Regarding the tokenization of U.S. stocks, one perspective is that it will be a fatal blow to crypto projects, leaving altcoins with almost no chance. The reason is that funds previously invested in crypto will be siphoned off by high-quality U.S. stocks. Admittedly, some of the money that was in crypto will flow into tokenized U.S. stocks. However, this is only one side of the coin—there is another side.
Because asset tokenization, including the tokenization of the U.S. dollar, U.S. bonds, U.S. stocks, and physical gold, will lead to a significant increase in on-chain asset volume. The crypto financial field is composable. If Ethereum scales and resolves issues like privacy, one possibility is an explosion in on-chain transactions, not only in DEX, perps, prediction markets, etc., but also the potential for some funds that previously played U.S. stocks to flow into the crypto market. Funds that wanted to invest in U.S. stocks but didn’t have the opportunity may also enter, overall expanding liquidity.
More importantly, the circulation of U.S. stocks on-chain is not entirely one-way; it could be bidirectional. However, the concern is that crypto project revenues are not solid enough to compete. But wealth effects are not entirely dependent on revenue; there are industries in this world with revenue but low market capitalization.
Of course, this also inevitably means the complete end of the kind of widespread altseason seen in the previous two cycles. But high-quality altcoins, as well as on-chain infrastructure—including public chains like Ethereum, DeFi, oracles, privacy technology, digital identity, wallets, etc.—will still be in demand. Even crypto AI agents, asset tokenization, and others are highly likely to combine to create new玩法, once again giving rise to new tracks similar to prediction markets/perps.
The core idea here is: don’t assume that just because U.S. stocks are being tokenized, doomsday is inevitable and liquidity will definitely be taken away. Once stablecoins and tokenized U.S. stocks are on-chain, they won’t just sit there idly; liquidity must be activated, and the composability of crypto will be fully utilized. Once there is a good narrative and good projects, not only will funds from the crypto circle come in, but funds from outside the circle will also flow in. This is merely competing on the same field.
A few high-quality projects in the crypto space, once they have a narrative, may not necessarily underperform U.S. stocks in terms of returns. In the next cycle, it is highly likely that projects similar to prediction markets and perps will emerge—projects that do not exist in traditional financial markets, with crypto-characteristic dream P/E ratios. Believe in the power unleashed by new on-chain liquidity and composability. The craving for money and the pursuit of innovation are so urgent that, in continuous exploration, new crypto species are created from the bottom up.
Furthermore, hoping for an altseason like in previous cycles is already unlikely. Even without the tokenization of U.S. stocks, a comprehensive altseason similar to the last two cycles has already exited the crypto stage. But a small number of high-quality crypto projects still have opportunities, especially those infrastructures and applications used to carry tokenized U.S. stocks.
Finally, every cycle has its version prodigy. The version prodigies of the cycle before last, the last cycle, and this cycle are all different; the next cycle will be no different.
The golden Wild West era of the crypto field is gradually coming to an end. With the entry of institutions, the crypto field has moved into a new stage of financial innovation.
In this stage, there are still opportunities for high returns. Compared to the previous golden period, the probability of hitting it big is much smaller, but it is not impossible. Perhaps the version prodigy of the next cycle is still in their fourth year of university, or maybe they lost a lot of money in this cycle, lying low in the fields, waiting for the opportunity to soar in the next cycle.
