1. Long-term value support in the cryptocurrency space
The narrative of Bitcoin as 'digital gold': As an anti-inflation, decentralized asset, BTC is still viewed by some institutions and individuals as a hedge against fiat currency devaluation (especially in countries with high inflation). a. The fourth halving (April 2024) has been completed, and the long-term supply contraction logic remains. b. Spot ETFs approved (in the US, Hong Kong, etc.) provide compliant entry points for traditional funds.
Ethereum and the smart contract ecosystem: Innovations in DeFi, NFTs, Layer 2, etc., continue; although the short-term bubble has burst, the infrastructure is still evolving (such as account abstraction, zero-knowledge proofs).
Practical application attempts: Stablecoins (USDT, USDC) have become tools for cross-border payments, and concepts like RWA (tokenization of real-world assets) are being explored. Conclusion: The underlying technology and social demand (such as decentralized finance, censorship-resistant transactions) for cryptocurrencies still exist, and the market will not completely disappear.
2. Challenges currently faced
Increased regulatory pressure: The U.S. SEC continues to crack down on unregistered securities (e.g., suing Coinbase, Binance), with some projects forced to delist or pay hefty fines. - Global compliance frameworks like the EU's MiCA regulation are gradually taking shape, potentially eliminating non-compliant projects.
Market maturation and retreat of speculation: - Early 'quick wealth' opportunities are diminishing, with professional institutions dominating the market, making it harder for retail investors to profit. - Meme coins and low-quality projects still exist, but their lifecycles are shorter and they exploit retail investors faster.
Technical bottlenecks: - Blockchain performance (such as low TPS, high gas fees) and user experience (complex private key management) have not yet achieved widespread adoption.
3. Possible future directions
Optimistic scenario (sustained development): a. Institutionalization and mainstreaming: More traditional financial institutions are entering through ETFs and custodial services, driving market growth. b. Technological breakthroughs: Layer 2, modular blockchains, etc., enhance scalability and attract real users (not speculators). c. Emerging market drivers: Developing countries accelerate the adoption of cryptocurrencies due to currency devaluation, capital controls, and other needs.
Pessimistic scenario (recession or contraction): a. Regulatory crackdown: Major countries completely ban cryptocurrency trading (e.g., China's 2021 policy), leading to liquidity exhaustion. b. Systemic risks: Events like Tether (USDT) collapse or major exchange hacks trigger chain reactions of crash. c. Technological stagnation: No breakthrough applications, relegated to mere speculative tools, with public interest gradually waning.
4. How should ordinary investors respond?
Short-term (1-2 years): a. Focus on mainstream assets like Bitcoin and Ethereum, while avoiding high-risk altcoins. b. Stay alert to regulatory dynamics (such as policy changes after the U.S. elections).
Long-term (more than 5 years): a. Blockchain technology is still in its early stages; regular investments in BTC/ETH are possible but require enduring high volatility. b. Focus on projects that truly solve real-world problems (such as cross-border payments, privacy protection).
Bottom line principle: 'Not participating means no losses' - If you cannot bear the risk of total loss, staying away from the cryptocurrency space is the safest strategy.
The cryptocurrency space will not easily disappear, but it will undergo brutal survival of the fittest. Its future depends on: 1. Whether technology can break through existing bottlenecks; 2. Whether regulation can find a balance (to mitigate risks while promoting innovation); 3. Whether 'killer applications' (beyond speculation) will emerge.
For individuals, controlling risk, lowering expectations, and continuous learning is the way to survive.