Beijing, Jianguomen. I met up with a VC friend at a café downstairs, the floor-to-ceiling windows framing the uniquely crisp, gray sky of February. It had been a long time since I last had coffee with someone from the Crypto circle, and I felt that in itself was a signal. Sure enough, as soon as my friend sat down, they gave me a helpless look: 'How long do you think this bear market will last? We haven't made a single investment in six months.'
Six months, in an industry where iteration speed is measured in days, is almost an eternity.
They told me it wasn't because entrepreneurship had died; they still chat with numerous founders every month. But now, they are confused, unsure of what good directions or opportunities even remain.
Stirring the coffee in their cup, they let out a bitter smile: 'Sigh, my boss told me to go look into AI, but I still have faith in crypto.'
In that sentence, I heard the final struggle and reluctance of a practitioner. When the capital's weather vane has clearly turned, faith becomes the cheapest yet most奢侈(luxurious) thing.
The next day, Kyle Samani, the co-founder of Multicoin Capital—once the 'High Priest of Solana,' the standard-bearer of 'thesis-driven investing'—announced on social media that he was leaving the scene. The high priest had apostatized.
When the smartest minds and the most sensitive capital in an industry simultaneously choose to exit, I realized we are facing a serious moment.
The Great Ebb Tide
The story of cryptocurrency over the past decade was written upon the滔天洪水(surging floodwaters) of global liquidity excess. Now, the floodwaters are receding, but what's being washed ashore isn't just cryptocurrency.
February 2026 is a nightmare for holders of all risk assets globally. What we are seeing is no longer a seesaw effect; US stocks, gold, cryptocurrency—assets with historically different risk appetites—are now holding hands and jumping into the abyss together.
Behind this comprehensive decline lies a fact we long foreseen but were reluctant to believe: the era of cheap money, where we could blindly believe 'tomorrow will be better,' has officially ended.
The economist Minsky once said the end of prosperity is often the beginning of collapse. Now, that moment has arrived. The source of this crisis is the tightening faucet in Washington. During the long quantitative easing cycle of the past decade, near-zero interest rates flooded global markets with hot money searching for high returns. This money, like water overflowing a dam, poured into any asset class that could tell a sexy story, and cryptocurrency was undoubtedly the sexiest of them all.
However, when the hawkish Kevin Warsh was nominated as the next Fed Chair, when the Fed began shrinking its balance sheet, when the US dollar index strengthened relentlessly, and when the global cost of capital rose, the tide went out. The first to be exposed are always the assets most reliant on narrative rather than value.
The Collapse of Two Temples
The crypto world has two temples. One is the Temple of Value, enshrining the digital gold, Bitcoin. The other is the Temple of Application, enshrining the next-generation internet, Web3. Now, they have almost simultaneously collapsed.
First, the Temple of Value. Since the birth of Satoshi Nakamoto's whitepaper in 2008, digital gold has been Bitcoin's core, most坚固(sturdy) narrative. It was considered an anti-inflationary, decentralized, sovereign-independent store of value.
Yet, when a real crisis hits, the market votes with its money. As Bitcoin gained acceptance by various mainstream institutions in recent years, its correlation with US tech stocks once climbed to 0.8. This means it is now not a hedge against risk, but an amplifier of risk. It is not a safe haven, but the eye of the storm. If Nasdaq sneezes, Bitcoin might end up in the ICU.
With the Temple of Value tottering, how is the Temple of Application faring?
To understand the collapse of the Temple of Application, we must understand a broader context: the fundamental narrative of technology has changed in these past few years.
From 2010 to 2020, blockchain technology was almost the only 'future technology' that could ignite capital's imagination. It was the protagonist of that era's tech innovation narrative, a game no VC could afford to miss. Bitcoin's rise was not just a monetary phenomenon; it was also a value映射(reflection) of this technological fundamental.
But now, the protagonist has changed. AI has become the new deity.
The rise of AI acts like a mirror, revealing the虚无(emptiness) of Web3 applications. Initially, when the AI wave surged, the crypto industry harbored a flicker of optimistic fantasy. We tried to combine the two, creating the beautiful narrative that 'AI is the productive force, blockchain is the production relation.' But now, this seems like nothing more than wishful thinking and self-consolation. AI doesn't need blockchain to prove its value. Capital and talent will always flow to the place that is easiest to understand, the sexiest, the place where bubbles are easiest to blow. And today, that place is AI.
This mirror has also driven believers like Kyle Samani to despair. Samani and his Multicoin were once the most devout evangelists of Web3. They were the earliest and most important supporters of Solana. Their proposed DePIN thesis was once considered the most viable path for Web3 to enter the real world.
Yet, when this high priest finally admitted that the essence of blockchain is merely an asset ledger, it was tantamount to宣告(announcing) the collapse of the Temple of Application. We thought we were building a future Rome, only to find out we were just changing the chips and carpets in a casino, over and over again.
A more serious problem is that the industry is losing its most valuable asset: imagination for the future.
Top developers and young talents are voting with their feet, flowing from an industry constantly repeating Ponzi schemes to other sectors. When the风向标(wind vanes) of various startup incubators no longer point towards Web3 at all, we know an era might be over.
Yet technology never disappears just because narratives collapse. Decentralized ledgers, smart contracts, breakthroughs in cryptography—these technologies themselves still lie there quietly.
It's just that right now, no one knows their true destination. Perhaps they are destined not to reshape the world ostentatiously like AI technology, but to be used in more specific scenarios to solve more practical problems. It's just that such stories are no longer sexy, nor can they attract hot money and believers.
A Portrait of the Masses
The collapse of grand narratives eventually transmits to every individual. When temples turn to ruins, we see a bleak portrait of the masses.
In January 2026, Entropy, hailed as the most technically hardcore decentralized custody startup, announced its closure after four years of operation; also in January, the trading platform Bit[.]com announced it would gradually shut down; in February, Gemini, the compliant exchange founded by the Winklevoss twins, announced a 25% layoff and a full exit from the UK, EU, and Australian markets,收缩(contracting) its business back to the US mainland. Since its peak in 2022, the company's total headcount has been reduced by over 70%.
I opened social media and saw developers who once filled their bios with WAGMI and appended '.eth' to their names now had signatures changed to 'Building with LLMs.'
Scrolling through Twitter, I saw郡主(Princess, likely a username/nickname) reminiscing about the story of us畅想(enthusiastically discussing) the industry's future in a coffee shop four years ago. I saw many old friends posting again about the industry's past prosperity and fun.
When an industry starts集体怀旧(collectively nostalgic), it means it has lost its future. We begin to怀念(miss) the summer of 2021,怀念(the peak when the global cryptocurrency market cap reached $3 trillion,怀念(the madness where a picture of a monkey could sell for millions of dollars,怀念(the illusion that money was as easily attainable as air.
When an avalanche occurs, every snowflake feels innocent. But we are not snowflakes; we were the ones who made the snow with our own hands, and now we watch it melt in our palms.
Will the Consensus Conference Have Any Consensus?
Just next week, under the dazzling lights of Victoria Harbour, the Consensus conference is about to be held in Hong Kong. One can imagine global crypto believers gathering once again. They will be dressed in suits, they will talk incessantly about consensus. But will there truly be any consensus left in the venue?
This gives me a strong sense of absurdity. In an industry that has lost its two foundational narratives of digital gold and Web3, in a winter where cheap money is gone and high priests have apostatized, what consensus can we possibly reach? A consensus to huddle together for warmth, or a consensus to admit failure?
Perhaps true consensus is never reached in noisy conference halls, but in the quiet introspection of every practitioner, in the courage to start anew after admitting the illusion has shattered.
This industry needs a thorough, top-to-bottom self-reckoning. But清算(reckoning) does not equal destruction. When the tide recedes, something always remains upon the ruins.
Those who truly believe in decentralized technology might find embers in the ruins, but it will no longer be a world-changing blaze, rather a glimmer of light solving problems. Perhaps, in the next decade, we will see blockchain applications truly rooted in industry, serving specific populations, not aiming for hundred-fold coins. They might appear in supply chain finance, in digital identity authentication, or in corners we cannot imagine today.
Those will be smaller, slower, but also more real stories. They will no longer need grand narratives, nor myths of overnight riches; they will only need patience and time. For those still at the table, this is perhaps the only hope left.
Writing to this point in the article, I look out the window. The early morning sky in Beijing is still gray, much like this moment for the industry.
