CoinEx founder: The end of encryption in my eyes
Author:Yang Haipo, CoinEx Founder
This is on April 10th
I. Bitcoin is a purely consensus asset
Bitcoin has no productive, no consumer value and no real monetary function. There are few long-standing precedents in history for purely consensual assets。
The analogy of gold is not valid. Gold has nearly half of the demand for in-kind consumption (jewels, industry), it has several thousand years of inter-sovereign currency functions, and it has a zero-maintenance cost — a piece of gold in a safe for 100 years without anyone to maintain. Bitcoin doesn't have any at these three points. In the era of French currency, between the sovereignty of States, gold remains the most rigid currency — the only material found by mankind to complete value storage without relying on any third party. Bitcoin relies on electricity grids, the Internet, miners and exchanges, and any link cut off is paralysed。
Bitcoin used to have a real currency function — darknet transactions, cross-border transfers, small payments. This could have been its value anchor. However, in the build-up contest, the Core team won, chose the small block route and voluntarily abandoned the payment function. At that moment, bitcoin went from being a flawed currency to being a pure consensus speculator. The subsequent presence of institutions, ETFs, was simply a continuation of a functional asset。
The security budget is a self-destruct mechanism. Block incentives continue to halve to close to zero, and cybersecurity ultimately depends entirely on transaction fees. But there is an inherent contradiction in the security model of holding on to the value narrative and requiring transactional fees。
THE PRICE OF BITCOIN SUCCESSFULLY COVERED IT UP. PRICES ARE THE STRONGEST SIGNAL OF THE MARKET, AND THE VAST MAJORITY OF PEOPLE ARE UNABLE TO RESIST. PRICES CREATE PATH DEPENDENCY -- BECAUSE OF THE RISE, THERE'S AN ETF, THERE'S AN INSTITUTIONAL HOLD-UP, THERE'S A "BIG-TO-FAIL" NARRATIVE. BUT THE VERY FOUNDATION OF THE CHAIN IS CONSENSUS, AND ONCE PRICE TRENDS ARE REVERSED, THE SAME CHAIN IS SELF-ACCELERATED。
An encrypted currency will not be completely zero — free trade, counter-censorship, unlicensed transfers still have some value in themselves, which will provide it with a base far below current prices. But a significant collapse from the current high of trillions of market value is inevitable。
II. Negative and system-based first principles
Only one equation is required to understand the system:
Net inflows = historical consumption + bond balance
There are only two places where the money enters the system: either it is consumed (electricity, wages, rent, lawyer fees, personal waste); it leaves the system permanently; or it is still in the system (stabilizing currency + balance of French currency, i.e. security). No third place to go. All of the numbers in this paper are essentially filled with variables in this equation from different paths。
The entire system consumes approximately $35-50 billion annually, and the boom period is likely to be even higher: about $10-15 billion (electricity, machines, facilities), about $15-25 billion (human, cloud services, compliance, market outreach), billions of dollars for project operators and several billion for other surroundings。
THIS SCALE CAN ALSO BE VALIDATED BY INVERTING THE NUMBER OF PRACTITIONERS. THE GLOBAL ENCRYPTION INDUSTRY HAS ABOUT 1.6 MILLION BROAD PRACTITIONERS (2025), BUT A LARGE NUMBER OF THEM ARE PART-TIME PARTICIPANTS, KOL, CAREER TRADERS, ETC. THERE ARE ABOUT 100,000 AND 200,000 CORE PRACTITIONERS WHO ACTUALLY RELY ON THE ENCRYPTED MARKET FOR FOOD: 5-100,000 EXCHANGES, 30,000 PROJECTERS, 20,000-50,000 MINING COMPANIES, AND 30,000 SERVICE PROVIDERS (LAW FIRMS, COMPLIANCE, MEDIA, VC, MARKETERS, ETC.). BASED ON ANNUAL FULL-CALIBRE COSTS OF $0.2 MILLION PER PERSON (INCLUDING A FULL SHARE OF SALARY, OFFICE, INFRASTRUCTURE, COMPLIANCE, MARKET PROMOTION, ETC.), HUMAN AND ASSOCIATED COSTS ARE ESTIMATED AT ABOUT $20-40 BILLION PER YEAR, PLUS $10-15 BILLION IN MINE EXCAVATIONS, COSTING A TOTAL OF $30-55 BILLION, WHICH CORRESPONDS TO AN AVERAGE OF $35-50 BILLION PER YEAR。
The real external income of the system is very weak. While stable currency payments, cross-border transfers and partial chain settlements do generate some external demand, this revenue is far from sufficient to support the current volume relative to the total market value and industry costs of the entire encrypted market. Transaction charges are intrinsically circular - the money paid to the exchange by the user is derived from the principal of the user and not from an outside customer. It's also an internal cycle. The only source of large-scale replenishment is the influx of new investors. Once the inflow is below tens of billions of dollars per year, the system is net blood loss。
This contrasts fundamentally with traditional finance. The bottom firms in the stock market are generating real profits — apples make more than $90 billion a year net — and the annual profits of the entire standard 500 are set at trillions of dollars. The cost of friction is insignificant in relation to the profit pool, so the stock market can grow over the long term, not through new inflows, but through the continued earnings of the bottom firms. There's nothing in the encryption industry that makes money from the outside world. It's a pure negative sum game。
THE STRUCTURE OF THE ENCRYPTION INDUSTRY IS HIGHLY SIMILAR TO THAT OF THE CASINO INDUSTRY: THE EXCHANGE IS THE CASINO, THE MINERS ARE THE MAINTENANCE OF INFRASTRUCTURE, THE PROJECT IS CONDUCTED BY DIFFERENT GAMING TABLES, AND A WHOLE RANGE OF MAIL-PRODUCING INDUSTRIES — THE MEDIA, KOL, SUMMITS, INVESTMENT AGENCIES, LAW FIRMS, COMPLIANCE COMPANIES — HAS EMERGED. GAMBLING IS A DIVERSION, AND REAL CONSUMPTION TAKES PLACE THROUGHOUT THE INDUSTRIAL CHAIN. BUT THE KEY DIFFERENCE IS THAT CASINO GAMBLERS KNOW THEY'RE GAMBLING, AND THE ENCRYPTION INDUSTRY WRAPS THE CASINOS INTO "REVOLUTION," "FINANCIAL INFRASTRUCTURE FOR THE FUTURE", "DIGITAL GOLD" AND LETS GAMBLERS THINK THEY'RE INVESTING IN A GREAT CAUSE. IT IS THE HARVESTERS ON THE OUTER EDGE OF THE SYSTEM THAT MAKE THE REAL MONEY: ELECTRIC POWER COMPANIES, CHIP MANUFACTURERS, CLOUD SERVICE PROVIDERS, LANDLORDS, LUXURY DEALERS。
This rigid cost is gravity, and it is the necessary root cause of the bear market. The cattle market is simply an illusion that new inflows temporarily exceed the rate of consumption。
Three trillion dollars of history
THE CUMULATIVE OPERATING COSTS OF THE INDUSTRY ARE ABOUT US$ 500 BILLION: MINING HISTORY IS ABOUT 150 BILLION, EXCHANGE INDUSTRY HISTORY IS ABOUT 200 BILLION AND OTHER INVESTMENT AND PROJECT-PARTY HISTORY IS ABOUT 150 - 200 BILLION (VC CALIBER ALONE IS ABOUT 100 - 120 BILLION, PLUS DIRECT FINANCING SUCH AS ICO AND THE PROJECT-PARTY ' S OWN OPERATING CONSUMPTION)。
The $20 billion of the exchange could be dismantled: the cumulative operating cost in 2021-2025 was about $24 billion (including the operating cost) and, together with early inputs from 2012-2020, the cumulative historical cost was $25-27 billion. Binance did not disclose the financial statements, but calculated on the basis of its size and global compliance expenditure, the cumulative costs were at the same level. Both alone have consumed about $50-60 billion. Plus the hundreds of exchanges that have emerged in history — coins of fire, OKX, FTX, Bitfinex, Kraken, Bybit, Kucoin, Gate, Mt.Gox, etc. — 200 billion are conservative estimates。
THE $150 BILLION IN MINING IS MORE THAN JUST BITCOIN. OVER THE PAST 15 YEARS, BITCOIN HAS ACCUMULATED ABOUT 100 BILLION DOLLARS IN ELECTRICITY AND MINERALS, ALL OF WHICH HAVE BECOME ELECTRICITY AND SCRAP METAL. THE CUMULATIVE REVENUES OF MINERS IN THE SEVEN-YEAR POW CYCLE OF THE ITA WERE ABOUT 30-40 BILLION, CORRESPONDING HARDWARE AND ELECTRICITY INPUTS AT THE SAME LEVEL, AND APPROXIMATELY $19 BILLION OF HARDWARE ASSETS WERE LOST OVERNIGHT ON THE DAY OF THE TRANSFER TO POS IN 2022. FIL IS EVEN MORE EXTREME — HARDWARE, PLEDGE, STAGGERED DEBT, WITH SALES OF MORE THAN RMB 30 BILLION IN FRONT OF THE MAIN ONLINE LINE IN THE CHINESE MARKET ALONE, AND FIL FALLING FROM A PEAK OF $237 TO LESS THAN $1. THE SITUATION IS SIMILAR FOR MINERS IN OTHER POW CURRENCIES, SUCH AS LTC, DOGE, WHOSE ACTUAL COST IS MUCH HIGHER THAN THE CURRENT MARKET PRICE。
But $500 billion is just business-level consumption. The largest underestimation was the personal-level consumption spillover of participants. The vast majority of the world’s hundreds of millions of encrypted users entered the market during the cattle market, and a significant proportion of them did earn the real money – the money that they sold was squandered on cars, houses, watches, nightclubs, casinos, luxury goods. During conferences such as Token 2049, the whole city became a consumer carnival in the encryption industry. There is also a much more subtle consumption route: a large number of full-time KOL and professional traders whose income is entirely derived from the encrypted market and whose entire cost of living — rent, meals, travel, luxury goods — is essentially the operating cost of the system and is simply not posted on the books of any company. These "profits" seem to be profits made by the winners, but the vast majority of them never sink into personal capital, but go straight back to the system's consumer layers. - It's like a gambler who wins in Macau and spends his money next to a casino. The total size of this individual consumption spill may be no less than that of business operations, but it is never possible to be counted。
Together with theft and impunity, which cumulatively amount to between 30 and 50 billion, the industry has already lost hundreds of billions of dollars and continues to grow at the rate of tens of billions of dollars annually. There is also a systematic underestimation of all data: the cost of a large number of small and medium-sized exchanges and deceased projects is not accounted for, and the consumption of the surrounding industries that breed cattle is not within any statistical calibre。
IV. Market value of real flows and system leverage
The current total market value of encryption is about US$ 2.5 trillion, but it will be necessary to sever the part of the transaction that is not involved: The stabilization currency and the RWA are about 34 billion non-encrypted assets; the BTC permanently loses about 3 to 4 million units (about 1 million of them), corresponding to a market value of about 25 billion; and the total price of the Yamaya coin is about 500 billion, but the bulk of the supply is in the hands of the founding team and the VC (about 45 per cent of the XRP is in Ripple ' s hands, and about 60 to 80 per cent of the BNB is in the hands of CZ and Binance) and is cut in half conservatively. After being stripped, the market value of real circulation in the encrypted market was about 1.6 trillion, of which the BTC accounted for 72 per cent — the fate of the market as a whole depended almost entirely on the price of one species。
The combined market value of USDT and USDC is approximately $250 billion, but other stable currencies (USDe, DAI, etc.) are in large numbers a package made of USDT/USDC as a bottom collateral and should not be double-counted. A significant portion of the $250 billion is spent on non-encrypted speculative uses such as cross-border payments, remittances, business settlements, etc. Taking these into account, the amount of stable coins that actually act as security for the encrypted market is about 150-180 billion, plus the remaining 23 billion in French currency deposited on the French exchange, which amounts to approximately $200 billion。
The market value of $1.6 trillion in real circulation corresponds to about $200 billion in bonds, with an effective leverage rate of about eight times. The system is far more fragile than it appears on the surface — as long as 5 per cent of the holders want to be French currency at the same time, liquidity will be depleted and prices will collapse。
Hundreds of billions of dollars of operational consumption per year are consistently drained from the bond. If new inflows are not replenished, the guarantee pool will continue to shrink. The essence of the cow market is to stabilize the growth of the currency balance — new money comes in to make the stable currency, the bond pool gets bigger, and the leverage is magnified by a burgeoning market value. In turn, the bear town was redeemed with the stabilization currency, the guarantee was reduced and the market value accelerated. This structure continues to deteriorate — the bond share is declining and the leverage ratio is rising until it is not sustained。
V. ETF AND DAT: LAST BLOOD TRANSFUSION
IN 2024-2025, THE ENCRYPTED MARKET EXPERIENCED A SEEMINGLY STRONG ROUND OF CATTLE MARKETS: THE BTC INCREASED FROM ABOUT $40,000 TO OVER $120,000. MAINSTREAM NARRATIVES ARE ATTRIBUTED TO "INSTITUTIONAL RECOGNITION", "MAINSTREAM ADOPTION". BUT IF THE PRICE IS NOT THE PRICE, BUT THE FLOW, THE CONCLUSION IS THE OPPOSITE。
The incremental financing of the cattle market came almost entirely from two corridors: ETF/ETP, with a cumulative net inflow of about $100-110 billion; and DAT, Inc. (Digital Assets Treasury, represented by Strategy/MicroStrategy), with a cumulative investment of about $90-100 billion. These two combined accounted for about $200 billion in real currency inflows。
RELEASING THIS FIGURE BACK TO THE FINANCIAL FLOW MODEL OF THE SYSTEM: THE SECURITY POOL OF THE ENCRYPTION SYSTEM AT THE END OF 2022 WAS APPROXIMATELY $12 BILLION. OVER THE THREE-YEAR PERIOD 2023-2025, THE CUMULATIVE INDUSTRIAL CONSUMPTION WAS ABOUT 100-150 BILLION. WITHOUT THE $200 BILLION INFLOWS OF ETF AND DAT, THE GUARANTEE POOL WOULD HAVE BEEN CONSUMED CLOSE TO ZERO AROUND 2025. ETF AND DAT ARE NOT INSTITUTIONAL ENDORSEMENTS OF THE "SPRING-UP" SYSTEM, BUT ARE THE ONLY REASONS FOR THE SYSTEM'S COLLAPSE. THIS 200 BILLION IS BLOOD TRANSFUSION, NOT BLOOD。
The guarantee pool currently stands at about $200 billion, which is exactly the cumulative net inflow of ETF+DAT - – Meaning that the net increase in funds within encrypted ecology is zero or even negative. Hundreds of millions of users, hundreds of exchanges, thousands of projects, the entire DeFi ecology — a net contribution of zero in three years. The internal economy is already a closed zero-sum cycle。
THIS CONCLUSION CAN BE CROSS-CHECKED: ETF+DAT FLOWS TO $200 BILLION, A NET INCREASE OF ABOUT $80 BILLION (FROM $12 BILLION TO $200 BILLION) IN THE BOND POOL, AND THE LOSS OF $12 BILLION IN THE MIDDLE FALLS WITHIN AN ESTIMATED THREE-YEAR PERIOD OF INDUSTRIAL CONSUMPTION. TWO COMPLETELY SEPARATE PATHWAYS — ONE EXTRAPOLATING ANNUAL CONSUMPTION FROM THE BOTTOM OF THE INDUSTRY COST STRUCTURE AND ONE PUSHING NET LOSS FROM FINANCIAL FLOWS IN AND OUT — HAVE SHRUNK TO THE SAME FIGURE。
This explains an unprecedented phenomenon: BTC is innovative, but ETH and Yamamoto are not. The BTC and the Yamamoto currency were previously synchronized, as new arrivals spread funds from BTC to the entire ecology. The funds went directly to BTC through ETF and were not spread. ETF brought the money, but not the user - the IBIT buyer ordered it on App, he did not download Binance, he did not see the list of coins, he did not enter the Telegram group and he did not participate in the airdrop. ETF cut off not financial flows, but human flows. The money went straight through the pipeline to the BTC table and the casino hall was empty。
And these two blood transfusions are closing. DAT has in fact only been bought by Strategy, and the remaining DAT company has purchased only about 1,000 BTCs for almost 30 days, a decrease of 99 per cent from its peak. Strategy was itself a lever bomb — 58 billion dollars at the cost of buying 767,000 BTCs at an average price of about $75,000, and the BTC broke down with 70,000 and started to lose. From being the largest buyer to the largest potential seller, between thoughts. ETF is also a double-edged sword — a net outflow has occurred for several weeks in the return of the BTC in early 2026. The ETF holder is not a believer, but an asset-configuring investor, and the loss will end at a certain level. ETF foreclosures are converted directly into spot dumping: foreclosures authorize participants to sell BTC prices down and more foreclose. This antibody cycle can be dramatically amplified in a more mobile encryption market。
The list of buyers is exhausted
Every time in the history of encryption, Bear City almost died, but finally survived. This is not because the system has its own ability to make blood, but because each time it happens to find the next group of investors with net inflows: Bear City was rescued in 2017 by a large-scale influx of concepts such as DeFi, NFT and MEME in 2018 and in 2022 by ETF in 2024. Every time it's not broken, it's because it's "encrypted." It's "bitcoin won't die." It strengthens faith. But the truth is not resilience, it is luck — every time a new financier is found just before the bond is running out。
This list of funders is running out. Every round of new arrivals is declining, and mainstream and accessible investor groups are largely covered. Global encryption users have reached hundreds of millions, major economies have regulatory frameworks and mainstream financial institutions have spoken or entered. Everyone who knows bitcoin knows that most of the purchases have already been bought and that the future pool of additional funds is shrinking sharply。
THERE MAY BE ANOTHER ROUND OF BUSINESSES TO HALVE BY 2028, BUT WHERE DO MARGINAL BUYERS COME FROM? THE FAMILY HAS BEEN HARVESTED SEVERAL TIMES, THE INSTITUTION HAS COME IN AND ETF HAS COME ONLINE. PREVIOUSLY, THE CATTLE MARKET RELIED ON OPENING UP A NEW GROUP OF INVESTORS, BUT FEW LARGE GROUPS ARE WAITING TO BE DEVELOPED. IT IS UNREALISTIC TO EXPECT CENTRAL BANKS TO INCLUDE BITCOIN IN THEIR RESERVES – CENTRAL BANKS MUST HAVE HIGH LIQUIDITY, LOW VOLATILITY, AND SOVEREIGN CREDIT ENDORSEMENTS, NONE OF WHICH ARE ENOUGH. MORE FUNDAMENTALLY, THE CENTRAL BANK’S FUNCTION IS TO MAINTAIN THE CREDIBILITY OF THE FRENCH CURRENCY, TO PURCHASE A CASH-FREE ASSET THAT COMPETES WITH THE FRENCH CURRENCY AND IS BASED ON THE REPLACEMENT OF THE FRENCH CURRENCY, AND TO DENY IT INSTITUTIONALLY. THE SO-CALLED "UNITED STATES STRATEGIC BTC RESERVE" IS ESSENTIALLY TO PUT EXISTING FORFEITURE ASSETS ON THE LINE, NOT NEW MONEY. POLITICAL STATEMENTS BY INDIVIDUAL COUNTRIES DO NOT AMOUNT TO REAL ASSET ALLOCATION BEHAVIOUR。
The magnification effect of marginal pricing means that changes in financial flows are dramatically magnified to market value. Over the past three years, the real inflows of $200 billion have pushed some $2.5 trillion in market value — a magnifying factor of more than 10. The reverse is true: if funds start to flow, the market value evaporates at more than ten times the volume of outflows. And the magnification effect of outflows is more intense than when inflows are made — inflows are scattered and active for months, and outflows may be concentrated, panicuous, passive acts done within weeks。
Timeline
COMBINED WITH PERSONAL CONSUMPTION SPILLOVERS, THE REAL AVERAGE ANNUAL CONSUMPTION OF THE SYSTEM COULD BE 60-80 BILLION. THIS FIGURE CAN BE VERIFIED BY REVERSE FINANCIAL FLOWS: OVER THE PAST THREE YEARS, THE INFLOWS OF ETF+DAT TO $20 BILLION PLUS POSITIVE INFLOWS THROUGH CHANNELS SUCH AS BULK, MAY TOTAL 250-300 BILLION, BUT THE BOND HAS ONLY INCREASED BY 80 BILLION, WITH THE $170-22 BILLION CONSUMED AVERAGING 60-70 BILLION ANNUALLY. OF THIS, 35-50 BILLION ARE TRACEABLE OPERATIONAL CONSUMPTION AT THE ENTERPRISE LEVEL, AND THE REMAINING TENS OF BILLIONS ARE PERSONAL CONSUMPTION SPILLS AS DESCRIBED IN CHAPTER III - THIS PART WILL NOT APPEAR IN ANY COMPANY ' S FINANCIAL STATEMENTS, BUT DID LEAVE THE SYSTEM PERMANENTLY。
On the basis of real consumption of 60-80 billion per year, the $200 billion guarantee would last only 2.5-3 years. It also assumes that there is no net-selling optimism. The reality would be even more cruel — the bear market must have been accompanied by net sales, with the loss of a stable currency of 65 billion less than a year in 2022. If there was a wave of panic foreclosure, it would be equivalent to more than half a year ' s consumption being removed extra for months。
More critically, there is inertia in industry spending: revenues reflect the market in real time, and transaction fees fall as soon as the volume of transactions shrinks; however, expenditures are rigid and delayed — employee contracts cannot be cancelled on the same day, office leases are signed annually, mine power contracts are locked for a fixed term and compliance licence maintenance fees are not reduced because of market failures. In the early stages of the market downturn, there will be a fast-declining, but high-maintenance, shears, with a faster net consumption than in cattle。
The system does not need a zero guarantee to collapse. The bond fell from $20 billion to $100 billion, and the market value may have fallen from more than $2 trillion to $5.6 trillion. At that stage, the exchange closed extensively, the project side ran, the miners shut down, and the industry as a whole entered the death spiral — consumption did indeed decline as the industry contracted, but at a slower rate than the system contracted, just as a person lost blood while his body weight fell, and metabolism did decrease, but the rate of reduction did not catch up with the rate of loss。
HALVE BY 2028 IS THE REAL TEST. IF THE BTC FAILS TO INNOVATE AFTER HALF, THE BELIEF THAT EACH TIME WILL COME BACK WILL BE BROKEN FOR THE FIRST TIME. BACK THEN, BEAR CITY WAS TALKING ABOUT WHERE THE BOTTOM WAS. AT THAT TIME, PANIC WAS NO LONGER A CUT-OFF, BUT RATHER AN ESCAPE FROM A SINKING SYSTEM. THE DIRECTION IS FIXED, THE RHYTHM IS UNCERTAIN。
VIII. If the encryption industry is a company
Think of the whole encryption business as a company, open its financial statements:
Income statement - This company has little income. The main business is to operate an internal trading market, where users trade with each other digital chips created by companies from which companies draw fees. Looks like "income", but the source is the principal of the user, and no outside customer is paying. Real external revenue (stabilized currency cross-border payments, etc.) could be only several hundred million dollars per year, with coverage of less than 1 per cent of operating costs. At the same time, annual operating consumption amounts to $60-80 billion。
Balance sheets — cumulatively, more than trillions of dollars have been burned. There was only about $200 billion in cash on the books. But the company's market value is set at over $2 trillion. This figure is an illusion that $200 billion of cash is leveraged by marginal pricing at about eight times and cannot be cashed by all shareholders at the same time. If everyone wants to sell it at the same time, the total amount that can be recovered is 200 billion。
THE HISTORY OF FINANCE — COMPANIES HAVE NEVER BEEN PROFITABLE AND DEPEND ENTIRELY ON EXTERNAL FINANCING TO SURVIVE. IN 2017, ROUND A WAS MIXED (HULK), IN 2020-2021, ROUND B (A MASSIVE INFLUX OF PEOPLE DRIVEN BY IDEAS), AND IN 2024-2025, ROUND C (ETF+DAT). EACH ROUND IS LARGER BECAUSE THE RATE OF BURNING MONEY IS ALSO INCREASING. THE LATEST ROUND, WHICH HAD BEEN ABOUT $200 BILLION, HAD BEEN IN OPERATION FOR THREE YEARS, JUST AS CASH HAD BEEN CREDITED BACK TO $200 BILLION. HOWEVER, THE LIST OF INVESTORS HAS RUN OUT AND THE D ROUND WILL NOT MELT。
Deadly characteristics - the company's users and shareholders overlap almost entirely. Money buyers are both "users" (using the trading market) and "shareholders" (holding chips to share value added). This means that the loss of the user = the shareholder's redemption = the decline in income = the decline in the market value, with four events occurring simultaneously without any buffer。
IX. Most people overestimate their chances of winning
In a negative system, the overall return of participants is necessarily negative — the money consumed by the system will not come back in vain. However, the distribution at the individual level is uneven. A few did earn real money and leave, but represented a very low proportion of the overall participants。
MOST OF THE PEOPLE FACE A STRUCTURAL DILEMMA, BROKEN DOWN BY THEIR ROLES: WHITE TENDS TO ENTER AT THE END OF THE CATTLE MARKET, LEAVES AT THE BOTTOM OF THE BEAR MARKET, AND IS NATURALLY ON THE OPPOSITE SIDE OF PROBABILITY, ALTHOUGH THEY LOSE EARLY AND THEIR INJURIES ARE RELATIVELY MANAGEABLE. A PROFESSIONAL GAMBLER EARNS AND LOSES, RECYCLES SEVERAL TIMES TO ZERO, AND THE PROBLEM IS NOT TECHNOLOGY, BUT GAMBLING PSYCHOLOGY. THE FAITH OF BELIEVERS HAS TAKEN THE INCREASE IN BITCOIN BECAUSE OF FAITH, BUT ALSO BECAUSE FAITH WILL NEVER SELL — FAITH IS THEIR CAUSE OF SUCCESS AND MAY ALSO BE THE CAUSE OF DESTRUCTION. THE EXCHANGE AND THE PROJECT OWNER LOOK LIKE A DEALER, BUT MOST EARN MONEY AND HOARD MONEY AND INVEST IN NEW PROJECTS, AND PROFITS NEVER REALLY LEAVE THE SYSTEM. SOME OF THE BOSSES HAVE SET UP FAMILY OFFICES CALLED THE TRANSFORMATION INVESTMENT IN AMERICA, BUT ALL OF THEM HOLD IBIT — MOVING BITCOIN FROM COLD PURSES TO ETF, CHANGING A VEST, WITH THE SAME BOTTOM OPEN。
The plight of believers is particularly worthwhile. There is a fine paradox in the encryption industry: it is possible to earn a lot of money on bitcoin if it is bought early and held for a long time, and it must be done by those who believe — those who do not believe. But when you make money, the price rises because "my faith is right," and it gives positive feedback and locks it to death. The screening mechanism ensures that only those who believe can earn money, while the process of earning money ensures that those who believe never leave the room. Those who can break the cycle need an extremely rare ability — to deny their faith with logic when it is constantly tested by the market. It's almost anti-human。
BSV IS THE MOST INTUITIVE COUNTER-ARGUMENT. THE BSV COMMUNITY'S BELIEF CONCENTRATION IS PROBABLY THE HIGHEST OF ALL ENCRYPTION PROJECTS, WITH CORE HOLDERS BEING MUCH MORE DETERMINED THAN MOST MAINSTREAM CURRENCIES, WITHOUT PREJUDICE TO THE CONTINUED DECLINE IN BSV PRICES. THE REASON IS SIMPLE — NO NEW FUNDS COME IN. ASSET PRICES ARE MARGINAL PRICING, NOT FAITH VOTES. MORE THAN 10,000 LOYAL HOLDERS ARE NOT SELLING, BUT A NEW USER BUYS IN REAL MONEY. FAITH IS NOT THE BOTTOM LINE, IT IS THE NEW MONEY。
Very few people leave with real money, and the common denominator is not a good eye, but a knowledge of when to leave the table. By creating a real business that generates revenue rather than a purely gambling market, they transfer the vast majority of their assets to the real economy when the industry thrives, and they literally jump out of encrypted narratives. Of the hundreds of millions of participants, it is possible to achieve all this in no more than one in 1,000. The vast majority of believers will complete the roller coaster — he was there when he went up and he came down。
Prices are all decent while they are still there, but as long as the price trend is reversed, it will be all the same。
X. Marketing more efficient than marketing
If strictly defined by the flow of funds: the source of the proceeds of the existing participants is not the productive return of the bottom asset, but the new funds injected by the subsequent participants — that is, the structure of the funds sold. The encryption industry fully meets this definition。
The difference with classic marketing is only formal. Traditional marketing has a prominent hierarchy and mechanism for re-entry, and encryption is done through narratives — ICO on the technological revolution, DeFi on the democratization of finance, NFT on digital ownership, Memeco on non-fake and direct gambling. Each round of narratives is different, and the bottom-level financial flow logic is exactly the same: early entrants exit with the money of late entrants, without any chain producing real value increments。
But what's worse about encryption than traditional marketing is that traditional marketing is a scam, which has a natural ceiling of scale. The scams need to maintain the lie and the transmission chain is broken when people reveal it, people call the police and people find that the product does not exist. Most people have a basic immunity from fraud, so traditional marketing can reach only a limited number of people。
ENCRYPTION DOESN'T LIE. THE BTC DOES EXIST, THE BLOCK CHAIN DOES RUN, THE CURRENCY YOU BUY IS IN YOUR WALLET, THE TRANSACTION IS ON THE CHAIN. EVERYTHING IS TRUE. THIS CIRCUMVENTS THE MOST BASIC HUMAN DEFENCE AGAINST FRAUD — “IT IS NOT FAKE” — AND THE QUESTION IS NOT VALID IN THE FACE OF ENCRYPTION, BECAUSE IT IS NOT. BUT "REAL EXISTENCE" AND "VALUE" ARE DIFFERENT THINGS. A TECHNICALLY REAL-LIFE SYSTEM DOES NOT REPRESENT THE INTRINSIC VALUE OF THE ASSETS IT CARRIES. THE STRANGE THING ABOUT ENCRYPTION IS THAT IT REPLACES ECONOMIC VALUE WITH TECHNICAL AUTHENTICITY, AND THE VAST MAJORITY OF PEOPLE CANNOT DISTINGUISH BETWEEN THE TWO. PEOPLE SEE THE CHAIN RUNNING, THE CURRENCY RISING, THE EXCHANGE OPERATING, THE ETF, AND NATURALLY IT'S A "REAL ASSET CLASS". NO ONE FEELS THAT THEY HAVE BEEN DECEIVED, BECAUSE NO ONE IS LYING TO THEM ON THE SURFACE。
That is why the number of people reached by encryption is much larger than any traditional distribution — it does not trigger any fraud alerts. The sale of hundreds of thousands of people, even in large cases, is easily and easily encoded into hundreds of millions of people, most of whom do not feel so far to be victims。
THE ONLY MEASURE OF PARTIAL EXEMPTION IS A THIN LAYER OF INSTRUMENTAL USE — CROSS-BORDER SETTLEMENT, COUNTER-CENSORSHIP TRANSFERS, STABILIZATION OF CURRENCY PAYMENTS. THIS PART IS TRUE, BUT IT ACCOUNTS FOR A VERY LOW PROPORTION OF FINANCIAL FLOWS ACROSS THE INDUSTRY, AND IT DOES NOT NEED A BTC WORTH $100,000. THE MARKET VALUE OF THE BTC IS NO LONGER REQUIRED FOR USDT TO BE USED FOR CROSS-BORDER SETTLEMENTS. THIS LAYER OF TOOL USE IS REAL, BUT IT CAN'T AFFORD AN "INDUSTRY" AND IT CAN'T AFFORD TRILLIONS OF DOLLARS。
Conclusions
The above development does not depend on any particular number, and the conclusions will not change, even if there is a 50 per cent error in each figure. Accurate data are not available in this industry — non-transparent, no statistics on dead items, no records of off-site transactions, and personal waste. All figures are quantitative rather than precise calculations. But that's enough. Investment decision-making and strategic judgement need never be precise to the decimal point, but need only be in the right direction and be credible in scale。
FROM A MACRO-LEVEL PERSPECTIVE, THE ENTIRE LOGICAL CHAIN IS CLEAR: A HIGH-CONSUMPTION SYSTEM WITH NO EXTERNAL INCOME, WITH AN ACCUMULATION OF HISTORICAL LOSSES OF MORE THAN TRILLIONS OF DOLLARS, WITH ONLY ABOUT 200 BILLION REAL BONDS REMAINING AT THE PRESENT TIME, WITH A MARKET VALUE OF 1.6 TRILLION DOLLARS LEVERAGED EIGHTFOLD. THE LAST LARGE-SCALE EXTERNAL BLOOD TRANSFUSION (ETF+DAT) HAS BEEN USED, WITH A NET INCREASE OF ZERO IN THE INTERNAL ECONOMY, AND THE BUYER LIST IS EXHAUSTED. THE SYSTEM CONTINUES TO BLEED AT A RATE OF TENS OF BILLIONS PER YEAR, WHILE THE BLOOD TRANSFUSION CHANNEL IS BEING SHUT DOWN。
The industry will not disappear, but will shrink significantly. The demand for anti-censorship transfers and free trade is real, long-term, but much smaller than it is today. The final industry shrinks to a volume commensurate with the scale of real capital inflows - when new inflows just cover the operational consumption of the system, the industry reaches equilibrium. The market value of that equilibrium is probably just a fraction of the current。
But there is a more extreme possibility that bitcoin will not even reach the equilibrium. The continuing decline in prices has led to a large number of miners being shut down and a collapse of the entire network, while the market is full of mining machines sold at low prices — with a sharp fall in the cost of 51 per cent of attacks. A successful attack would permanently destroy the security credibility of Bitcoin, further collapse of prices, further loss of computing power and further lower costs of attacks. It's a spiral to zero. In this scenario, encrypted money has died as a speculative market, and the only thing that survives is a stable currency as a payment channel — but that is not the “encrypted industry”, but just a corner of the financial infrastructure。
This is one of the most expensive social experiments of mankind in peacetime on "Is consensus a substitute for value"? The answer is clear, but most participants are not ready to admit it. The entrance is closing and the exit never stops. The direction is fixed。
