Author: Sankalp Hashtalk Source: X, @HashtalkSankalp
Preface: Background
I spend hours every week reading, researching, and talking to some of the smartest entrepreneurs and investors. This post is my attempt to give you a very realistic snapshot of the current state of the crypto industry — based on my personal attendance at Token 2049 and Solana’s Breakpoint conferences.
I’ve been in this space since 2013, so trust me, I’m telling you what’s happening today. Most of the meetings were one-on-ones with people, but I also spent time wandering the Token 2049 booth maze like Alice in Wonderland, exploring its mysteries.
Firstly, a big round of applause to Singapore, Marina Bay Sands and the organisers of Token 2049 - the event was perfectly organised. It is incredible that Singapore can still host such a high quality event during its busiest week (F1 weekend is coming up).
Without further ado, let’s break down the vibe, deals, founders, VCs, narratives, and of course, winners and losers. Buckle up… let’s dive in!
1. Overall atmosphere
For the past decade, we’ve been sold a dream that cryptocurrencies would change the world, solve real-world problems, and usher in a flood of Web2 users into this brave new world. But frankly, cryptocurrencies have yet to fully deliver on that promise.
Instead, we have collectively become thrill-seeking gamblers, jumping from one Ponzi scheme to another like squirrels on espresso.
The 500+ side events at Token 2049 are a perfect example of this phenomenon. Projects are overfunded to the point where their marketing budgets are larger than their actual revenue (if they have any revenue), and flashy booths and five-star venues mask the fact that user adoption is minimal. VCs, who once casually invested billions, are now hitting the pause button. The good news is that only serious projects can get funding now; the bad news is that it has only gotten to this point until now.
As a result, we’re seeing a fragmented market with 100+ L1/L2s all competing for the same crypto audience — decreasing engagement and fewer meaningful conversations.
From Solana to Ethereum memes, to Base, and now Justin Sun flying too close to the sun like Icarus. This is great for short-term drama, but where is the long-term vision? Where is the mass adoption we were promised? The act of jumping from one meme to another is not doing real business.
Over the years, we have gone from ICO hype to DeFi yield farming, from NFT mania to GameFi distribution Ponzi scheme, to PoS staking, re-staking schemes, and now even Bitcoin re-staking (is this real?), to a pyramid of points and airdrops. What's the next gimmick? People in my circle and I are very worried about the direction of this industry. There is a lot going on, but there is almost nothing worth showing.
VCs are frustrated that they didn’t foresee the meme coin craze and they can’t get involved in this space with regulated funds. Founders complain that VCs no longer fund every project that pops up, and farmers are disappointed that airdrops and points didn’t bring the expected wealth (such as Grass, Eigen, Blast, etc.). The only ones who can laugh are traders (CEX, DEX, perpetual contract trading), gambling platforms (such as Rollbit, Shuffle, Polymarket, meme coins) and the infrastructure that supports it all. This is obvious from F1 sponsorship, giant booths and multi-million marketing budgets.
Meanwhile, AI and stocks are stealing the show, and NVIDIA is delivering crypto-like returns. Better returns, less risk, better regulation, and more convenient UI/UX for depositing with fiat currencies.
Smart traditional financial money is earning returns from stocks, which are much less risky than cryptocurrencies (yes, I know stocks are risky, but look at the current crypto market). Why bother with cryptocurrencies when you can just buy options on MSTR or COIN to get exposure to cryptocurrencies?
OK, OK, not all is bad. There are still some silver linings. Some great founders are still getting funded, and some real use cases with real revenue potential are starting to emerge. VCs are getting more selective, thank goodness. And we’re also seeing more enterprise players, like Sony, global banks, and financial firms, tiptoeing into this space. But let’s be clear — this is not the mass adoption we were promised.
So where are the opportunities? I’ll explore this below, but I think the answer depends on the perspective of the “coin holder.” Where you are, the game you’re playing, the community you belong to, and your situation will determine everything.
In the crypto space, two types of games have emerged:
Short-term narrative driven games, quick in and out: There is nothing wrong with this game, but it is mainly played by gamblers, short-term founders, VCs and KOLs, all of whom are trying to get rich quick by picking up bargains on the edge of a knife.
Long-term, huge VC-backed play: top developers and founders backed by big funds, expecting huge returns through IPOs and potential future “Solana” or infrastructure projects.
So while the atmosphere at these events is a bit like a parade in the rain, there are still bright spots - some founders, projects, and VCs that may surprise us in the next few years. I have been in this crypto rabbit hole for 11 years, and I will continue to stay. But let me be clear: if Bitcoin goes to $100,000, we will all be quickly back to "Ponzi Scheme" paradise, and no one will care about fundamentals - until the market rings the alarm bells for us, and then it will be too late.
Stay hungry, stay foolish, stay hedged, always
2. Cryptocurrency Audience
1. Crypto investors and traders (65%)
These newbies are like excited puppies, chasing every shiny target, mainly to catch the next Bonk, WIF or Poppet, hoping to exit quickly and walk away with a profit. Their characteristics include:
Hopeful speculators: They believe they can get rich overnight by cycling from one meme coin to another in the short term, like kids jumping for candy at a carnival.
Giveaway Enthusiasts: They are primarily interested in free giveaways—gifts at trade show booths, parties, and the myriad side events that promise free drinks and snacks.
Short-term thinkers: They focus on immediate gains and often overlook the more complex game going on behind the scenes.
Project Creators: Some even try to launch their own projects, often funded by like-minded short-term VCs. But most of these founders have difficulty obtaining further funding.
2. “Smart” developers and venture capitalists (25%)
This group is the “smart people” who think they are elite and try to emulate the success of Vitalik, Anatoly or Raj while selling their dreams to VCs. Their strategies include:
Priority Fundraising: Their first goal is to raise funds for operations in the next 2-3 years, creating hype through collaborations with KOLs and flashy announcements.
Token hedging: They typically sell a large pool of tokens from their treasury to fund more operations, and gradually sell them after the token is listed, while letting the token price fall.
Let others take over: If a bear market comes, venture capitalists and retail investors will be the ones to take over, while these founders continue to enjoy generous salaries and business-class travel.
Disguised long-term vision: They pretend to be champions of change until the token is launched, then their true intentions become clear - think of Blast and Friend.tech, where everyone knows they will quickly jump to the next Ponzi scheme. There are hundreds of examples of this type of project.
3. True Builders (10%)
The last category is the real visionaries - the true "warriors" who are committed to building their "French future" (or whatever their vision is). Their characteristics include:
Smart minds: These people don’t just sell dreams, they focus on creating revenue-generating businesses that truly add value.
Perseverance: While they may have struggled to gain traction initially, they are steadfast and refuse to launch tokens simply to exit liquidity.
Long-term commitment: They take a long-term view, keep their feet on the ground, speak out and advocate for the sustainable development of the industry.
In short, these three groups showcase the spectrum of attitudes in the crypto space — from impulsive gamblers to cunning schemers and, ultimately, the true builders who may lead us to a brighter future.
3. L1/L2 and Infrastructure
Ethereum’s Identity Crisis: Ethereum is in the middle of an identity crisis — think of it as having a mid-life crisis and wanting to buy a sports car while everyone else is opting for an electric car. Now that much of the attention (and development effort) has shifted to Solana and a few specific EVM Layer 2s, many users are starting to cast a shadow on Ethereum. At the end of the day, price is more important than block size. I often ask myself, have Ethereum’s opinion leaders become too comfortable to engage with the developer community? Why can’t they be like Solana? Is Vitalik really the “savior”?
Solana: The Clear Frontrunner: In my opinion, Solana is confidently walking the runway like a model who has won the “Best in Show” award. I have been a strong advocate for Solana in our Telegram channel and Hashtalk newsletters. After Breakpoint, the heat in the Solana ecosystem is even more electric. Not only are they putting their money where their mouth is, they are also shipping products faster than a pizza delivery on game night. Looking at Firedancer, the Solana community is very organized, especially compared to the chaotic scene of Ethereum global events. Solana’s single-chain focus and unified community give them an advantage - focus is key! If you want detailed analysis on Solana, subscribe to 5-Minute Macro and Crypto or 52 Trades in 52 Weeks.
TON: The huge success of TADA and TON crypto payments: On Token 2049, almost everyone and their mother is passing referral codes using TADA and TON. This is an extremely successful marketing campaign. TON is the next most promising L1, with its own 800 million users, it has the potential to really drive mass adoption. I am very bullish on TON.
VC Interest and Investment in the Next Solana Killer: Venture capital continues to flow in to find the next possible Ethereum or Solana killer. Mathematically, this is obvious: if you can find a project that will return 1,000x in the next few years, investing in it is like finding a golden ticket in a chocolate bar. There are currently more than 10 L1s with almost no activity, but they are still trading with market capitalization valuations (FDV) in the $1 billion range. This in itself is a huge return for any VC. This strategy works - until it doesn't. So invest until it doesn't work anymore.
Gen Z L1s are the talk of the season: Projects like Monad and Berachain are the current buzz, while SUI and Base are also on the radar. In contrast, older generation chains like Aptos, SEI, and TIA (Millennial L1s) are slowly losing steam, while even older chains like Polygon, Algorand, and Cosmos are fading from view as quickly as your New Year’s resolutions. Yes, occasionally we see price surges driven by market movers and new narratives — look at FTM and AVAX — but these are usually as fleeting as Snapchat stories. If you could show me a standout application on one of these chains that has captured the public’s attention (like GMX, Hyperliquid, Polymarket, or Friend.tech), I might reconsider.
Specialization of niche chains: We are witnessing the specialization of chains towards specific niche markets: Solana focuses on memes, payments, and transactions, Ronin focuses on GameFi, and Arbitrum focuses on DeFi. This trend, coupled with chain abstraction and cross-chain solutions, is improving the user experience and making interactions smoother.
Shift to B2B infrastructure and service providers: Some OG chains are starting to offer CDKs, SDKs, rollups, and app chains. While this may keep their tokens relevant, it feels more like a stopgap measure — great for continuing to enjoy a luxurious life, but not really helping the sustainability of the ecosystem.
In summary, while Ethereum is struggling with an identity crisis like a teenager with an uncertain haircut, Solana is forging ahead, driving innovation and community engagement. It will be very interesting to see how these dynamics evolve and which projects can truly stand the test of time as they move forward.
IV. Project and Founder
The grim reality of crypto fundraising: Let’s face it — most projects are dying a slow and painful death in the crypto wilderness. Gone are the glory days when all it took was a shiny PowerPoint presentation to attract funding like a disco ball. Today, it’s like trying to sell ice to an Eskimo — good luck!
Funding Cycle: The Never-Ending Hamster Wheel: Funded projects are not much better. They are stuck in a hamster wheel of burning money. Once they run out of money or are seriously low on it, they either raise more money or launch a token. If the token is successful, they may be able to survive for another 2-3 years; if not, they have to start all over again. With no new users or real revenue, the road to profitability is like driving down a deserted country road on a foggy night.
New projects are rising: Old projects are like the toys that no one wants to play with anymore. Why invest in something that is outdated? New options like SUI, Aptos, Berachain, and Monad are offering grants to attract investors. It’s no different than the past, it’s just old wine in new bottles — and the bottles may not even be fresh anymore.
Ponzi Scheme 2.0: Then came the Ponzi schemes, and they seem to keep popping up like mushrooms after rain. This reminds me of the Celsius and BlockFi days, when lending got out of control and led to a catastrophic crash. Now, we see similar cycles - staking, re-staking, and "your tokens generate my tokens, and together we generate yield!" - but this time on multiple chains at 10x the scale. Where does it end? No one knows!
The technical founder’s dilemma: Most technical founders seem oblivious to the fact that cryptocurrency is a completely different space. They are usually unaware that buzzwords like token economics, product-market fit, and community building are critical to success. It’s not enough to just have a great product; you need a large network and a bit of luck to make it work. If you’re not in the right VC circles or don’t belong to the “KOL mafia”, then good luck to you.
In short, cryptocurrency is a strategy game, and if you want to play, you better know the rules, otherwise you might become another cautionary tale in the cryptocurrency world.
5. Venture Capital Funds
A year for VCs navigating the crypto mire: Let’s face it — most VCs had a tough year: they either entered the market too early and watched their investments depreciate, or invested this year only to find out that they have to wait 12-18 months for their tokens to vest. In crypto timescales, that’s like waiting for a snail to finish a marathon!
A Few Smart Players: However, there are a few VCs who play this game like chess masters. They help projects go public at high prices with fully diluted market capitalization (FDV), hedge their risks, and then buy back at low prices when the token price hits the bottom. It's like buying an expensive suit at a discount after a fashion show - the key is when to hold and when to sell!
The Race to Revenue: Most VCs have finally realized that there are projects that can generate actual revenue — like Friend Tech, Pump Fun, and Polymarket. Now, almost everyone is racing to catch the next big trend. The challenge is to sort out the winners and losers from the crowd — there are over 100 alternatives to Pump Fun alone! Imagine being in a networking event where everyone in the room is trying to stand out.
Liquidity Conundrum: Liquidity providers are becoming the new darlings of the cryptocurrency world as projects desperately need more total locked value (TVL) and funds to successfully launch their tokens. Looking back on the year, it’s hard to ignore that most liquidity funds have underperformed Bitcoin — unless they’re well-versed in trading meme coins or crypto stocks.
Meme coins are out of reach: Regulated funds cannot get exposure to meme coins, and unfortunately, the entire crypto market has almost revolved around meme coins this year.
LP interest is rising: LP interest is gradually rising, but they are waiting to see more "drama" developments. I have talked to some wealth managers and family offices in Asia. After the launch of ETFs, there is indeed interest, but they need a trusted team to manage their funds, and they will back off whenever there is some shocking news, hacks or scams.
Summary: Although the overall environment is difficult and challenging, those who have firm beliefs may be able to find a path to success in this crypto chaos.
6. Narrative
AI projects occupy the largest share of mental space: everyone seems to be building a decentralized computing network, just as everyone is working to improve L1/L2 TPS. But I am optimistic about the combination of AI and encryption. I look forward to communicating with founders in this field and providing guidance. Everyone, please contact me if you need any help.
The most frequently asked question is: What do you think is the next narrative? Everyone wants to invest in or build the next short-term narrative.
Asia leads crypto development: Asia has as many developers, founders, and VCs as the West. In contrast, Singapore, Dubai, and Hong Kong have much clearer regulations than the West. Everyone I talk to wants to enter the Asian market. There are more young people here, the demand is more urgent, and the adoption rate is higher. If you need strategic help or distribution support in Asia, feel free to contact me, this is my strength.
Perpetual contract narrative returns to the stage, Hyperliquid leads the way: Perpetual DEX has hardly received any attention since GMX, except for HyperLiquid. Everyone is waiting for its listing, and some even claim that its market cap could reach $100 billion after full dilution. This may set the tone for other innovative perpetual contract platforms and allow them to perform well.
RWA (Real World Assets) is another focus for us and the entire industry. Helium and Solana are currently leading this track. Helium has over 750,000 subscribers through extended home Wi-Fi signals, working with telecom companies to share coverage, amazing real-world applications.
You can't kill the memecoin craze: we are gamblers at heart. Although memecoins have been quiet recently, they are still here to stay. Every pullback in major memecoins such as WIF, POPCAT, BONK, PEPE, MEW, GIGA, SUN, MOTHER is a buying opportunity. Some of the memecoin infrastructure we invest in has the potential to generate real income, and we have already made many deals in this area.
Chain abstraction is exciting as an infrastructure solution. However, there were so many participants at Token 2049 that I didn't see a clear winner yet. But for me, the use case is clear - allowing users to transact on multiple chains without knowing they are on a blockchain. I am very bullish on simple chain abstraction infrastructure for developers. Everyone, contact me.
The Bitcoin ecosystem seems to be slowing down: although there is a lot of activity and discussion, it is not as popular as last year. There is still a lot of confusion in the entire ecosystem, and it is still a long way from real applications and good user experience.
Staking and re-staking momentum is weakening: Too many on-chain derivatives are causing ecosystem fragmentation and risk. I am not optimistic about this space. The representative of staking, LIDO, seems to have encountered a curse and people are starting to shift their attention. I don't have much expectations for this whole system of staking/re-staking, but if I see interesting projects, I will keep an open mind.
7. Winners and Losers
Sol is the clear winner - one chain to rule them all, followed by ETH, and TON is close behind with huge potential.
TON and SUI currently have the highest interest among all L1s, and TON comes with 800 million users ready to be tapped. I'm betting money on TON, and I think SUI is just a temporary thing, just like Millennium Chain before it. SUI's fully diluted market cap is close to the $25 billion cap, and that's about it. If you are developing a project on TON, contact me. I am currently evaluating several very interesting TON apps and mini-apps.
TAO/Bitensor is one of the most talked about projects and my favorite in the AI field, definitely the winner in this category. Render is another project I like.
Binance may cause market shock when CZ debuts. But BSC needs to create a meme like Justin instead of listing the wrong project "Neiro".
$Mother is the biggest meme coin of all time and I think Izzy did a great job promoting it. I haven't seen any celebrity do it as hard as she did.
Hyperliquid is making a splash: with a slick user interface, it's quickly becoming the exchange of choice for many. Opinions are polarized - some love it, some hate it. Traders are also transparent: some are holding large points, betting on the token's listing. It's hard to predict how it will perform initially, but it's definitely worth keeping an eye on!
Liquidity for new projects will be an issue: there are over 40 great projects coming to market in Q4, with another 100+ on the sidelines. We are talking about over $20B in new fully diluted market cap. If people are going to buy into projects like Monad and Berachain, they have to sell Millennials and older generation L1s. I don’t think there is enough liquidity in the market, and many projects and their communities will suffer as a result.
GameFi still hasn't taken off: People don't seem to be excited about GameFi anymore. But I think GameFi will recover at some point. Some of the projects we invested in last year did well, but there are no new GameFi investments this year. I like Ronin.
