The Money Effect is disappearing, and the era of "post-encryption Twitter" is approaching.

Original Title: Welcome to Post-CT

Original author: Lauris

Original compilation: Deep Tide TechFlow

Welcome to the era of “Post-Crypto Twitter”

The term “Crypto Twitter” (CT) refers specifically to the segment of Twitter that acts as a market discovery and capital allocation engine for cryptocurrencies, rather than the broader crypto community on Twitter.

“Post-CT” does not mean the disappearance of discussion, but rather that encrypted Twitter, as a “mechanism for coordination through discourse,” is gradually losing its ability to repeatedly create significant market events.

A single culture will not be able to continuously attract the next wave of new participants if it can no longer produce enough significant winners.

The “significant market events” mentioned here do not refer to situations like “a certain token's price tripled,” but rather to the concentration of attention from the majority of liquidity market participants on the same thing. Within this framework, Crypto Twitter used to be a mechanism that transformed public narratives into a coordinated flow around a dominant meta-narrative. The significance of the “post-Crypto Twitter” era lies in the fact that this transformation mechanism is no longer functioning reliably.

I am not trying to predict what will happen next. To be honest, I do not have a clear answer either. The focus of this article is to explain why the previous patterns worked, why they are declining, and what this means for how the crypto industry is reorganizing itself.

Why did Crypto Twitter work in the past?

Crypto Twitter (CT) is important because it compresses three market functions into one interface.

The first feature of Crypto Twitter is narrative discovery. CT is a high-bandwidth salience mechanism. “Salience” is not merely an academic term for “interesting,” but a market term that refers to how the graph converges on what is currently worth attention.

In practice, encrypted Twitter has created a focal point. It compresses a vast hypothesis space into a small set of “actionable” objects at this moment. This compression addresses a coordination problem.

To put it more mechanically: Crypto Twitter transforms decentralized, private attention into visible, public common knowledge. If you see ten credible traders discussing the same subject, you not only know of the subject's existence, but you also know that others are aware of its existence, and you know that others know you are aware of its existence. In liquid markets, this common knowledge is crucial.

As Herbert A. Simon said:

“The abundance of information leads to a scarcity of attention.”

The second function of encrypted Twitter is to serve as a trust route. In the crypto market, most assets do not possess strong intrinsic value anchors that can be provided in the short term. Therefore, capital cannot be allocated solely based on fundamentals, but rather flows through people, reputations, and ongoing signals. “Trust route” is an informal infrastructure that determines whose claims can be believed early enough to have an impact.

This is not a mysterious phenomenon, but rather a rough reputation function that is continuously calculated in public by thousands of participants. People infer who the early entrants are, who has good pre-judgment, who has resource channels, and whose behavior is associated with positive expected value (Positive EV). This layer of reputation enables capital allocation to occur without formal due diligence, as it serves as a simplified tool for selecting counterparties.

It is worth noting that the trust mechanism of crypto Twitter does not solely depend on the “number of followers.” It is a comprehensive result of the number of followers, who follows you, the quality of replies, whether credible people interact with you, and whether your predictions withstand real-world validation. Crypto Twitter makes these signals easy to observe and at a very low cost.

Cryptocurrency Twitter has both public trust, and over time, certain communities have gradually formed a tendency to place more emphasis on private trust.

The third function of Crypto Twitter is to transform narratives into capital allocation through reflexivity. Reflexivity is key to this core loop: narratives drive prices, prices validate narratives, validation attracts more attention, and attention brings in more buyers, creating a self-reinforcing cycle that continues until it collapses.

At this point, the microstructure of the market comes into play. The narrative does not abstractly drive the “market”, but rather drives the order flow. If a large group is persuaded by a certain narrative to believe that a certain object is “key”, then marginal participants will express this belief through purchases.

When this loop becomes strong enough, the market will temporarily favor behaviors that align with consensus rather than the ability for deep analysis. In retrospect, crypto Twitter is almost like a “low IQ version of Bloomberg Terminal”: a single information stream that integrates significance, trust, and capital allocation.

Why has the era of “monoculture” become possible?

The era of “single culture” exists because it has a repeatable structure. Each cycle revolves around an object that is simple enough for large groups to understand, yet broad enough to capture the attention and liquidity of most of the ecosystem. I like to refer to these objects as “toys.”

The term “toy” here is not pejorative, but rather a structural description. It can be understood as a type of game - easy to explain, easy to participate in, and essentially possessing social attributes (almost like an expansion pack for a large multiplayer online role-playing game). A “toy” has a low barrier to entry and a high degree of narrative compression, allowing you to explain what it is to a friend in just one sentence.

The “meta-narrative” (Meta) is the manifestation when “toys” become a shared game board. Meta refers to the dominant strategy set and the dominant object around which most participants gather. The reason why the “single culture” is powerful is that this meta-narrative is not just “popular”, but is a shared game that spans users, developers, traders, and venture capitalists. Everyone is playing the same game, just at different levels of the stack.

@icobeast has written an excellent article on the periodicity and changing nature of “trendy things,” which I highly recommend reading.

The market system we are experiencing requires a “window of inefficiency” that allows people to quickly earn “incredible wealth.”

In the early stages of each cycle, the market is not fully efficient, as the infrastructure for large-scale participation in the meta-narrative has not yet been fully established. At this point, although opportunities already exist, the niche spaces in the market have not been completely filled. This is very important because the widespread accumulation of wealth requires a window period that allows a large number of participants to enter the market rather than facing a completely hostile environment from the start.

As George Akerlof said in “The Market for Lemons”:

“Information asymmetry between buyers and sellers can lead the market away from efficiency.”

The key is that in order for this system to operate, you need to provide a highly efficient market for a portion of the people, while for another portion, this market is a typical “lemon market” (i.e., a market full of information asymmetry and inefficiency).

A single cultural system requires a large-scale shared context, and Crypto Twitter (CT) provides such a context. Shared contexts are very rare on the internet, as attention is usually dispersed. However, when a single culture forms, attention tends to concentrate. This concentration can reduce coordination costs and amplify the effects of reflexivity.

As Hayek (F. A. Hayek) stated in “The Use of Knowledge in Society”:

“The information from those situations we must leverage has never existed in a centralized or integrated form, but is merely scattered in the incomplete and often contradictory knowledge fragments held by all individuals.”

In other words, the formation of a shared context enables market participants to coordinate their actions more efficiently, thereby promoting the prosperity and development of a single culture.

Why was the “single narrative” once so credible? When the fundamental constraints on the market are weak, salience becomes a more important constraint than valuation. The primary question for the market is not “How much is it worth?” but rather “What are we all paying attention to? Is this trade already too crowded?”

A rough analogy is that mass culture used to be able to focus attention on a few shared objects (such as the same TV shows, music on the charts, or celebrities). Nowadays, attention is scattered across various niche areas and subcultures, and people no longer share the same reference set on a large scale. Similarly, Crypto Twitter (CT) as a mechanism is also undergoing a similar transformation: the top-level shared context is diminishing, while more localized contexts are beginning to emerge in smaller circles.

Why is the era of “post-encryption Twitter” coming?

The emergence of “Post-CT” is due to the gradual failure of the conditions that support a “single culture”.

The first failure lies in the fact that the “toys” were cracked more quickly.

In previous cycles, the market has learned the rules of the game and industrialized these rules. Once the rules of the game are industrialized, inefficiency windows close faster and their duration becomes shorter. The result is that the distribution of returns becomes more extreme: there are fewer winners and more structural losers.

Memecoins are a typical example of this dynamic. As an asset class, they are effective because they have low complexity while possessing a high degree of reflexivity. However, it is this very characteristic that makes memecoins easy to mass produce. Once the production line matures, the meta-narrative becomes an assembly line.

With the development of the market, the microstructure has changed. The median participant is no longer trading with other ordinary people, but is instead in opposition to the system. By the time they enter the market, the information has already been widely disseminated, liquidity pools have been “pre-buried,” trading paths have been optimized, insiders have completed their layouts, and even exit paths have been pre-calculated. In such an environment, the expected returns for the median participant are compressed to a very low level.

In other words, in most cases, you are just becoming someone else's “Exit Liquidity.”

A useful mental model is that the order flow in the early stages of a cycle is primarily dominated by naive individual investors, while the order flow in the later stages increasingly exhibits characteristics of confrontation and mechanization. The same “toys” evolve into completely different games at different stages.

A single culture cannot sustain itself if it cannot produce enough significant winners to attract the next wave of new participants.

The second failure lies in the fact that value extraction has overwhelmed value creation.

Here, “Extraction” refers to those actors and mechanisms that capture value from liquidity rather than creating new liquidity.

In the early stages of the cycle, new participants can increase net liquidity while benefiting from it, as the pace of market expansion is faster than the rate at which the value extraction layer is harvested. However, in the later stages of the cycle, new participants often become net contributors to the value extraction layer. When this sentiment becomes widely recognized, market participation begins to decline. The decline in participation weakens the intensity of the reflexive cycle.

This is also why changes in market sentiment are so consistent. If a market no longer offers a broad and clear path to winning, the overall sentiment will gradually deteriorate. In a market where the median participant's experience is “I am just someone else's liquidity,” cynicism is often rational.

To understand the overall market sentiment of current retail participants, you can refer to @Chilearmy123's post.

The third failure lies in the dispersion of attention. When no single object can attract the attention of the entire ecosystem, the market's “discovery layer” loses its clear significance. Participants begin to differentiate into narrower fields. This dispersion is not only cultural but also brings significant market consequences: liquidity is dispersed across different segments, price signals become less intuitively visible, and the dynamic of “everyone is doing the same trade” disappears.

Additionally, there is one factor that needs to be briefly mentioned: macroeconomic conditions can affect the intensity of reflexive cycles. The era of “single culture” coincided with a period of strong global risk appetite and liquidity environment, which made speculative reflexivity appear to be a kind of “normalcy”. However, when the cost of capital rises and marginal buyers become more cautious, narrative-driven capital flows become more difficult to sustain in the long term.

What does “post-encrypted Twitter” mean?

“Post-Crypto Twitter” (Post-CT) refers to a new market environment in which Crypto Twitter is no longer the primary coordinating mechanism for capital allocation across the entire ecosystem and is no longer the core engine around which on-chain markets concentrate on a single meta-narrative.

In the era of “single culture,” crypto Twitter repeatedly and extensively linked narrative consensus with liquidity concentration. However, in the “post-crypto Twitter” era, this connection has weakened and become more intermittent. Crypto Twitter still holds significance as a discovery platform and reputation indicator, but it is no longer that reliable driving engine synchronizing the entire ecosystem around “a transaction,” “a toy,” or “a shared context.”

In other words, crypto Twitter is still capable of generating narratives, but only a few narratives can be transformed into “shared knowledge” on a large scale, and even fewer “shared knowledge” narratives can further translate into synchronous order flows. When this transformation mechanism fails, even if there are still many activities happening in the market, the overall sentiment will appear “quieter.”

This is also why subjective experiences have changed. The market now appears slower and more professional, as broad coordination has disappeared. The emotional shift is mainly a reaction to changes in expected value (EV) conditions. The market's “quietness” does not mean there is no activity, but rather a lack of narratives and synchronized actions that can trigger global resonance.

The evolution of encrypted Twitter: from engine to interface

Crypto Twitter (CT) will not disappear; rather, its functions have transformed.

In the early market system, crypto Twitter was upstream of capital flow, to some extent determining the direction of the market. In the current market system, crypto Twitter is closer to an “interface layer”: it broadcasts reputation signals, surfaces narratives, and helps route trust, but actual capital allocation decisions increasingly occur in higher trust “subgraphs.”

These subgraphs are not mysterious. They are dense networks with higher information quality and frequent interactions among participants, such as small trading circles, communities in specific fields, private group chats, and discussion spaces between institutions. In this system, crypto Twitter is more like a superficial “façade”, while the real social and trading activities occur in the underlying social network layer.

This also explains a common misunderstanding: “Crypto Twitter is declining” usually actually means “Crypto Twitter is no longer the main place for ordinary participants to make money.” Wealth is now more concentrated in places with higher quality information, restricted access, and more private trust mechanisms, rather than through public, noisy trust calculations.

Nevertheless, you can still achieve considerable gains by posting on crypto Twitter and building a personal brand (some of my friends and nodes have done this and are still doing it). But the real value accumulation comes from building your social graph, becoming a trusted participant, and gaining more access to opportunities in the “back layer.”

In other words, while surface-level brand building remains important, the core competitiveness has shifted towards the construction and participation in a “backend trust network.”

I don't know what will happen next.

I will not pretend that I can accurately predict what the next “Monoculture” will be. In fact, I am skeptical about whether “Monoculture” will form again in the same way, at least under current market conditions. The key is that the mechanisms that once nurtured “Monoculture” have deteriorated.

My intuition may carry a certain degree of subjectivity and situationality, as it is based on the phenomena I currently observe. However, the formation of these dynamics actually began to emerge earlier this year.

There are indeed some active areas at the moment, and it is not difficult to list those categories that attract attention. However, I will not mention these areas as they do not contribute substantively to the discussion. Overall, apart from presales and some initial allocations, the trend we are currently seeing is that the most overestimated categories are often those that are “adjacent” to crypto Twitter (CT), rather than directly driven by crypto Twitter itself.

argument

We have entered the “Post-CT” era.

This is not because the crypto Twitter is “dead”, nor because the discussions have lost their meaning, but because the structural conditions that support the recurring systemic “single culture” have been weakened. The game has become more efficient, the value extraction mechanisms have matured, attention has become more dispersed, and the reflexive cycles have gradually shifted from systemic to local.

The cryptocurrency industry continues, and crypto Twitter is still around. My view is more narrow: the crypto Twitter that could reliably coordinate the entire market into a shared meta-narrative and create an era of broad, low-barrier nonlinear gains has at least currently come to an end. Moreover, I believe the likelihood of this phenomenon reoccurring in the next few years is significantly reduced.

This does not mean you cannot make money, nor does it mean the crypto industry has reached its end. This is neither a pessimistic view nor a cynical conclusion. In fact, I have never been more optimistic about the future of this industry than I am now. My point is that the future market distribution and significance mechanisms will be fundamentally different from the past few years.