"When the tide goes out, you can see who's swimming naked," Buffett's quote perfectly describes the current Crypto market. In recent times, we've frequently heard about various individuals "leaving the circle," and these messages have become more of an expression of the industry's current state rather than mere complaints.
As for why these people choose to leave the industry, I roughly tracked the main reasons.
First, most are leaving due to the dismal market conditions or changes brought by market fluctuations, forcing some to temporarily exit and seek "new opportunities". Secondly, Web3 has been in an unfavorable "unhealthy" growth phase over the past one or two years, causing some value creators to leave as they don't see genuine value growth. Additionally, some people have noticed the rise of AI and believe Web3 has become a thing of the past, seeking new blue ocean markets.
Of course, when these reasons are broken down to individual levels, differences are significant. However, these reasons cannot transform from partial to holistic, as most market participants still choose to wait and see or continue building, given that this decade-old industry has faced similar challenges before.
Some leaving the industry might be influential KOLs, which can seemingly affect many people's attitudes. However, I believe the current stage is truly testing Builders. Beyond surface-level restlessness, we need to see more about the industry's changes and unaltered aspects. I will briefly describe this from three perspectives.
Has the Web3 Industry Entered the Red Ocean?
According to a research report published by BTC financial services company River in March, currently only 4% of the global population holds BTC, with the United States having the highest proportion at about 14%. From a development perspective, the current BTC adoption rate is comparable to the internet in 1990 or mobile social media in 2005.
Through this simple data analysis, we can see that the digital asset adoption led by BTC is still in its early stages, far from being a saturated red ocean market. Even in terms of industry influence, traditional financial giants like BlackRock and Fidelity have just entered the market. Would they foolishly enter as bag holders?
From logical and data analysis, we must acknowledge that if digital assets are the future direction or Web3 is the intersection of the internet and AI, this race has likely just reached the midpoint from the starting line, with a long way to go.
Is the Web3 Market Left with Only Exaggerated MEME Narratives?
For many value creators in this industry, the most criticized aspect over the past year is naturally the MEME explosion. MEME attracted excessive attention and caused many industry entrants to be washed out, even losing confidence in the industry. However, as I previously mentioned in my Weekly, MEME is evolving, needing new revival growth after the bubble, which might bring value to the industry.
Moreover, we shouldn't focus only on surface-level hot changes. Builders are still building, and value projects are still seeking breakthroughs. By examining active developer numbers over the past year, despite experiencing a decline, they remain at a high level.
Although the market currently seems quiet and lacks a breakthrough industry narrative like DeFi in the previous cycle, looking back from the present always seems calm and full of opportunities. Standing in the present and looking to the future feels less confident, but isn't this the law of development and change for anything?
Even looking back at the Web3 industry in 2018, it was extremely poor, perhaps dozens of times worse than now, but this didn't prevent the subsequent massive explosion. We need time and patience to wait for the process of quantitative to qualitative change.
Will the Web3 Market Continue to "Decline Continuously"?
Lastly, naturally, it's about price. Over 90% of people feel this cycle is very different from previous ones, with little similarity, making many predictions obsolete. However, if the cycle concept remains valid, we are most likely still within this cycle, just without the previous crazy universal surge.
Recently, due to GS issues, US stocks plummeted, evaporating nearly $6.5 trillion in market value within two days. The three major US stock indices recorded their largest two-day and weekly declines since March 2020, which also drove extreme market movements globally. Whether this can improve in the short term remains to be cautiously observed.
When BTC has already pulled back nearly 30% and the financial market encounters a once-in-several-years major change, can the entire Crypto market remain unaffected? Perhaps this is a difficult question to answer.
However, our earliest economist, also known as the "God of Wealth" Fan Li, has a classic quote worth pondering: "When something becomes extremely valuable, it turns worthless; when something becomes extremely worthless, it turns valuable; the highly valuable is like excrement, the lowly valuable is like pearls." Perhaps we are now in a subtle moment of "viewing everything as excrement".
Will BTC ultimately reach $50,000 per coin? Saying BTC would reach 1 million per coin seven years ago sounded like a joke, but now it seems not far off. Living in the present means facing reality, but facing the future requires cautious optimism. Always on the road, always Building.
