Is the encryption industry in another downturn? How should we face it?

The entire encryption circle is currently facing a downturn similar to that of 2018 or 2022, not only due to price issues but also because of people's doubts and hesitations about this industry.

Written by: Blockchain Knight

Recently browsing various social media, I have seen quite a few criticisms or ridicule regarding the current state of the encryption industry, among which are some individuals who have gained "fame and fortune" in this industry. The author will refrain from commenting on right or wrong.

However, from the perspective of a practitioner, there is no need to stand on a high point and criticize like a saint just because the industry is currently in another low period. Perhaps they have forgotten that if it were not for the existence and development of this industry, they would not have today's achievements. The saying "do not forget your original intention" roughly expresses this meaning.

Through these jests, I would like to talk with everyone about the challenges and opportunities currently facing the encryption industry.

Of course, before that we have to acknowledge a reality: the entire encryption circle is currently facing a downturn similar to that of 2018 or 2022, not only due to price issues but also because of people's doubts and hesitations about this industry.

If the past two years were years of hope, then now most people have sneered at this hope, largely because the long-anticipated "altcoin season" has not arrived, and the industry seems to have not solidified any new narratives in the past two years, or some new narratives have become collateral damage, so the combination of both has become a heavy burden on the participants.

But what truly undermines the industry may not come from within the industry itself, but rather an external factor—the rapid development of AI in recent years has captured the attention of most investors, and the encryption industry is no exception. Over the past year, I have learned that many practitioners have shifted to the AI field, especially developers, and this has become the last straw that broke the camel's back.

As of today, when the shadow of imitation projects has disappeared, when commentary of "no new narratives at all" has emerged, and when AI is frantically seizing the market, all that is left for the encryption circle is the sighs of practitioners.

By the way, there is also the recently booming "coin stock" track, which has directly and legitimately seized the last bit of liquidity.

So, faced with the convergence of these subjective or objective problems into a river, what lies before the encryption circle is yet another period of downturn. However, as the saying goes, without a trough, how can there be a peak? So where are the opportunities in this industry now or in the future?

First of all, regarding the altcoin season, we won't predict whether there will be another crazy altcoin season like in 2017 or 2021. However, if we only look at prices and multiples, there have still been quite a few wealth creation myths in the past 2 years.

It's just that it is no longer a "full-scale assault" with a flood of liquidity, but rather a dance of certain sectors or parts. However, it still lives up to the expectations of participants with certain insights, so this trend is very likely to continue, requiring us to adjust our mindset and expectations.

Analogous to the internet era, when Amazon's stock price fell by 90% during the burst of the internet bubble, it then increased by over 600 times in the following 20 years, which is more than 40 times its peak at that time. Therefore, finding the Amazon of the encryption industry has become a new opportunity for the sector.

Secondly, regarding the new narrative, let's take a look at the recently popular stablecoins. Whether in the West or the East, everyone is talking about them. Recently, at the Lujiazui Forum in Shanghai, the central bank governor Pan Gongsheng mentioned stablecoins for the first time, which is quite revealing. Meanwhile, over the weekend, Xinhua News also rarely published an article introducing stablecoins.

If we say that stablecoins are just a small application in the industry, then we underestimate their influence. The author believes that their successful breakout is comparable to the launch of Alipay back in the day, which solved the problem of online payment security, leading to the subsequent development of e-commerce and various online transaction activities. Perhaps looking back in 10 years, we will realize that the change happened in that very year.

At the same time, the prosperity of stablecoins will greatly expand the user base of the encryption circle and truly open up the market, which will bring the new users that everyone has been eagerly anticipating and usher in the industry's "iPhone moment." However, it is still in its early stages and may require 1-2 years of accumulation.

Finally, regarding AI, I have felt for many years that blockchain is not entirely a technology designed to serve humans; to a large extent, it will be a native tool for AI, solving information transmission between machines and real interaction between machines and people. Currently, it seems that this direction is being validated.

With the development of Agents, ensuring secure and reliable communication between machines that can be verified by humans seems to be possible only through the use of blockchain, unless we wish for future Agents to be uncontrollable and detached from reality.

Currently, this direction is still very early for blockchain. Of course, the combination of Agent and blockchain mentioned here is not the kind that was hyped up in January this year; most of it was just speculation, so don't take it seriously.

Therefore, when some changes have already occurred or are quietly approaching, what we can do is not resist, but rather accept with pleasure and go with the flow.

However, the author believes that insults are not a form of compliance, but an unacceptable struggle. After expressing our emotions, we still need to move forward, because reason will always triumph over sentiment, and the encryption industry will not remain in a downturn forever. Why not rise up against the wind once again?