Will the Web3 industry regress? I think it will, but more like a partial regression rather than a complete one. 📉➡️📈

Web3 hasn't been a straight upward trajectory over the past few years; it's always been expanding on one side and clearing out on the other. Some projects will fail, narratives will collapse, and funding will retreat periodically. So, what you see as "regression" is often just the bursting of bubbles. But from a broader perspective, the industry hasn't returned to the starting point; instead, it's moving toward greater compliance, institutionalization, and infrastructure development. The EU's MiCA regulation is establishing unified rules for digital assets, indicating that crypto is beginning to be incorporated into formal financial regulatory frameworks rather than being left to grow wildly on its own.
What might truly regress are two areas. First, projects that rely solely on hype—those without users, revenue, or products—will find it increasingly difficult to survive. Second, the wild growth driven by retail investor sentiment is slowing down because regulations are tightening, platforms are cleaning up, and institutions are placing more emphasis on compliance and real business. Unlike a few years ago, when any story could attract investors, now the market is more cautious. Chainalysis also mentioned that global regulatory actions will accelerate significantly by 2025, and the market is moving from a fringe state toward regulation.
However, some foundational elements will not regress, such as stablecoins, custody, compliant trading, institutional entry, payments, and asset tokenization. In Europe's adoption trend, traditional financial institutions and payment companies are proactively offering digital asset services, indicating that the industry isn't disappearing but evolving into a more mature way of operating.
Another reality is that funding hasn't completely left. In Q1 2025, financing related to Web3/crypto saw a clear rebound, and overall global venture capital also increased year-over-year in 2025. Although a large portion of funds are now more focused on AI, this doesn't mean Web3 is no longer attracting investment. Instead, the market is now willing to fund fewer projects, but larger and more tangible ones.
So, more accurately, it's not whether Web3 will regress, but whether it will shift from the "storytelling era" back to the "proof-of-actuality era." The likely answer is yes. Those who survive in the future won't necessarily be the loudest hype creators but those who can demonstrate user base, cash flow, compliance capabilities, and real-world use cases.