AI siphoning, altcoin stagnation, capital flight: the crypto market is being squeezed by three forces.

Author: Blockchain Knight

Original Title: The Disillusionment of Shanzhai Season, AI Siphoning, and the Diversion of Coin-Stock, Cryptocurrency Breathes Under the "New Three Mountains"

Recently browsing various social media, I have seen quite a few comments criticizing or mocking the current state of the cryptocurrency industry, among which there are some who have gained "fame and fortune" in this industry. I 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 in another downturn. Perhaps they have forgotten that if it weren't for the existence and development of this industry, they wouldn't have today's achievements. The saying 'do not forget why you started' roughly expresses this idea.

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

Of course, before that, we must acknowledge a reality: the entire cryptocurrency space 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 the industry.

If the past two years were years of hope, then by now most people have scoffed at this hope, largely because the long-awaited "Altcoin Season" has not arrived, and the industry seems to have not solidified any new narratives over the past two years, or some new narratives have become collateral damage. Therefore, the combination of both has become a heavy burden on the participants.

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

As of today, with the disappearance of the clone season, the emergence of commentary that "there is no new narrative," and the rampant takeover of the market by AI, all that is left for the crypto circle is the sighs of practitioners.

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

So, in the face of these subjective or objective problems converging into a river, what lies before the crypto circle is another low period. However, as the saying goes, without a low, how can there be a peak? So where are the opportunities for this industry now or in the future?

First, regarding the altcoin season issue, let's not predict whether there will be another crazy altcoin season like in 2017 or 2021, but 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's no longer a "full-scale attack" with a flood of resources, but rather the dance of certain parts or segments. However, it still lives up to the expectations of participants with certain insights, so this trend is likely to continue, requiring us to adjust our mindset and expectations.

Analogous to the internet era, when Amazon's stock price plummeted by 90% during the internet bubble burst, it subsequently rose more than 600 times over the following 20 years, which is more than 40 times its peak at that time. Thus, finding the Amazon of the crypto industry has become a new opportunity for the industry.

Secondly, regarding the new narrative, let's take a look at the recently popular stablecoins, which are being discussed by everyone, whether in the West or the East. Recently, at the Shanghai Lujiazui Forum, the central bank governor, Pan Gongsheng, mentioned stablecoins for the first time, which is telling. At the same time, over the weekend, Xinhua News also unusually published an article introducing stablecoins.

If stablecoins are merely a small application within the industry, then their impact is underestimated. I believe their success in breaking out is comparable to the launch of Alipay, which solved the online payment security issue, leading to the development of e-commerce and various online trading activities. Perhaps looking back 10 years from now, 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 cryptocurrency circle, truly opening up the market, which in turn can bring the long-awaited new users and welcome the industry's "iPhone moment." However, this is still just the beginning and may require 1-2 years of accumulation.

Finally, regarding AI, the author has long believed that blockchain is not a technology that is entirely meant to serve humans; to a large extent, it will be a native tool for AI, solving information transmission between machines and real interactions between machines and humans. Currently, this direction seems to be 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 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 Agent combined with Blockchain mentioned here is not the kind that was hyped up in January this year; most of it is just speculation, so don't take it seriously.

So, when some changes have already occurred or are quietly approaching, what we can do is not resist, but to gladly accept and follow the trend.

However, I believe that cursing is not a form of compliance, but an unacceptable struggle. After expressing our emotions, we still need to move forward, because rationality will always overcome emotion, and the crypto industry will not remain in a downturn forever. Why not face the wind once again?