The brutal reshuffle of the crypto market in 2024–2025: Bitcoin hits new highs driven by Wall Street, ETF sizes soar, but altcoins face liquidity drought. Starting from the same $10, some turn into $28, while others are left with only $1.2. The market is experiencing a coming-of-age ceremony of “truth over falsehood.” This article is based on an original piece by SoSo Value, organized, translated, and written by PANews.
(Previous summary: Galaxy Digital: After removing inflation, Bitcoin has never truly broken $100,000)
(Additional background: Sentora Research: Bitcoin may challenge $150,000 in 2026! Three key catalysts are brewing)

Table of Contents

• 1. The Wall Is Up: “Asset Boundaries” in the ETF Era
• 2. The “Shadow Game” in U.S. Stocks: Fire Inside the Wall, Ice Outside
  • 2.1 The Directed Siphoning of “Digital Asset Treasury (DATs)”: Only extracting BTC, no spillover downstream
  • 2.2 Circle (CRCL)'s Compliance Frenzy and Disparity: The excitement stays on Nasdaq
• 3. Collapse of Old Narratives and the Dusk of “VC Coins”
  • 3.1 Naked Humiliation: The Reversion of Layer 2 Value
• 4. The Illusion of Memes: Safe Haven or Meat Grinder?
  • 4.1 Survivor Bias and 80% Retracement
  • 4.2 Politicians and Celebrities as Money Pumps
• 5. The Shadow of Giants: Systemic Importance and Responsibility Vacuum
  • 5.1 Casinos Take All the Money on the Table
  • 5.2 The Alienation of Infrastructure: Bloodsucking, Black Boxes, and Political High Stakes
  • 5.3 “Industry Leaders”’ Political High Stakes
• 6. The New World After the Great Divergence—Rebuilding Value in Certainty
  • 6.1 The “Rise” of Stablecoins: From “Deposit Channels” to “Borderless Cash”
  • 6.2 On-Chain Finance’s “De-Black-Boxing”: Rewriting Risks from “Credit” back to “Rules”
• Final Words

The winter of 2025 feels colder than previous years—not just in temperature, but in the sudden drop in the perceived warmth of the crypto market. If you only follow the news, it seems lively: Bitcoin repeatedly hits new highs under Wall Street’s escort, ETF sizes skyrocket, regulatory winds in various countries seem to turn warmer, and even the US President’s pardon for CZ briefly becomes a hot topic in global politics.

However, shifting your gaze from Bitcoin to the broader “Altcoin Realm” reveals a suffocating silence. The once firm belief that “just being in the car can make you rich” has vanished, replaced by confusion as accounts silently shrink.

This is not an ordinary bull-bear cycle but a delayed “coming of age” for the crypto industry. Over these long two years from 2024 to 2025, the market has undergone a brutal “truth over falsehood” purge: bubbles burst by regulation, old myths of wealth creation are thoroughly discredited.

To see the truth clearly, we conducted a simple, crude experiment at the start of 2024: suppose you invested $10 across various sectors (L2, Meme, DeFi, etc.)—what would happen by the end of 2025?

Two years later, the answer is clear: starting from the same $10, some assets grow to $28, others dwindle to only $1.2.

Figure 1: The two-year returns of the SSI Crypto Index show extreme divergence: CeFi and PayFi surged over 150%, while GameFi and Layer2 retraced over 80% (Source: SoSoValue))

Why is this happening? Because once the gate opened, the crypto world began to split.

1. The Wall Is Up: “Asset Boundaries” in the ETF Era

“Capital is no longer a blind flow; it is strictly constrained by pipelines.”

To understand the current market, we must go back to January 10, 2024: on that day, the US SEC approved the listing of a spot Bitcoin ETF.

At that moment, cheers masked a brutal reality: capital was “隔離” (isolated).

Before the ETF era, crypto market capital flows resembled a downward “waterfall.” Funds entered through “fiat – stablecoin – exchange” channels, all within the same native crypto account system. When Bitcoin rose, creating a “wealth effect,” capital could frictionlessly flow into riskier Ethereum, then spill over into altcoins, forming the classic “sector rotation.”

The ETF changed this transmission chain. Traditional capital can now hold crypto exposure within brokerage accounts, with underlying assets continuously buying and custody of spot Bitcoin; but its trading, risk, and compliance boundaries are packaged inside the product structure, with capital mostly staying within a “buy-hold-rebalance” compliant closed loop, making it difficult to naturally reallocate to exchanges—stablecoins—on-chain risk assets. The result: Bitcoin gained more stable marginal buy-in, while the old cycle of “Bitcoin profits spilling out to drive altcoin seasons” clearly failed in this cycle.

1.1 Inside the Wall: The “Asset Boundary” Is Ruthlessly Established

The approval of a spot BTC ETF in 2024 means traditional financial capital has officially entered the crypto market; but it also establishes a clear “configurable asset boundary”: only a very few assets can get a pass into the wall.

By 2025, this institutionalization deepened. On September 18, 2025, the SEC approved a common listing standard for “Commodity-Based Trust Shares” to simplify the listing process for qualifying commodity/digital asset ETPs.

Note: This does not mean “all coins can be ETF,” but rather that the “categories that can enter the wall” are explicitly defined as standardized financial products—boundaries are clearer.

Even with the pass, capital voting is highly “偏科” (biased): Wall Street’s money mainly favors BTC, with some allocation to ETH, and other targets mostly hold tentative positions.

SoSoValue ETF dashboard data reveals this bias:

• BTC: Total ETF assets approximately $115 billion, becoming the absolute “macro asset” within the compliant channel.
• ETH: Total ETF assets about $18.2 billion, with a presence but significantly behind in scale.
• When assets like SOL, XRP, DOGE gradually enter tradable compliant containers in 2025, the data remains cold: they enter the “configurable asset pool,” but this does not automatically mean a “capital flood.” The logic inside the wall is not “narrative,” but “risk weighting.”

Chart 2: Clear preference for compliant capital: Bitcoin dominates, others are not scaled—distribution of US spot crypto ETF assets, source: SoSoValue)

Further, looking at the ssiMAG7 index( of the top 7 coins), despite the index closing at $18.4, up 84%, a deeper look reveals it’s not a broad rally but a masked structural differentiation:

• Driven by specific catalysts: XRP (+216%) and BNB (+181%) achieved significant excess returns, vastly outperforming BTC (+90%). The former benefited from regulatory uncertainty removal, the latter from market share monopoly dividends. Assets with clear “compliance” or “business barriers” are the core drivers of the index’s rise.
• Market benchmark established ( dominated by compliant capital ): BTC (+90%) acts as the “anchor.” As the absolute core of compliant capital, it set the “passing line” for this bull cycle. Although less explosive than XRP/BNB, as the core holding with 32% index weight, it represents the market’s baseline.
• Technical assets’ premium diminishes: Once seen as “the twin giants of public chains,” SOL (+23%) and ETH (+16%) performed mediocre over two years, barely beating risk-free rates; veteran public chain ADA (-34%) even posted negative returns.

Chart 3: MAG7 component returns show extreme differentiation: compliant and monopoly assets vastly outperform, while public chain narratives lose excess returns (source: SoSoValue)

This differentiation breaks the past “blue-chip broad rally” market norm. The current bull is not a simple Beta rally but a brutal “structural filtering”: capital shows high selectivity, concentrating on assets with regulatory certainty, market monopoly, or macro attributes, while public chain assets relying solely on “ecosystem narratives” are losing valuation support**.

This is especially evident in the ssiLayer1 index (at $12.30, up 23%). Excluding BNB’s influence, ETH, which accounts for over half the weight, actually drags down the sector’s performance. Data indicates that alpha (excess returns) in infrastructure tracks has significantly converged, and the simple “infrastructure expansion” logic can no longer generate excess capital market premiums**.

This reveals a cold reality: institutional capital’s allocation logic is no longer “sprinkling pepper,” but an extreme “selective admission.”

The “inside-the-wall” capital also shows high consistency: they heavily allocate to core assets with regulatory certainty or monopoly barriers (like BTC, BNB, XRP), while maintaining only “defensive allocations” to public chains (ETH, SOL) relying on “technological narratives.” Long-tail assets (most altcoins outside the wall) face systemic liquidity drought.

2. The Shadow Game in U.S. Stocks: Fire Inside the Wall, Ice Outside

If ETFs have reserved stable allocation capital, then the “crypto concept stocks” inside the U.S. stock market have drained active risk capital.

A phenomenon that deeply disorients seasoned crypto investors: Why is the Nasdaq’s crypto sector so hot, while on-chain ecosystems are so cold?

Chart 4: Risk capital shifts to U.S. stocks: crypto concept stocks strengthen, on-chain assets like Layer2 continue bleeding (source: SoSoValue)

The answer is substitution effect: Wall Street has turned “crypto trading” into a “shadow game of tickers.” Capital completes speculation within the USD → Nasdaq loop, rather than flowing into on-chain ecosystems.

2.1 The Directed Siphoning of “Digital Asset Treasury (DATs)”: Only extracting BTC, no spillover downstream

Represented by Strategy (MSTR), listed companies weave a narrative of “asset-liability Bitcoinization.” For retail investors, buying MSTR is like buying a “leveraged Bitcoin option.”** This money indeed becomes on-chain purchasing power, but it’s an extremely exclusive one. Every dollar of financing MSTR raises in the U.S. stock market flows precisely into Bitcoin (BTC). This mechanism acts like a huge “one-way siphon”, continuously pushing Bitcoin’s price higher but thoroughly cutting off the possibility of capital spillover downstream (L2, DeFi).

The harsher reality is the imitators’ fate: when more companies try to replicate the “MicroStrategy myth,” putting ETH/SOL into treasuries, the U.S. market often shows cold reception: the market votes with its feet, proving that in Wall Street’s eyes, the only “digital gold” on the balance sheet are still mainly BTC and ETH, while most DATs of altcoins are just large financing plans announced, with the stock-to-coin transition used to create asymmetric information, describing unrealizable financing as imminent buy pressure for altcoins, and using it as an exit route.

Chart 5: Market cap vs. mNAV of listed crypto asset reserve companies (source: SoSoValue)

2.2 Circle (CRCL)’s Compliance Frenzy and Disparity: The Excitement Stays on Nasdaq

Circle’s IPO reflects traditional capital’s strong demand for “compliant crypto exposure.” Public data shows that CRCL peaked at $298.99 in June 2025, with a market cap of $70.5 billion.

Chart 6: Circle’s peak market cap exceeded $70 billion at IPO (source: SoSoValue)

This indicates Wall Street’s genuine desire for a “compliant stablecoin narrative.” But subsequent sharp declines (shareholder reduction) and high turnover also show: the market treats it as a trading chip in U.S. stocks, not as a “carrier” to transfer hot money into on-chain PayFi protocols.

Similarly, assets like Coinbase (COIN) are often assigned a “scarcity premium”: because in the U.S. stock market, it’s one of the few truly compliant “crypto exposure containers.”

Whether ETF or DATs/coin stocks, they form two huge “breakwaters.” Capital circulates within the USD → Nasdaq → BTC loop.

The hotter the U.S. stock market, the more intense the unilateral accumulation of BTC, while other on-chain ecosystems (alts) become like a forgotten wasteland—people watch Bitcoin’s frenzy from the shore but are unwilling to jump in and feed the small fish.

3. Collapse of Old Narratives and the Dusk of “VC Coins”

“When the tide recedes, we find that not only speculators are swimming naked, but also the infrastructure of grand narratives.”

If Nasdaq’s “crypto shadow stocks” are enjoying liquidity feast, then the collapse of on-chain “infrastructure” sectors is a silent disaster caused by water scarcity.

In the past two cycles, the most consistently profitable business model in crypto was “VC setup—technological narrative—overvalued financing—IPO.” This was also the foundation of the prosperity of Layer 2, GameFi, and NFTs. However, SoSoValue SSI index’s cold data proclaims the bankruptcy of this model.

3.1 Naked Humiliation: The Reversion of Layer 2 Value

Let’s look at some shocking data (using January 2024 as the $10 baseline):

• ssiLayer2 index: $1.22 (down about 87%);
• ssiGameFi index: $1.47 (down about 85%);
• ssiNFT index: $3.2 (down about 68%).

Chart 7: Layer2, GameFi, NFT indices retraced 68%–88% over two years, collective failure of narrative-driven sectors.

Two years, from $10 down to $1.2, means that if you believed in “Ethereum Layer 2 explosion” at the start of 2024 and held till now, your assets are nearly wiped out.

Why?

Most of these projects launched with extremely high FDV (fully diluted market cap), but initial circulating supply was very low. During 2024–2025, massive token unlocks hung like Damocles’ sword overhead. Every day, millions of dollars worth of tokens are released from VC and team holdings into the secondary market.

In a context of scarce incremental capital, these tokens are no longer “stocks” but “liabilities.” Crypto “investors” finally wake up: they are not buying future tech ecosystems but liquidity for exit in the primary market.

The $1.22 of the ssiLayer2 index is the merciless pricing of “supply-only, demand-nonexistent” air infrastructure. How severe is this oversupply? According to L2BEAT data, by 2025, over 100 active Layer 2 networks exist. Excluding the top few projects, the remaining 90+ chains are like deserted ghost towns, yet they still carry hundreds of billions in diluted valuation.

This marks the complete loss of trust in the VC-led “low liquidity, high valuation” harvesting model.

4. The Illusion of Memes: Safe Haven or Meat Grinder?

“People have escaped the scythe of complexity but jumped into an even bloodier arena.”

Under the collapse of VC coins, Meme (meme coins) seem to be the only bright spot in 2024–2025. Amid countless communities’ shouts, memes are portrayed as the people’s asset against Wall Street and VC.

SoSoValue SSI Meme index at the end of 2025 appears to confirm this: $9.98.

Chart 8: From January to December 2024, the SSI Meme index surged over 350%, but at the peak, it fell nearly 80%, returning to the starting point (source: SoSoValue)

It looks like the only sector that “outperformed” altcoins and preserved principal over two years. But don’t be fooled. Behind this $9.98 lies the most brutal game truth of this cycle.

4.1 Survivor Bias and 80% Retracement

A deeper analysis shows the SSI Meme index has retraced nearly 80% from its high.

What does this mean?

It indicates that the “boom” of Meme was mainly concentrated in the first half of 2024. At that time, capital, disgusted with VC coins, retaliated by flooding into the fully diluted Meme market, pushing the index up. But by 2025, the story changed.

With the political Meme craze triggered by Trump concepts and the rampant issuance by celebrities and politicians, the Meme market rapidly degenerated from a “resistance zone” into the most efficient “harvester.”

4.2 Politicians and Celebrities as Money Pumps

In January 2025, political Meme became a market focus. This was no longer spontaneous community culture but direct monetization using political influence and attention. Reports show that many such tokens have highly concentrated ownership, with prices swinging solely on a single political event or tweet.

Meanwhile, celebrity-issued tokens have compressed “pump and dump” cycles to the extreme. Capital enters not for long-term holding but to gamble within hours or minutes.

The “principal-protected” $9.98 of the SSI Meme index is filled by losses of countless high-position entrants in 2025. It reveals a structural dilemma: Meme is not a value asset; it’s a “second-best container” during liquidity crunches.

When markets have no better outlets, capital opts for Meme with simpler rules (fully circulating) and more decisive wins/losses (no lock-up). But when sentiment recedes, Meme lacking fundamentals will fall harder than any asset. For most latecomers, it remains a dead end.

5. The Shadow of Giants: Systemic Importance and Responsibility Vacuum

“They wield shadow central bank powers but still want to keep the pirates’ freedom.”

If asset price volatility is market self-regulation, then the frequent systemic shocks in 2025 expose the extreme fragility of industry infrastructure. That year, crypto markets experienced multiple liquidations triggered by macro shocks (trade war panic, geopolitical tensions). Under stress tests, trading, payments, and settlement giants (Binance, Tether, Tron) still stand, but concerns have shifted from rumors to evidence.

5.1 The Casino Takes All the Money on the Table

Among all indices, only the CeFi (Centralized Finance) index surged to $28. Does this mean exchange technology is awesome, or service is good? Wrong. If you look at the components, BNB accounts for 88%. The cold truth: this $28 is a confirmation of “channel monopoly.” In the gold rush, miners died, only casino operators and shovel sellers profited.

Chart 9: Excess returns in CeFi are highly concentrated in BNB, with a 181% surge (source: SoSoValue)

5.2 The Alienation of Infrastructure: Bloodsucking, Black Boxes, and Political High Stakes

Focusing on these three giants reveals a common dangerous trend: they are sacrificing neutrality (bloodsucking) and seeking political asylum (high stakes) to sustain their shaky empires.

2. Binance: From “Service Provider” to “Vampire”

As the liquidity king, Binance, in 2025, begins sacrificing its neutrality as an infrastructure to maintain high profits.

• The fall of token listing logic (Meme transformation): To address liquidity droughts of VC coins, Binance aggressively shifts to a “Meme economy,” listing many high-volatility assets lacking fundamentals. The exchange, from a value discovery venue, becomes a “toxic asset” distributor, training users into high-frequency speculators to maximize fees.
• The black box of technology (10.11 liquidation): During the October 11 crash, Binance’s margin engine relied on on-site prices rather than external oracles, causing USDe and other assets to decouple, triggering billions in erroneous liquidations. Although a $300 million compensation fund was later set up, this “spending to dispel disaster” attitude and refusal to accept legal responsibility expose its privatized central bank arrogance—when the referee makes mistakes, users can only pray for “mercy,” not rely on rules and fairness.
• Market maker collusion risks: Investigations into projects like GPS, SHELL show multiple market makers on Binance suspected of manipulating new coin prices. Although penalties were imposed, this only reveals a tip of the iceberg of internal conflicts.

2. Tether: The Unregulated “Private Empire” Tether (USDT) remains the “shadow dollar” of crypto, with unmatched dominance. But this dominance is built on increasingly opaque foundations.

• The audit mystery: Despite profits surpassing Wall Street investment banks, Tether refuses to undergo thorough legal audits, only providing snapshot “attestation reports.” This leaves open the possibility of fund misappropriation before or after the snapshot.
• The “weaponization” of the balance sheet: Tether established “Tether Evo,” leveraging user reserves to build a private empire spanning neurotechnology, agriculture, and even football clubs (Juventus acquisition). It exploits privileged access to public infrastructure to evade regulation risks of a single stablecoin business. This “too big to fail” structure itself is a huge moral hazard.

2. Tron: The “Settlement Highway” of the Gray Economy

If Binance is an exchange, Tether is a central bank, then Tron (波场) is the de facto “underground SWIFT.”

• USDT monopoly: 2025 data shows Tron network carries 50% of global USDT circulation, becoming the preferred settlement layer in Southeast Asia and sanctioned regions.
• Money laundering hotbed: This efficiency comes with huge compliance black holes. Investigations show that although Huione Group was sanctioned, its related wallets processed nearly $1 billion in funds on Tron. The larger the scale, the more obvious its role as an illegal financial highway.

5.3 “Industry Leaders”’ Political High Stakes

The most disturbing trend is not the grayness of business but industry “leaders” attempting to “buy rules.”

• Sun Yuchen’s “Pledge of Allegiance”: Facing potential secondary sanctions on Tron and its supernodes, Sun Yuchen demonstrated high political opportunism. He tried to repackage Tron as a Nasdaq-listed company via reverse merger for legal protection; in 2025, he invested $75 million into Trump’s “World Liberty Financial” (WLF) project. This naked political donation aims to tie a public chain’s fate to US political power.
• CZ’s “Century Pardon”: If Sun Yuchen still tries, CZ has already proved this path’s feasibility. On October 23, 2025, the White House officially announced that Trump exercised presidential pardon, pardoning Zhao Changpeng. This news caused a shock in the crypto world even surpassing Bitcoin’s new high. It marked the end of the DOJ’s years-long regulatory crackdown, ultimately nullified by top political intervention.

Is it a talisman or a death sentence?

Sun Yuchen and CZ essentially turned the originally technically neutral crypto infrastructure into political chips. They have fully bet their fortunes on Trump’s family. This deep entanglement can buy a “get out of jail free” card for four years but also pushes them into the absolute opposition of the Democratic Party and establishment. Political pendulums always swing back. When the wind shifts, this fragile balance built on “political protection fees” may face even fiercer reckoning and backlash.

The lesson of 2025: the market begins to realize that mere “size” is not enough.

With ETF entry, Circle’s listing, and traditional financial capital’s watchful eyes, crypto giants that rely on “transparency” and “public responsibility” will eventually be replaced by more compliant competitors (like Wall Street-issued stablecoins, regulated exchanges).

The ssiCeFi index’s rise may represent the end of a decade of “barbaric growth,” but it does not determine the future direction of crypto for the next ten years.

6. The New World After the Great Divergence—Rebuilding Value in Certainty

“The old world’s foundation is loosening, and the new world’s outline is still unclear.”

Facing the fractured landscape at the end of 2025, a sharp question confronts all industry participants: outside the wall, traditional capital is eager but blocked by ETFs and Nasdaq concept stocks; no matter how lively Nasdaq gets, on-chain liquidity remains scarce; inside the wall, our survival infrastructure either greedily sucks retail liquidity or engages in high-stakes political gambles.

Has this industry reached its end?

For those used to the wild days—funding via whitepapers, hype stories—this end is suffocating. The so-called “cryptocurrency” as a speculative symbol is receding.

But for financial historians, this is precisely the darkest hour before dawn. Every “death” is for a “rebirth.” Standing at the end of 2025, that experiment starting at $10 has stripped away noise. We see that the term “cryptocurrency” is fading, replaced by “on-chain finance.”

Two years of turbulence and differentiation have thoroughly reshaped the entire skeleton of the crypto industry. When bubbles burst, we see that future value is no longer defined by narratives but reconstructed through two dimensions of “certainty”: useful money (stablecoins) and honest ledgers (on-chain finance).

6.1 The “Rise” of Stablecoins: From “Deposit Channels” to “Borderless Cash”

In the past, we saw stablecoins as “tickets into the crypto world”: fiat exchanged for USDT/USDC, entering exchanges, completing speculation. By 2025, the meaning of stablecoins is gradually shifting from “crypto tool” to “digital embodiment of the dollar.” Its core is no longer blockchain but the dollar re-entering the world in a new way.

If Bitcoin was the first “digital gold” accepted by mainstream finance, then stablecoins are the second, truly accepted “digital cash.” They do not require users to understand decentralization, only to feel a simple advantage: faster, cheaper, less hassle than banks.

The rise of PayFi tracks this logic: it’s not about hype but solving traditional finance pain points to gain premiums. In countries with inflation or foreign exchange controls, stablecoins grow driven by reality: traditional bank transfers are slow, costly, and sometimes funds are frozen without reason. Stablecoins offer an alternative without “human barriers.”

Thus, this is a competition about “USD distribution efficiency.” Whoever can deliver USD to those who need it at lower thresholds and costs becomes the new infrastructure. Stablecoins “break out” of bank walls, becoming a universally usable component that can flow 24/7. You don’t have to see it as a Trojan horse, but you must recognize its real significance: stablecoins are the upgraded form of USD in the digital age. Their expansion is not by slogans but by solving real-world inefficiencies and obstacles.

6.2 On-Chain Finance’s “De-Black-Boxing”: Rewriting Risks from “Credit” back to “Rules”

If stablecoins solve the “funds transfer efficiency” problem, then on-chain finance and prediction markets are reconstructing the two core dimensions of finance: Credit and Information.

In the past two years, systemic risks in centralized entities (CeFi) are essentially “abuse of discretion.” When clearing, settlement, custody are all in opaque databases, managers have a god’s eye view to modify ledgers. Under this mechanism, “risk control” often becomes a shield for specific interest groups.

The value of on-chain finance lies not in ideological “decentralization” but in “execution certainty.” Take Hyperliquid and other leading protocols: they embed liquidation logic and risk parameters into immutable smart contracts. This means: financial rules are no longer malleable clay in the hands of managers but are like physical laws that must be obeyed. Market participants no longer need to pray that the platform “behaves well,” only verify that the code “runs according to rules.” This marks the evolution of financial risk management from “trust-based game” to “code-based engineering.”

Similarly, in the information domain, prediction markets in 2025 have undergone a key transformation: shedding the label of “online gambling,” they evolve into “event derivatives exchanges.”

Information pricing mechanisms: from “opinion inflation” to “efficient markets”

• In an era of AI-generated noise and biased media, opinions are the most inflation-prone assets, while truth is a scarce hard currency. Polymarket’s core mechanism is not simple “voting,” but “arbitrage based on informational advantage.”** For example, during the 2024 US elections, traditional polling agencies relied on slow phone surveys, while traders with exclusive data (like the famous “French whale”) employed professional teams for neighborhood surveys and heavily bet on the market. This mechanism forces participants to pay “information verification costs.” In a pool of billions of dollars, principal acts as a filter for noise—emotional venting is instantly drowned out,**** only signals verified by real money can determine prices. This makes prediction markets the current “highest signal-to-noise” information discovery tool in society.

Deepening of financial functions: macro hedging and parameterized insurance

A more profound change is that prediction markets are standardizing “uncertainty events” in the real world into tradable financial assets.

• A new benchmark for macro risk management: institutional investors start using prediction markets to manage macro risks. For example, for Federal Reserve rate decisions (FOMC), investors no longer rely solely on high-threshold government bond futures but use prediction market contracts for more precise cross-market arbitrage. This improves capital efficiency and provides sharper macro expectations than traditional surveys.
• Inclusive “Parameterized Insurance”: as Robinhood shows, buying “Houston rainfall” contracts is essentially a decentralized micro-insurance. It breaks the high claims costs and black-box clauses of traditional insurance—users bet against specific tail risks (extreme weather, flight delays, policy shifts). When events trigger, smart contracts automatically pay out. This signifies that risk hedging has descended from Wall Street into everyday life.

The progress of human financial history is fundamentally a process of reducing transaction costs. On-chain finance eliminates “trust intermediaries,” prediction markets eliminate “information noise.” The future financial world will see black boxes broken by code, and truth priced by capital.

Final Words

“Coming of age is never a celebration; it’s a forced growth process.”

This cycle has no broad rally, only filtering. For every participant, the significance of 2024–2025 is that it shatters the illusion that “just being present means winning.” For relics still stuck in PPTs and unlocking curves, that $1.2 index is their final epitaph.

While we are still entangled in price fluctuations, a deeper, more ultimate transformation is quietly advancing at Wall Street’s core: according to Bloomberg, the US SEC has granted permission to DTCC (Depository Trust & Clearing Corporation) via a “non-action letter” to host and recognize tokenized stocks and other real-world assets (RWA) on blockchain**.**

DTCC is not a “crypto company”; it is the backbone of US capital market infrastructure. It disclosed that in 2024, it processed about $3,700 trillion in securities transactions.

This may be the ultimate of crypto technology. Regulation is not meant to eliminate crypto but to give it an entry ticket into the new world. It filters out scams that print fake money through tokens; it leaves behind technologies that improve asset circulation and trust.

Just as the internet eventually integrated into every corner of commerce, no longer distinguishing “online” from “offline”; future finance will no longer distinguish “on-chain” from “off-chain.” All financial activities will run on the blockchain—an even more efficient ledger.

“If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry.” – Satoshi

Whether Bitcoin can restart a bull market in 2026, we shall wait and see!

Chart 10: Comparison of annual returns of Bitcoin and major traditional assets (2016–2025) (Source: SoSoValue, compiled from public data)

Note: All data in the above charts are reconstructed using the SoSoValue index tool. This index tool simplifies and visualizes the previously expensive professional backtesting systems of fund companies, enabling ordinary investors to build their own crypto asset tracking frameworks and verify every intuition with data.