Edited by Wu Blockchain Blockchain
In this episode of Wu Blockchain AMA, the focus was on observations and feelings from the Hong Kong Consensus Conference, discussing the current state and future of the crypto. Participants included Colin Wu, editor-in-chief of Wu Blockchain; Teddy, founder of XHunt and a DeFi expert; Leon Liu, CEO & CTO of Hubble AI; Esther, head of the Hong Kong ecosystem at Conflux; Haotian, a Web3 researcher; Albert Luxon, PM of macro hedge fund; Cindy from Jiami Technology; and well-known KOLs in the crypto such as Nana and Kirara.
The speakers shared their views on the future of the crypto and their impressions of the conference. With the market downturn and the rise of AI technology, the crypto is experiencing emotional fluctuations, with many becoming pessimistic about the industry's prospects. The speakers generally agreed that the "consensus" within the crypto has shifted, and many traditional cryptocurrency projects are facing new challenges. Nevertheless, some believe that the notion of "the end of the crypto" is overly pessimistic, and that the industry still has potential, particularly in areas such as payments, compliance, and stablecoins. The integration of AI and Web3 is considered a crucial future development direction, especially the fusion of decentralization and the AI economy, which may bring new opportunities.
In addition, the guests shared many interesting and absurd anecdotes about the conference. Overall, despite the current market challenges, many participants remain hopeful for the future, looking forward to finding new directions for development and potential growth areas.
The opinions expressed by the guests do not represent Wu Blockchain views and do not constitute any investment advice. Please strictly abide by local laws and regulations. The audio transcription was done by GPT and may contain errors. Please listen to the full podcast on platforms such as Xiaoyuzhou and YouTube.
Part 1: Sharing my impressions of this Hong Kong Consensus Conference
Colin: The Hong Kong government attaches great importance to the Consensus Conference, but it lacks industry hot topics and the atmosphere at the conference was rather lukewarm.
Colin: I haven't actually participated in the running events much, but I can share a few of my observations.
First, I also tweeted that day, and a friend joked that it was the first time I'd encountered an event where I had to buy my own alcohol—going to a bar and having to pay for it myself. I saw quite a few people saying the same thing in the comments, which I found quite amusing. To some extent, this also reflects the overall somewhat subdued atmosphere of this Consensus Conference.
The second point is an interesting observation. I think the Hong Kong government attached great importance to this consensus conference. Perhaps they believe that Hong Kong's role on the international stage has been relatively diminished, so they particularly value large-scale conferences initiated by overseas project parties. You see, many big names spoke at this conference, and several new policies were even announced. Judging from the overall atmosphere, the Hong Kong government indeed attaches great importance to this consensus conference.
My third impression is that there were indeed many foreigners present. I saw Joseph Lubin in Hong Kong, along with representatives from other overseas projects. However, overall, it didn't feel like there were many truly grounded, popular topics.
While the Hong Kong government attaches great importance to this, relatively few of these topics have become industry-wide hot issues. On one hand, there aren't many truly compelling industry topics at present. The two biggest current trends are prediction markets and stock tokenization. However, both face significant regulatory hurdles in Hong Kong. Therefore, despite their global popularity, it was difficult to see any concrete implementation or in-depth discussion of these topics at this Consensus Conference in Hong Kong.
Another point is that mainland China recently released policies regarding RWA (Real-World Asset On-Chain). I saw that this topic was discussed quite a bit at this conference, including by Xiao Feng and others. However, because this Consensus Conference was primarily an event hosted and attended by overseas organizers and participants, there wasn't much discussion about the latest developments in RWA in mainland China and Hong Kong. Perhaps in a few months, at events hosted by companies like Wanxiang, there will be more discussion about the latest developments in RWA in mainland China and Hong Kong.
Haotian: From "Everyone Talking to Their Own Insights" to "Collective Pessimism": The Shift in Industry Sentiment at This Consensus Conference
Haotian: My most direct impression from the last Consensus Conference was that everyone was talking about their own thing. For example, those involved in DeFi were shouting about RWA, or some were talking about AI, and others were talking about community. Everyone in various sectors was making noise, but you could see that everyone was really doing their own thing, and no real consensus or synergy had been formed. There wasn't a major trend that everyone generally recognized and was optimistic about. That was my feeling from the last conference.
But this time, what I sensed was a "consensus"—that "the crypto is doomed" and "this industry is finished." A unified pessimism and skepticism was what I felt most strongly. Of course, this doesn't represent my personal opinion.
The reason I made a special trip to attend this consensus conference so close to the Lunar New Year is because I originally thought it would be quite different from the conferences in April and May, which were more focused on Asia. Those conferences were dominated by Chinese projects, but I felt that this time it would be more attended by overseas project teams, who might be more optimistic overall, or less easily swayed by emotions regarding the future.
But in reality, after observing the situation, I found it might not be quite what I imagined. The Chinese projects and some KOLs I contacted did indeed tend to be pessimistic. However, I also networked with some overseas project teams at the event, and they seemed to be in an even worse state. They gave me the impression that their emotions were irrelevant to me, the future of the industry was irrelevant to me, and that I was just doing my own thing, which I didn't understand anyway. Overall, they displayed a rather apathetic, even somewhat resigned, attitude towards the industry.
I actually think this situation is worse. It would be better for everyone to feel the industry is doomed, to collectively criticize it, and then go looking for new opportunities, than for this situation where people superficially say the industry is doing well but are actually oblivious to external sentiment and lack any sense of urgency. Overall, I'm quite disappointed.
Cindy: The Consensus Conference was like a "top club," and I bumped into Bullish CEO Justin Sun Banana NFT – a truly magical scene.
Cindy: My experience attending the Consensus Conference this time was quite outrageous, a double experience of both outrageousness and surprise.
My first impression was that I really met a lot of top global figures at this conference; there were no retail investors, mostly core industry leaders. And you never know who's sitting next to you. For example, on the morning of the 11th, when I was listening to the Grayscale executive speak at the Consensus main venue, the man next to me was applying hand cream, and it smelled amazing. I added him on WhatsApp and asked him to send me the brand. Half an hour later, when he went on stage to speak, I realized he was Tom Farley, the CEO of Bullish, the one who invested in CoinDesk.
I also ran into Securitize's CEO, Graham, while I was having coffee. The day before, BlackRock announced its purchase of UNI (Uniswap token), and Securitize assisted in completing the compliance review.
The most outrageous thing happened at a party on the evening of the 10th, where Justin Sun was also present. After dinner, he said he would give everyone a dessert and handed out a huge box. When we opened it, there was really only one banana inside. I thought it was incredibly absurd, yet also quite funny.
Cat Brother: Haha, it seems to be that NFT he bought before, right? It's the one with the banana stuck on with tape.
Cindy: Yes, that's right.
Teddy: The main venue was deserted, while institutional investors were present; the diversion of funds and attention to AI has become a new "consensus".
Teddy: Actually, this trip is very different from my previous Consensus Conferences. In the past, when I attended conferences, I would usually stay at the main venue for at least half a day or even a whole day, but this time I spent very little time at the main venue, only about an hour.
After reviewing the projects, I realized that many were not familiar to the general public, focusing more on institutional business and compliance-related issues. Talking to them was difficult because I didn't know much about their projects and we didn't have much in common. Therefore, the only in-depth discussions I had at the main venue were a brief exchange with the Alibaba Cloud team.
On the contrary, I felt that there was more interaction at some of the peripheral activities. For example, at BNBChain's events, I could meet quite a few people and have good opportunities to communicate.
My most direct takeaway from this Consensus Conference is that the era of institutional investors has arrived. I feel that institutions are entering the market while retail investors are exiting. Once institutions and large funds enter, they will emphasize compliance, licenses, and regulatory frameworks, which are not actually friendly to retail investors. So, from my personal perspective, this Consensus Conference seems to be a fairly obvious turning point between institutions and retail investors.
As for the question of whether the crypto is doomed, my opinion is that it definitely won't. The spirit of crypto remains, the demand for decentralization continues, and this demand will persist for a long time and remain very strong.
But the biggest problem now is that AI has stolen a lot of attention and funding from crypto, and many builders have also turned to the AI track. So at this Consensus Conference, the "consensus" wasn't necessarily that the crypto is doomed, but rather that "we need to switch to AI."
I think the so-called "transition to AI" has two levels. The first is a complete transformation, abandoning crypto-related work and directly entering the pure AI track, such as developing products around the OpenAI ecosystem. The second is the combination of Web3 and AI, such as creating AI agents, or using AI technology to serve the needs of the Web3 industry, such as using AI to help Web3 projects with advertising, growth, and operations.
In summary, my impression can be summarized in three key words: institutionalization, AI-driven transformation, and a generally low level of enthusiasm. Neither project teams nor KOLs seem particularly enthusiastic. That's all for now.
Nanako: The Chinese-language section focuses on coin prices and buy the dips, while the English-language section is more relaxed, with AI becoming a standard narrative for projects.
Nanako: This time I attended some Chinese-language and some English-language events.
Let's start with the Chinese-language forums, mainly those related to cryptocurrency exchanges. I've noticed a strong sentiment there: the core focus is still on coin prices. In almost every Chinese-language forum, I'm asked similar questions, such as whether it's a good time to buy the dips at the current price, or if there are any other worthwhile cryptocurrencies to invest in. Overall, it seems that people are more sensitive to market fluctuations, and their emotions are more influenced by price.
Then I attended an English-language gathering, organized by a friend, which was similar to a KOL and project team meeting. Many of the participants were from Dubai and Europe. In that setting, almost no one mentioned cryptocurrency prices. It was mostly relaxed conversation and casual chatter about life and ideas. They barely discussed market views or price trends. So I felt that they were generally quite optimistic, or at least not so easily swayed by short-term market sentiment.
However, on the Chinese side, perhaps because everyone generally has a relatively large position, they are more sensitive to prices and their emotions fluctuate more significantly.
Looking at the overall trend, I actually agree with what Teddy just said. Previously, I thought that if the market was very bleak, the number of projects would be much smaller. But after attending many public chain events this time, I found that there are still quite a few projects underway, just of relatively concentrated types.
There are roughly a few categories: First is AI. Basically, no matter what field they're in, they'll add some AI elements. Whether it's payment or RWA, they'll overlay the AI narrative and move in that direction.
I've also seen some founders who were originally working on Web3 projects switch to pure AI projects. This is probably because more funding is currently flowing into AI.
However, I think that for those working on projects, it's crucial to understand their true strengths. I feel that AI and Web3 have different funding strategies and approaches. Blindly switching fields might not be a good thing.
Esther: Prediction markets and stablecoins converge, market makers return, and the battle for the Chinese-speaking market amidst the international consensus conference.
Esther: The following views are solely my own and do not represent any organization.
Running through this Consensus Conference gave me a very different feeling.
Firstly, I've noticed a huge number of teams working on prediction markets, seemingly hundreds. The participants come from diverse backgrounds, ranging from projects incubated by compliant brokerages to even teams with experience in offline gambling, such as those from Macau casinos. They recognize that prediction markets could become a "new type of casino" on the blockchain, and given their existing organic traffic, they don't want to miss out on this potential explosive growth area beyond traditional online gambling.
The second observation is the large number of Chinese teams working on stablecoins. This includes not only common USD stablecoins but also non-USD stablecoins. I even heard of a case where a team developing a live-streaming platform, primarily serving the European, American, and Middle Eastern markets with tipping features, wanted to issue their own stablecoin. They didn't want to rely entirely on other stablecoins for settlement and wanted to control clearing and issuance. You'll find that even application-layer teams now want to become stablecoin issuers.
The third observation is that market makers have become noticeably more active and have started to "operate." Because there are fewer projects and liquidity has decreased, their performance pressure is likely greater, so they are more proactive in contacting project owners.
Another impression is that this Consensus Conference was indeed very international. People from various regions and sectors, including Europe, America, Japan, South Korea, and Southeast Asia, were present.
Another crucial point is that major Western exchanges like Coinbase and Kraken are also starting to pay significant attention to the Chinese-speaking market. They've recognized its potential. Although the Chinese-speaking market is already highly competitive, and surpassing local platforms in terms of product and user experience may not be easy, recent fund and capital movements in the Chinese-speaking region suggest they also want a piece of the pie.
Ultimately, you'll find that Chinese users trade frequently and have high capital activity. Furthermore, these overseas exchanges have advantages that offshore platforms lack, such as stock tokenization and other business opportunities.
Albert: Consensus Conference from a Secondary Perspective — Trading Team Shrinkage, Traditional Institutional Takeover, and Concerns of a Liquidity Crisis
Albert: Since most people are talking about the primary market, I'll focus on the secondary market and fund trading. I work in a fund in Singapore, so I'll briefly discuss this from the perspective of the funding and trading team.
First, while attending the Consensus Conference, I noticed a very interesting phenomenon: from the perspective of trading and funding, this year's overall performance was significantly worse than the previous year. The previous conference was at least twice the size of this one. When I arrived at the main venue this time, my first impression was: why is there only one floor left? I even checked the list of exhibitors, and there were almost no new faces.
The event was almost entirely filled with familiar faces. Whether it was media, institutions, or exhibitors from traditional markets, it was practically the same people you'd seen before. You'd get the feeling—"It's you again, always the same old you." Whether they were in infrastructure, payments, revenue-generating products, or compliance channels, there was little change; there was almost no fresh blood. This was rather awkward.
But on the side events side, I noticed another phenomenon. There were several large-scale institution-only summits surrounding this Consensus Conference. I attended several, especially the one on Monday. I found that the number of trading teams participating was about one-third less than before.
Why? Because after the market rally last October, many teams that focused on arbitrage, funding rates, and carry strategies were wiped out. Using the word "wiped out" is not an exaggeration at all.
Even in this environment, over 85% of the teams I encountered were still using the same old three strategies, without any significant upgrades. Strategies with genuinely high barriers to entry, such as market making, long-short, and volatility, have become extremely rare, and even rarer as you progress. In the volatility field, I hardly saw any newcomers; it was all familiar faces. In market making, I still saw a few newcomers, such as a few teams from France working on on-chain liquidity deployments at the DWS event. But in long-short and volatility, there were virtually no new entrants.
My impression is that the market has lost its appeal to new trading teams, or rather, it has matured to a point where newcomers are no longer interested in joining.
Regarding institutional business, traditional lending and custody services didn't receive much attention at this Consensus conference. The two areas that garnered the most attention were payments and the transfer of RWA's asset exposure.
The problem is that both of these directions are essentially becoming "license businesses." Payment requires licenses, a robust AML/CFT system, and strong credit; RWA is even more so, with the core being the issuer and compliance qualifications. Some Chinese institutions I met at the event said it's "Old Deng's business"—only those with deep traditional financial backgrounds and established credit can do it.
What does this mean? It means that many institutional businesses are being gradually taken over by institutions with traditional financial backgrounds. This trend is completely different from that of a few years ago. For institutions like Robinhood, which already have a traditional market foundation and are now entering the crypto market, reverse penetration is relatively easy.
I also met people with backgrounds from traditional markets such as the NYSE and HKEX, who were very confident about entering the RWA or asset servicing field. For them, it's simply a transfer of skills.
In terms of strategy capacity, the current problem is that, apart from the "old three" strategies, the capacity in other areas is very limited. From what I heard on-site, many strategies had a capacity of less than $10 million, with most falling between $10 million and $30 million. I hardly saw any teams capable of handling large asset management scales. This is completely different from the past.
Another significant change is that LPs and FoFs are now placing great emphasis on "cross-market capabilities." Whether in traditional or crypto markets, they want teams capable of trading not only cryptocurrencies but also cross-asset classes such as US stocks and commodities. This is a very clear trend.
Let me complain about the side events at the institutional event again. The number of attendees at the institutional events was significantly lower than at the KOL events, much quieter. Many so-called "institutional events" actually had attendees from wallet companies, infrastructure companies, and even affiliate marketers, but the actual trading teams probably made up less than 20%. This is very rare these days.
Even more dramatically, I had just returned to my hotel last Thursday after attending an institutional event when my phone suddenly vibrated—a very large institution had suspended repayments. The market was already in a bearish phase at the time, and this news immediately jolted me awake. When I checked which institution it was, it was one I knew very well; a friend of mine held a significant position there, and it was a large and reputable organization. My first thought was that if it really collapsed, the impact might be even greater than 3AC's.
After the meeting, as soon as the news broke, everyone was speculating who would be next.
In summary, my core observation is that the entire market is undergoing a transition period led by traditional financial teams. This transition presents an opportunity for those capable of adapting, but for teams unable to handle the changes, the growing pains will be very prolonged, and they may even be wiped out altogether.
Kirara: The Consensus Conference has shifted from "finding projects" to "finding food," with KOLs collectively turning to AI for self-rescue.
Kirara: I've actually attended many events, including Web3 events in Singapore, Dubai, Japan, Taiwan, and Hong Kong last April. I think the biggest difference between last year and this year is that, as a KOL before, I would meet with agencies and project teams to see what new moves or promotions they had recently made. Everyone used to be looking for "where there are projects".
This time, however, people weren't looking for projects; they were looking for food. They were really hungry.
With Bitcoin's price plummeting like this, hardly anyone talks about it anymore, or about cryptocurrency trading. Before, people would discuss "what projects you've been researching lately," "which airdrops you've been participating in," or "where you've been making money." Now, they talk about "what you've been busy with lately" and "what you've been doing lately."
The answer I received was that many people are researching Vibe Coding. People used to say don't be product managers, but now everyone's a product manager. The bear market has given everyone a lull, a time to calmly study AI, such as using AI programming tools to create small websites or products for themselves.
I also saw a KOL use AI to create a program that allows users to control the direction of rain with gestures, paying homage to a movie scene. Now, people aren't focused on which coin will increase 100 times, nor do they care whether Bitcoin can reach $100,000 or hit a new high. They're even too lazy to criticize America or Trump anymore.
This is the situation I've observed among KOLs.
Judging from the events, the ones with the largest crowds and the most extravagant displays were those organized by exchanges. I attended two: Binance and BitMart. Binance was packed; BitMart practically booked out the entire Lan Kwai Fong venue – truly extravagant. It seems the exchanges are the wealthiest.
There weren't many side events organized by the project itself. One was quite unique, where several projects held events together in one hall, with round tables and a lion dance performance, making it look like a wedding. The organizer was actually a project company that specializes in events, which left a deep impression on me.
Part Two: Is the crypto truly "doomed," and what opportunities remain?
Kirara: The receding of old narratives and the "infrastructure-ization of AI"—the crypto isn't over, but the rules have changed.
Kirara: First of all, I need to understand the statement "the crypto is finished" in two parts. I don't agree that the entire industry is finished. But I think it's true that some old things are indeed finished.
For example, the narrative surrounding Bitcoin has actually evolved. Initially, it emphasized privacy, decentralization, and censorship resistance, which supported its early growth. Later, Bitcoin's rise was driven by the narrative of "digital gold." But now, the driving force behind its renewed surge does seem to be weakening. In other words, the portion of the old narrative that supported the surge has, to some extent, "gone."
Let's talk about projects. I've noticed some projects have been building for a long time but haven't achieved any significant milestones or outstanding results, yet they're still building. But the pace of the crypto is incredibly fast; sometimes I feel like it's a talent show for internet celebrities. The window of opportunity for a concept might only be three to four months. If you don't break out of the niche and "debut" within those three or four months, it's very difficult to regain popularity based on the same concept later.
Some sectors that were very popular recently, such as certain lightweight product narratives, were hardly discussed at this Consensus Conference. You'll find that if you didn't keep up with the pace and didn't debut during that talent show period, it will be very difficult to compete later using your original advantages.
The same applies to AI. Last year, many so-called AI projects used AI as a core selling point. For example, you could use AI to give instructions to buy and sell cryptocurrencies, or create AI virtual boyfriends or girlfriends, or companion-type products. These were typical AI narratives last year.
But I feel something has changed this year. Previously, AI was a "feature of the project," but now it has become the "foundation of the project." You no longer distinguish between AI projects and non-AI projects; in fact, it seems strange if a project doesn't have AI. AI is transforming from a label into an infrastructure.
Therefore, the pressure on project teams is immense. They must constantly keep up with the pace and trends. If we look to new sectors, I think the crypto has hope; but if we remain stuck in old sectors and old narratives, then from that perspective, the crypto is indeed "finished."
Albert: The crypto isn't finished, it's maturing — the trend of financial infrastructureization and "US stock market-ization" is reshaping the industry.
Albert: I don't really agree with the term "finished". Rather than "finished", I prefer to use a word to describe it — maturity.
What does this mean? From a macro perspective, starting in 2024, the crypto market has actually been shrinking. Many sectors have been validated, and the market has gradually reached a consensus on which sectors can generate stable cash flow and which have a higher probability of success.
During my trip to Hong Kong, I also had some conversations with some friends, and they summarized four areas for me: payments, transactions, compliance, and risk control.
If you look at the booths at this Consensus Conference, you'll find that they're basically all focused on these four areas. Compared to 2024, when these areas were mainstream but not absolutely dominant, this time almost all established companies and projects are working around these four areas.
What does this mean? It means the market has clearly defined "what crypto can do." It's being seen as a new generation of financial infrastructure, rather than a boundless testing ground for innovation. The space for innovation is shrinking, and it's increasingly revolving around finance itself.
This is why payments and RWA were so prominent at this conference. Most other new narratives have already been explored. What follows is more of a "license business"—whoever has compliance capabilities and credit backing will have the advantage.
However, I believe that some directions do face the risk of "shrinking" or even "going out of business," such as Crypto native listing, which is the path of listing and issuing tokens specifically on crypto exchage.
I spoke with some of the more stable project teams, and their thinking was very clear: if a project grows large, they won't consider listing on a cryptocurrency first, but rather on an IPO, such as on Nasdaq or the Hong Kong Stock Exchange.
This explains the unusual activity from many traditional exchanges. Nasdaq, the NYSE, and the ICE system are all pushing for asset tokenization. If traditional financial institutions can provide stronger credit backing, then excellent projects will naturally be more willing to list on the US stock market through the sponsorship of the Big Eight investment banks.
If a company can be listed on the US stock market, the valuation, liquidity, and long-term funding support it receives are significantly better than simply listing on the Crypto exchange.
This will bring about a very crucial shift in perception: projects listed on the US stock market are considered "good projects," while those that cannot be listed on traditional capital markets may be labeled as risky.
I even spoke with Bloomberg, and they said that South Korean retail investors are now more inclined to buy crypto-related stocks listed on the US stock market, rather than projects simply listed on exchanges. Traffic to the four major South Korean exchanges has declined significantly; even the most speculative retail investors are starting to lose interest in cryptocurrency-only listings.
This means that the role of exchanges will change in the future. Previously, exchanges could make a lot of profits through listings at the first and a half tiers; in the future, they are more likely to revert to being secondary service providers, such as those offering transaction fees, custody, and fiat currency gateways.
For exchanges like Coinbase, the core advantage is ETF custody; for Kraken, the advantage lies in Euro fiat currency deposits and withdrawals and foreign exchange channels. In the next three to five years, the standing of each exchange will largely depend on its capabilities in secondary market services.
So to summarize: the crypto isn't finished, it's maturing.
But what does maturity mean? It means less exorbitant profits, less innovation, and the intervention of traditional financial forces.
Some old models, such as those relying solely on cryptocurrency native listings, may face profound changes or even be marginalized. The industry can survive, and will survive more stably, but the days of champagne and sports cars are likely to be long gone.
Cindy: The era of simply being a "crypto" is over; stablecoins and the on-chaining of US stocks are driving the deep integration of cryptocurrencies with traditional finance.
Cindy: Is the crypto doomed? I agree at least halfway.
First, the era of simply being a "crypto" market is definitely over. This is evident from the transformation actions of major exchanges. Why are Binance and Bitget both working on putting US stocks on-chain? Matrixport also launched the ability to deposit stablecoins to buy US stocks a couple of weeks ago.
They possess the most authentic, firsthand user data. When Bitcoin reached around $120,000, large investors were already selling their holdings and turning to the US stock market to seek AI-related investment opportunities. If exchanges don't upgrade their product structure, high-net-worth users will quickly leave. We're no longer at the stage where maintaining relationships with a few large clients is enough to retain customers.
On the other hand, I believe the era of integration between traditional industries and crypto has arrived.
A prime example is stablecoins. Over the past six months, through blind dates, I've met many people in the payments industry. They often complain that stablecoins are going to "kill" the traditional payments industry. For the past decade or so, the payments industry has made a lot of money from transaction fees, exchange rate differences, and a lack of transparency.
However, since the emergence of stablecoins, they have achieved large-scale distribution from 0 to 1, and from 1 to 100, thanks to the exchange ecosystem. Customers have also gradually realized that using stablecoins for settlement is faster, cheaper, and more transparent. Therefore, they have begun to require traditional payment companies to integrate stablecoins.
Two days ago, I invited leading self-media figures in the payment industry to our company for an offline sharing session. The night before, around 11 PM, people from exchanges, asset management firms, wallet developers, and OTC teams all contacted me at the last minute, asking if they could attend. This shows that there is indeed a strong need for integration between the crypto and the traditional payment industry. Moreover, everyone is currently under immense pressure to meet performance KPIs and is looking for new growth points.
As for which projects are doing well?
The first category consists of project teams that are able to capitalize on local policy benefits. For example, teams that are adept at utilizing Hong Kong's policy window of opportunity and quickly achieving compliant implementation.
The second category consists of Hong Kong-listed companies that have transformed and embraced new narratives in a timely manner in Hong Kong. These companies possess both traditional capital market identities and the ability to embrace encrypted narratives, and are thriving as a result.
Therefore, my view is that the era of pure "crypto" is indeed coming to an end, but the era of Crypto's integration with traditional finance has just begun.
Esther: With policy dividends and American endorsement leading to a rise, the real danger lies in a "mental bear market."
Esther: I think those who are doing well are the ones who have seized the policy dividends. For example, on February 6th, the China Securities Regulatory Commission issued new regulations allowing the tokenization of high-quality domestic assets. This is essentially a policy tailwind. In the past, we were always being "fleeced," but now we can also take out our high-quality assets and connect with global offshore liquidity.
For projects like ours that have always followed the compliant route and been relatively "well-behaved," this is a very good window of opportunity. Finally, there is a clear framework for doing business, instead of groping in the gray areas.
Which ones will "go under"?
The first category consists of teams with severe path dependence. For example, the quantitative trading teams that Albert just mentioned were wiped out. If they don't upgrade their strategies, they will still run into problems when faced with systemic risks in the future.
Similarly, there are some project teams and agencies. If they continue to operate using the methods from the last bull market, they will basically not make money. The last bull market was a special phase with extremely high liquidity and a strong narrative; replicating that approach now will definitely not work. I know many offshore exchanges are also trying to transform, otherwise they will be in a very difficult situation.
There are also projects that chase trending topics. Like Kirara said, it's like a talent show. The window of opportunity for a trending topic is only a few months. If you don't release a product when it's at its peak, it's almost impossible to create a pre-product after the hype has died down. For example, predicting the market—there are 800 trending topics every day; it's simply impossible to keep up.
I think there are three types of people who believe that the crypto will not collapse, and may even be thriving.
The first category consists of entry-level businesses with clear business models and cash flow. For example, Radopay is about to go public, with a reported valuation of close to $2 billion. Many of these companies don't actually want to be labeled as "Web3 companies." Because once labeled as a "crypto company," it might actually negatively impact their valuation. I think that's quite sad, but it's the reality.
Projects like NPC Wallet, which serve businesses, have real demand and are thus able to develop steadily.
The second category is what I call "American native" projects. They naturally stand at the top of the food chain, especially those with strong political and financial backing. For example, LayerZero; I happened to attend their dinner. They've recently announced many collaborations, such as the Citadel partnership, which accounts for about 20% of US stock trading volume, and DTCC, both of which are collaborating with them.
With the support of Wall Street veterans like a16z and Franklin Templeton, such projects naturally possess pricing power and industry influence.
The third category is securities firms. Many traditional securities firms participated this time, and they seem quite optimistic. For them, it's simply a matter of upgrading their VATP license and adding a new profit center. For example, selling cryptocurrencies can generate profit from slippage and transaction fees, with returns even higher than traditional stock trading.
You'll see brokerages in Central and Tsim Sha Tsui in Hong Kong already offering on-the-ground cryptocurrency sales. They have mature front-end traffic capabilities, operational capabilities, and VIP service systems. They don't actually think the crypto is doomed.
Finally, I'd like to conclude with a quote from Mingdao, whom I shared during a podcast collaboration: "The most terrifying thing isn't a price bear market, but a mindset bear market."
Price drops aren't scary; what's scary is that some established players have already made enough money and are numb to industry changes, or they're xenophobic, refusing to accept new players and new changes. If the entire industry enters a "mental bear market," that's truly dangerous.
Nana: The elimination of inferior projects and the dominance of institutional investors in the market have reduced opportunities for retail investors, but the industry is becoming healthier.
Nana: Okay. I'll mainly talk about it from two perspectives: the project owner's perspective and the investor's perspective.
Let's start with the project teams. Having worked on projects myself, I'm quite familiar with the situation. In the early days of the crypto, there were indeed many opportunistic projects. Many projects hadn't even developed their products, some were just PowerPoint presentations, yet they could issue tokens and then reap the profits simply by getting endorsements from well-known labs.
But this narrative no longer works. Overall liquidity is very low now. VCs have less money on hand, and many VCs are no longer investing much in the primary market. If your product isn't solid, can't generate cash flow, or the founding team doesn't have genuine fundraising capabilities, the project is basically impossible to launch. I actually think this is a good thing. It's a process of natural selection, which will raise the overall quality of the industry and allow users to access better products.
From an investment perspective, with more and more institutional investors entering the market, I personally feel it's not as friendly to individual investors as it used to be. It's not that there are no opportunities at all, but the opportunities are much fewer than before.
For example, with mainstream cryptocurrencies, a large portion of the tokens are actually held by large institutions. Ordinary retail investors don't hold many tokens; many are currently holding USDT and observing the market. If tokens are highly concentrated in the hands of institutions, their ability to control market fluctuations will be much stronger.
In this situation, many retail investors will turn their attention to Meme coin. However, I personally believe that after last year's market volatility and various FUD events, people's enthusiasm for Meme has clearly declined, and they have become more cautious.
Overall, the market is now more rational and more institutionalized. Opportunities for short-term windfalls for retail investors have decreased, but in the long run, the industry may be healthier.
Haotian: Emotions are "finished," but the Agentic Economy may become the next consensus.
Haotian: Let me state my conclusion first—the emotional state is definitely "doomed." There's no denying that. The past two years have been agonizing for both long-term holders and those with faith in the industry. Project teams are suffering, but VCs are suffering even more. At conferences, it's clear that the overall emotional state has truly collapsed. Why? Because the old narratives and old rules are becoming ineffective.
Many retail investors are still stuck in the mindset of the previous cycle, always dreaming of 10x or 100x returns. But in this cycle, you'll find that the more you cling to this fantasy, the more you lose. The same applies to project teams. In the previous two cycles, writing a white paper, putting on a mask, and building a project for two years, achieving a valuation of three to five hundred million US dollars wasn't difficult. But now, valuations have been severely compressed.
What does this mean? It means this industry isn't as alluring as it used to be. Objectively speaking, AI is now more "respectable" than the crypto. Starting an AI startup in the Web2 space is easier in terms of fundraising, and the growth potential is clearer. If you want to raise money, buying AI-related stocks on the US stock market is likely less risky than buying Altcoin. So why has this happened?
First, there are too many assets, leading to the industrialization and streamlining of token issuance. This isn't just limited to memes. Memes used to last for months, but now that's shortened to weeks, days, or even minutes. The lifespan is getting shorter and shorter—a result of involution.
Project teams are increasingly adopting an assembly-line approach to "financing - TGE" (Trading for Existing Products). During the TGE phase, many products are still immature; it's essentially still an attention economy. The entire industry seems to be playing the attention arbitrage game. The era of "buying a few and waiting for a general rise, holding on and getting rich quick" is basically gone. The core reason is—a breakdown in consensus.
Why are OGs no longer speaking out? Some have indeed made enough money and are now free; others may have lost money and left. But more importantly, they no longer understand the current game. Every six months, new KOLs, new projects, and new narratives emerge. The older generation may not be able to keep up.
Exchanges are also changing. Binance, for example, has become the focus of online discussion. Other exchanges are also making their own moves; Bitget is tokenizing US stocks, and OKX is developing AI agents. Instead of building a liquidity loop around native on-chain assets, everyone is going their own way. This makes the "general rise logic" of native on-chain assets increasingly difficult to achieve.
Hyperliquid is one of the few projects that succeeded in this round. However, it's far removed from the market, focusing solely on product development and unable to leverage KOLs. Teams like this are rare. The same applies to prediction markets. Polymarket dominates MindShares, with valuations often reaching $30 billion. How do newcomers price their offerings? You can't claim to be anchored to Polymarket; that would be laughable. Many crypto native prediction markets are essentially just riding the liquidity wave.
Looking at the technical narrative, ZK, high-performance Layer 1, and BTC Layer 2 are almost never discussed anymore. There's a sense of tragic decline, like a great river flowing eastward. The founders are still working diligently, but they seem to have been abandoned by the times. Many problems remain, but are there any new opportunities?
I've been talking about one direction lately — the Agentic Economy.
Why do I see this as an opportunity? Because AI consensus is emerging. Innovation is still happening. Things like the new ERC standard, the expansion of stablecoins, prediction markets, AI trading, and robotics can all be connected.
Robotics is Physical AI, the skeleton and limb extension of AI. Stablecoins are the infrastructure for value circulation. Prediction markets are information pricing mechanisms. AI Trading is automated execution. Putting these together creates a grand framework for the Agentic Economy. Add to that narratives like digital avatars, digital immortality, and AI proxy personalities, and this becomes a comprehensive macro-level direction that can span both Web2 and Web3. I don't think the next cycle will revert to pure speculative logic, but I believe new and interesting things will emerge around the Agentic Economy.
In summary: the emotional landscape is indeed "done," and the old narrative is receding, but a new macro-narrative of AI + Crypto may be emerging. The key is whether a new consensus can be found after the collapse of the old one.
Teddy: Reflections After the Consensus Conference — Lack of Innovation is the Root of the Crisis; Agentic Economy May Become the New Consensus
Teddy: Let me start with a fundamental question. Before answering "Is the crypto finished?", let's ask a question first—what is the core of the crypto?
I believe the core is decentralization, including both decentralized technology and the spirit of decentralization. These two points have always been valuable. Therefore, in essence, decentralization is unlikely to fail; it will remain meaningful in the long run.
But the reality is that the entire cryptocurrency industry is facing a very serious problem—people feel it's no longer useful. A large amount of "useless assets" has been created in the market, faith is waning, and a significant number of investors and builders are leaving. Of course, not everyone has left, but the rate of loss is very high.
I've been thinking about the reasons. I think the core problem is the lack of genuine innovation in recent years.
Looking back, Bitcoin was born in 2008, marking the first major innovation—a decentralized peer-to-peer electronic cash system. Over a decade of validation has proven its value.
The second major innovation was Ethereum, which introduced the concepts of a "world computer" and smart contracts. It generated immense excitement at the time.
The third was the DeFi Summer of 2020, which gave birth to a series of truly useful protocols such as Uniswap and Aave. To this day, these protocols remain the cornerstone of the entire on-chain ecosystem.
It is thanks to innovations such as Bitcoin, Ethereum, and DeFi that we have today's RWA, the large-scale application of stablecoins, and the convergence of Web2 and Web3.
However, in this cycle, we haven't seen a new product with the same impact. As a result, the market is flooded with ineffective assets, and many project teams are no longer focused on creating great products or building sustainable cash flow, but rather on "getting listed on top exchanges." When listing becomes the sole objective, the industry will run into problems.
Because many projects stop building immediately after listing, they lack real value. A typical alpha in this cycle has even become— short from the day the token is listed. Many tokens reach their peak on the first day of listing, so who would be willing to hold them long-term?
When an asset lacks long-term value, the market naturally loses confidence. Prices fall, and BTC, ETH, and DeFi tokens all come under pressure. Builders leave, VCs leave, incubators decrease, and the supply side reduces. The supply of truly high-quality assets is decreasing, which is a serious crisis.
Where does the future lie?
I've been focusing on prediction markets and AI lately. Prediction markets have value, but they haven't yet delivered the kind of revolutionary impact that Bitcoin, Ethereum, or DeFi have.
The real disruptor is AI.
For example, with current AI programming capabilities (Vibe Coding), you can generate a usable product from an idea in just over ten minutes. Previously, even a strong development team would need one to two weeks. This increase in productivity is a huge leap.
For example, the new generation of large language models not only "helps you analyze problems," but can directly "help you solve problems." You say a sentence, and it executes it for you, which is close to a true AI assistant or digital employee.
Therefore, I strongly agree with the direction of the Agentic Economy. If Crypto is to achieve new consensus, it may have to combine with the Agentic Economy.
Another direction is decentralized AI. Current AI is extremely centralized, with a few companies controlling the models and operating like a black box. In the future, people may pay more and more attention to decentralized AI—a transparent, verifiable, and jointly owned model that is trained and inferred through decentralized networks.
This direction is very early, but in the long run, it is highly consistent with the spirit of decentralization. If a democratic, open, transparent, and human-controlled AI system can be achieved, it will be a very attractive long-term direction.
To summarize:
The crypto world is not fundamentally dead, but the lack of innovation has led to a crisis of faith.
If a new "consensus" is to be formed at the next Consensus Conference, truly impactful new products must emerge. Currently, the most likely breakthrough lies in the Agentic Economy and decentralized AI.
Leon: The Consensus Conference is clearly internationalized, but the field is not very active; AI trading and prediction markets may become a new consensus direction.
Leon: Since I am based in Hong Kong and we are participating in the exhibition as a project team, I can share my observations and views on the industry from the perspective of the exhibitors.
I think this Consensus Conference was quite international. CoinDesk's organizational skills are indeed excellent. Although the overall attendance wasn't as large as 2049, there were actually more overseas faces. Whether it was project teams, exhibitors, or attendees, Chinese and overseas people each made up about half. We attended some Demo Days and clearly felt the international atmosphere there as well.
We also co-hosted a side event with Google, and most of the attendees were from overseas. So, to be honest, it's a bit of a shame; if this were a bull market, such a platform bridging Asia and the world would have been incredibly powerful. We also met many overseas KOLs, distribution channels, institutions, and even people from Wall Street investment banks looking for projects.
The problem is that the overall atmosphere was rather subdued this time. Not many project teams came, and many people who visited our booth said there were very few interesting projects. Aside from exchanges and service providers, there weren't many truly crypto-native projects or those seriously developing products; it was mostly service-oriented companies. Many people felt the ticket price wasn't worth it. Furthermore, community KOLs didn't come to the event much either.
To our surprise, apart from us, there were almost no other projects related to prediction markets at the entire conference. Given how hot prediction markets are, there were virtually no teams involved at this Consensus conference. AI projects were also scarce; there were only a few robotics-related projects.
Another funny thing is that the sponsor of this hackathon was a Base-based meme launchpad, but the launchpad was very deserted. Everyone got bored by the end of the hackathon, and the first and second place winners didn't even stay to receive their prizes. This reflects that memes are indeed not popular anymore.
Overall, the atmosphere of this bear market is indeed quite strong, and it's somewhat similar to the one in 2019. During the 2019 bear market, even though prices fell, there were still many innovations, such as SocialFi and GameFi, and later inscriptions and BRC-20, which were still popular at that time. But in this round, there wasn't much real innovation during the bull market, and the atmosphere has worsened since the bear market began.
However, I still think there's a chance. I personally have three areas I'm optimistic about.
Firstly, there are contracts, whether perpetual contracts on CEXs or DEXs. The saying goes, "spot trading in a bull market, contracts in a bear market." Even in a bear market, there's still volatility, allowing for long and short and leverage. Trading contracts around major cryptocurrencies often presents more opportunities than chasing short-lived meme coins or Altcoin with 10-minute lifecycles.
Furthermore, a current trend is that stocks, commodities, and forex are all moving towards on-chain derivatives. Exchanges and DEXs like Hyperliquid are all starting to list these assets. Many traditional retail investors find it difficult to short gold or trade with leverage in the real world, but this is possible on-chain. This is the advantage of combining cryptocurrencies with traditional assets.
Secondly, there's AI. AI has been incredibly hot this year. Whether it's exploring protocol layers like ERC-8004 and EIP-402 within the industry, or deploying open-source LLMs and agents, everyone's involved. And outside the industry, AI is already disruptive in film, creative work, and productivity. The key to the future is how AI can be combined with crypto.
Third is prediction markets. Prediction markets are still in their early stages, and people haven't yet found a way to participate on a large scale. But it's not just something within the crypto community; institutions outside the crypto space are also watching it. Moreover, it's an on-chain application, so those of us with on-chain experience naturally have an advantage.
Overall, I think that although the bear market atmosphere is very strong, some very interesting things can still be created around contracts, AI, and prediction markets.
