream capital to cryptocurrencies was to suppress them. The actions of the Chinese government were the most famous, including seven ministries and commissions, nine ministries and commissions, and ten ministries and commissions. But later, mainstream capital found that this thing was too strong and there was no way to eliminate it, so their strategy changed to assimilation: BlackRock took the lead in ETFs, and now IBIT's daily trading volume has exceeded Binance, and the pricing power is completely in the hands of traditional investment institutions. Trump held a crypto roundtable and called together the cryptocurrency leaders who occupied the mountain to hold a meeting to recruit them. Using money and power to attack, this trick is too effective.
Back to the Godfather, this method is actually very common in the underworld, either to eliminate the enemy or to turn the enemy into a loyal younger brother. The following picture is the view of the CEOs of the Big Eight Banks (BB) on cryptocurrency that I summarized last year. At that time, there was no money to charge, so I could only post it in sections. I intercepted some of them, which also proves that I did start paying attention to the track of combining traditional finance very early. Welcome everyone to take a look.
https://x.com/0xdave852/status/1816409472899920370?s=46
3.2 Liquidity support: a bigger driving force.
Why is it so difficult to do secondary trading this time? It is getting harder and harder for copycats to rise? The fundamental reason is that marginal liquidity has not improved. In other words, with the global money supply unchanged, the stock of funds has been exhausted, and the valve of incremental funds cannot be opened. Including the fierce competition among exchanges to attract customers and the frantic new users of major projects, the causes behind these superficial symptoms are all because of the shortage of stock funds and the lack of incremental funds.
The cryptocurrency market has no liquidity. Without liquidity, it cannot support such a high market value. More precisely, people have no way to exit. However, compared with traditional financial assets, the size of the cryptocurrency market is insignificant, so if it can access institutional funds, sufficient liquidity can support the current bubble of many tokens. In addition, the participation of investors from the traditional world will also provide huge incremental funds for cryptocurrencies. This is the logic of the super bull market.
3.3 Glory Submits to Me: The End of the Upstarts
If a person or a group earns a huge amount of wealth, then they must also earn the corresponding political resources and social status. Otherwise, there will be a huge mismatch between money, a free-flowing resource, and influence, a class-enclosed resource. Mismatch often leads to crises, such as the late Qing government. Ancient China was very rich, but they had neither international political resources nor international status, and their own military strength was still very poor, so they could only become fat meat that could be slaughtered at will.
This logic is fully used in the cryptocurrency industry. When I saw CZ, a leader who may be 10 times richer than the chairman of Goldman Sachs, was fined 4 billion US dollars and was thrown into prison, I realized very clearly that the cryptocurrency circle would fully exchange political resources. For example, SBF of FTX was the second largest individual donor to Biden's campaign in 2020, second only to Bloomberg. The crypto lobby in the United States, led by Coinbase CEO and Microstratagy CEO, is also quite active. This activity has a professional term called power rent-seeking, which refers to individuals or organizations obtaining economic benefits or privileges by exploiting political power, administrative resources or institutional loopholes, rather than creating wealth through productive activities. Don't look down on this operation. In fact, most of the time, underground operations are the main driving force of things.
Conversely, those in power also need money. This is a two-way trade. Sun Ge’s operation since Trump took office is a textbook practice.
4. Old story? New era?: The future of the cryptocurrency world
I remember that in mid-2024, it was actually a bearish time. At least everyone was tortured and suffered a lot, so we began to discuss the future direction of the industry. There were three mainstream arguments at the time. The first was decentralized computers, represented by the value faction of Ethereum. The second was crypto casinos, represented by financial nihilism represented by local dogs (at that time, many local dogs were even on Ethereum. The third was the compliance faction, which believed that the currency circle would definitely accept amnesty in the future. This type of voice was a relatively niche voice at the time.
In fact, going back to that time point, if I put myself in their shoes, I really had no idea. My attitude at that time was, just like saving China from the Qing Dynasty, different revolutionaries proposed different policies. At that time, everyone really didn't know which method could save China. No problem, just give it a try. I believed that traditional finance would definitely intervene. It didn't matter if I was wrong, because what if it succeeded?
So looking at the future from now, where will cryptocurrency go? I think @yuyue_chris said it very well, let God's things be God's, let the grass be the grass. We can classify it like this. For new players in the cryptocurrency circle who are accumulating original capital, on-chain, crypto-native, and fairer games will become the mainstream. For old players in the cryptocurrency circle who have already achieved success, compliant, safe, and large-capacity games will become the mainstream. So we may see two polarizations, native web3 will become more native, and mature web3 will become more mature and move towards the mainstream.
"I would rather die among wine and women than bow before carriages and horses."
A few days ago, I saw a post by my dear Weituo teacher @thecryptoskanda, which was about the Indian plane crash. He commented on a related Dogecoin, and was criticized by the righteous beauty @yuxin_pig. Weituo teacher is the king of the plate, and Yuxin teacher is a firm builder of Ethereum value. They are both really good mentors and friends for me, but I am quite happy to see them quarreling. This kind of value collision is the currency circle I like. The future currency circle will continue to grow in differences.
Finally, let me share some of my own lessons.
5. After painful reflection, bonus or illusion?
"Don't wait, your youth will be gone and you will be filled with regret"
Since last fall, two trends have developed particularly well. The first is the financial nihilism crypto casino, and the second is the compliance faction going mainstream. I did foresee early that crypto would move closer to the mainstream in the future, but I underestimated a fatal point, that is, this opportunity is almost impossible for ordinary people to participate. I used to think that if I slowly move in this direction, there would be a lot of arbitrage space between traditional institutions and crypto assets, but I did not expect that the speed of crypto integration would be so fast, nor did I expect that it would be so difficult to participate in the top-level design. So last November. My friends who were devoted to playing with local dogs and chains became rich one by one, while I was still struggling to study the business, which was really painful.
During this period, many crypto companies have been trying to go public, and a large number of traditional institutions have also stepped in to take over the funds. Everyone in the circle of friends is very excited, but after seeing the example I just gave, we have to think about one thing: is this feast a bonus or an illusion?
Infini's shutdown of the C card event caused a lot of discussion. Wu said he posted a post
As far as the current personal wealth growth is concerned, there are few dividends on the business side, and there are still some opportunities on the asset side. As a sober participant, we must realize that although the cryptocurrency industry is still in its early stages, some sectors are already quite saturated, and we should always look for sectors that are growing exponentially. How to operate specifically can only be accumulated through a large amount of actual combat experience. The most important takeaway is to reflect, not be carried away by the mainstream voice, and think calmly about how to seize the few dividend periods in the next step.
Conclusion: From the perspective of the currency circle, the entire history of cryptocurrency development seems to be a Water Margin story from "being forced to Liangshan" to "recruiting the emperor". Behind this contrast and irony, there may be the obscure laws of the human world. An interesting historical observation is that God has the virtue of loving life, and history often develops in a more neutral direction. Integration and compromise are the norm, and fighting and revolution are the minority.
I have written so many words without realizing it. I have talked about both the real and the mysterious. In the end, let me summarize. The first part gives some relatively practical overviews of investment targets. The second part tells some interesting stories. The third part starts with my favorite logical reasoning.
"The Yangtze River rolls eastward, its waves wash away all heroes. Success and failure are all in vain. The green mountains remain, the sunsets are red. The white-haired fisherman and woodcutter are on the river bank, accustomed to watching the autumn moon and spring breeze. A pot of muddy wine brings joy to our reunion. So many things in the past and present, all turned into jokes."
