Written in Singapore on December 28, 2025
In Q4 2025, driven by the interplay of market and policy, global traditional finance and emerging open finance are colliding violently in an increasingly chaotic environment. This has led to drastic changes that have cleared most of the residual heat from the first curve (Note 1), with emotional remnants difficult to digest in a short time. Meanwhile, traditional finance is isolated in a bubble narrative of AI and the golden age of chaos, reaching the end of its tether. Central banks around the world are forced to rigidly satisfy the market's rigid aesthetic with textbook monetary and fiscal policies, compelling everyone to believe that these outdated economic inertia can still sustain for a little while longer.
In several previous articles, I have detailed the failure of conventional economic models at the intersection of the Kondratiev wave cycle, but experiencing it firsthand is even more palpable. Among the noise, only the market outlook report from Coinbase, 2026 Crypto Market Outlook, provides a relatively objective summary and forecast of the current market and industry. In fact, the major trends are not hard to discern; it is just that too many emotions and aesthetic inertia have obscured the brief gaps. From my current perspective, I am mainly concerned with three questions:
i) The current global situation shows a high similarity in entropy increase trends compared to the 1910-1935 (Note 2) period. How long is the corresponding window today, and how should we conduct comparisons rather than mechanically borrowing historical experiences to assess risks and make decisions?
ii) The native development speed of Crypto and Open Finance, and the contradictions arising from their collision with traditional finance in a positive market, which potential will become the main contradiction and restrain the other as a secondary contradiction?
iii) The combination of the first two forms a nonlinear problem: Will chaos create a turning point in 2026, becoming an independent growth factor that promotes Crypto and Open Finance to rapidly bridge the gap (Note 3) into the mainstream world and financial markets?
Coinbase's report 2026 Crypto Market Outlook mentions many impressive data points, one of which regarding stablecoins is particularly striking: as of Q4 2025, the total global supply of stablecoins has reached $305B, with a total transaction volume of $47.6T. We can roughly compare this data with the current global M0 total supply of $15T and the total global currency transaction volume of $1500T (Note 4), revealing that the supply of stablecoins accounts for 2.0% and their application ratio has reached 3.2% (notably indicating that the average activity of stablecoins is greater than that of traditional fiat by 160%). Coupled with the report's indication of a continuous annualized compound growth of 65% over four years, along with various foreshadowing laid in 2025, we have reason to believe that Open Finance will bridge the gap and enter the Early Majority phase within the next year.
tl;dr
1011 ends the first curve of Crypto, 2025 ends the last Kondratiev wave cycle.
The end of traditional finance's aesthetic inertia and social failure under strong data regulation.
The issues behind the resurgence of RWA becoming the mainstream narrative in 2025.
Emerging developing economies and the new global geopolitical landscape.
DeFi 2.0, DAT 2.0, Tokenomics 2.0.
A review of 2025 and an analytical outlook for 2026.
1. 1011 ends the first curve of Crypto, 2025 ends the last Kondratiev wave cycle
In the January 2025 article The Second Curve of Crypto Growth, we discussed the unsustainability of the past Crypto market within the logic of speculation and narrative. Looking back at the year, only position 1 remains on the table, fighting alone and taking a different path, while various players in the original market have almost completely exited or have transformed to start developing the second curve.
1011 triggered the largest single-day liquidation in Crypto history, amounting to $19 billion, with a total of about $40 billion liquidated over several days. On the surface, this appears to be the extreme leverage structure of the first curve market being concentrated and liquidated in a low liquidity environment; fundamentally, it is due to the insufficient number of players in the zero-sum game market leading to the platform's failure to control losses and profits. When only two players remain at the table, all cooperative strategies will fail, and the opponent's dilemma is the inevitable cause of the end of the first curve.
Similar to the harvesting of the market by the $TRUMP coin, 1011 fundamentally dismantled the faith foundation of the first curve, destroying the residual heat expectations based solely on narrative, indicating that mere gambling-style speculative consensus will come to an end (Note 5); conversely, the second curve has further grown in this process, with all remaining ecological enterprises transforming or innovating to pursue more pragmatic long-term development routes. The DeFi 2.0 market, based on Onchain Asset Management, RWA Finance, and Tokenization, has become the inevitable direction for the next stage of the market, including CEX, public chains, and Top Infra, all rapidly transitioning towards PayFi and RWA.
On the other hand, by the end of 2025, global economic inflation has completely transitioned to stagflation, with the effectiveness of monetary and fiscal policy adjustments by central banks in various countries reduced to merely emotional value management. The ultimate internal competition of traditional economics and the helplessness of pushing AI expectations have completely equated to the Rockefeller era of 1910, marking the complete end of the last Kondratiev wave cycle (Note 6).
On October 29, 2025, Nvidia's market value surpassed $5T, becoming the first company in history to reach this level. While many continue to be bullish about how much more room this price has, without comparing it to the Rockefeller Standard Oil Company of 1910, I just want to say you can rationally look at the fact that the entire GDP of the African continent is only about half of that size.
Entering H2 2025, more and more rating agencies, hedge funds, and investment banks began to closely monitor Nvidia's financial situation. Setting aside its upstream and downstream production capacity and profitability, purely from the perspective of systemic risk proportion, the comparison of long and short positions on Nvidia has completely become unbalanced; in other words, even if the fundamentals continue to show positive news, this trend is difficult to maintain; moreover, it is evident that the industry facts of AI are not so optimistic.
It is worth noting that when Standard Oil was broken up into 34 companies in 1911, the global understanding of the application demand for oil energy in automobiles, airplanes, and the next generation of automated industries had already become very clear. However, this did not successfully prevent the chaos, depression, and systemic reorganization that lasted for 30 years after 1911. The reason is that the essence of chaotic disorder is the result of the failure of the previous stage's production relations, manifested in severe monopolies, widespread poverty, imbalanced development, and continuous contradictions, which are irreversible phenomena of social entropy increase.
At the intersection of major cycles, economic policies and short-cycle common sense will fail, and the factors hindering social and economic development and environmental improvement are not due to a lack of feasible growth, but rather the inertia of monopolistic production relations from the previous cycle obstructing or failing to support the fair and effective combination of productivity and labor in the next stage. Focusing on today, the development of AI is inevitable, but the globally prevalent management mechanisms of semi-feudal and semi-monopolistic capitalism can no longer sustain and adapt (Note 7).
2. The end of traditional finance's aesthetic inertia and social failure under strong data regulation
Even so, one of the surprises that exceeded my expectations is that there are still so many economists and industry experts today who are fixated on the calculation of interest rate cuts. Comparing the period from February 2020 before the pandemic to the peak in April 2022, the U.S. M2 increment has accumulated over 40%. Faced with such a massive monetary volume, each subsequent QT and QE, in my understanding, is merely a formalistic emotional massage; whether it is 25bp or 100bp, it has long lost its original economic value (Note 8).
In the current environment, interest rate cuts have become a perfect combination of a recipient's emotional aesthetic expectation and a policymaker's forced decision-making. In simple terms, this is a dual inertia of spiritual kidnapping, a tool to influence the market through emotional value. It is commendable that countries have made the greatest efforts to delay the global entry into chaos and comprehensive disorder while trying to use financial and policy tools of aesthetic inertia.
However, the process of entropy increase cannot be slowed down as a result. Half a year later, revisiting my previous mention of Greenspan's prophecy: "We must accept that monetary and fiscal policy cannot permanently boost economic growth in the presence of deeply rooted structural constraints." We can find that a large number of policies under the traditional system have rapidly become ineffective.
In mid-December 2025, Nasdaq publicly stated that it would submit an application to the SEC to change stock trading hours to 7x24. This move essentially represents traditional finance's defensive pressure on Crypto and the Onchain Market in the face of significant changes while simultaneously testing the waters with regulators. In fact, many traditional financial institutions in North America and East Asia have been adjusting their positions since the Genius Act in mid-2025, struggling repeatedly between how to embrace the challenges of Crypto Finance and face the risks of transformation while trying to maintain their previous barriers and advantages.
An interesting phenomenon is that this contradiction was met with intense reactions from various institutions in Q2 this year, as if the Genius Act had suddenly broken the original game equilibrium and the cartel alliance's moat (Note 9). Everyone felt insecure, knowing that this trend was inevitable and that the traditional financial system was about to be completely transformed. However, as time progressed to Q3, people realized that the market's reaction was overblown; the market iteration process would not be as fast as imagined. Traditional finance practitioners and policymakers miraculously reached a short-term reverse equilibrium, with the main logic being: change is inevitable, but policy compliance will become the stabilizing factor that helps everyone smoothly transition to a new equilibrium and moat. As long as the licensed parties and policymakers upgrade together, they can successfully transition. This phase in Q3 was very subtle, akin to everyone participating in a prisoner's dilemma, agreeing midway to temporarily reverse their decisions to cope with greater external pressure. This was merely a psychological illusion of the cartel alliance before its real disintegration. By Q4, the most advanced players understood that, through methods like Hyperliquid and Robinhood, the complete disintegration of the traditional financial cartel alliance would soon arrive. Therefore, both Nasdaq and Coinbase stepped forward to speak the truth, facing more realistic transformative changes, such as altering trading hours and building their own RWA tokenization systems, to gain real advantages in the next phase.
The above process is actually very classic; it represents a psychological sandbox formed by all players before facing a major transformation, participating in a game.
The end of traditional finance's aesthetic inertia does not refer to the failure of economic principles. On the contrary, Crypto Economy and Open Finance are a further development based entirely on economic principles. However, the bottleneck lies in the systemic issues within the management economics and market production relationship mechanisms, especially after fully entering the digital age, where the original management systems can no longer adapt to finding a balance between regulation and freedom. The world has fallen into a significant misunderstanding regarding the erroneous use of stringent digital regulation, leading to an accelerated deterioration of entropy within just a decade.
Over the past ten years, regions around the globe have gradually entered the huge misconception of "utilizing data when available, regulating when methods exist." The cost of rules and thresholds in outdated systems has far exceeded opportunity costs and risk costs. The rigidity of data management has made reliance on historical paths not only unbreakable but also requires payment or incurs greater costs, forming a terrifying "Data Medieval" effect.
This phenomenon permeates various industries and corners of the globe from top to bottom, with excessive digital abuse and financial restrictions hindering development in every sector. To give a simple example, based on my experience in VC for over 15 years, if you rigidly judge whether a person can secure financing based on their bank KYC, then 99% of businesses and innovations in the world will be extinguished.
In the face of the entropy increase failure of the global financial system and social management environment, 2026 will inevitably enter a further state of disorder and reorganization. A large number of rules and industries will be rewritten, and it will also be unavoidable to fall into a chaotic transition period lasting at least 10 years.
3. The Issues Behind the Resurgence of RWA as a Mainstream Narrative in 2025
The narrative of RWA made a remarkable comeback in 2025 for a simple reason: the credit collapse of the first curve and the absence of a new term with consensus for the second curve led RWA to temporarily step in and win this year's MVP.
Two months ago, while communicating with an industry OG friend from Silicon Valley, he suggested that I focus on positioning RWA Finance after learning about Cicada Finance's upcoming announcement of its listing plan. I followed his advice while also retaining Onchain Asset Management as the main focus, leading to today's Onchain Asset Management for RWA Finance. Undoubtedly, both Onchain Asset Management and RWA Finance will remain strong mainstream tracks in the 2026 market.
RWA, aside from its name, is not experiencing a revival but is being built from scratch. The problem lies in the vastly different understandings of the term RWA among those who use it. As of H2 2025, the understanding in most parts of the world is still close to: a crowdfunding behavior that tokenizes assets.
Most people who engage with RWA do so not from an industry-building perspective but from their own needs, which is understandable. However, just like the issues faced by Crowd Funding during the P2P and E-commerce era, a demand-driven market will force platforms, channels, and the market itself to present a one-sided problem, causing the industry to rapidly develop in the wrong direction.
What is the difference between RWA without fair value and the equity crowdfunding of yesteryear? Is there a necessity for tokenization of RWA assets that lack liquidity? Conversely, do all RWA assets truly need liquidity? These questions have evidently not been thoroughly considered or reached a consensus within the overall market in 2025, and some deeper commercial confidentiality issues cannot be discussed here for the time being.
The current asset distribution data for RWA is provided with a relatively detailed analysis in Coinbase's report. T-Bills, Commodities, Liquid Funds, and Credit Loans remain the four mainstays, indicating the importance of quantifiable financial assets in RWA. In our view, the RWA landscape in 2026 will undergo a certain degree of change; the aforementioned assets will still exist, but the actual business brought by DeFi and Crypto Finance from emerging developing economies will be consolidated into the RWA market as asset suppliers, with Stablecoin Payment and SupplyChainFi becoming rapid growth directions.
4. Emerging Developing Economies and the New Global Geopolitical Landscape
In 2025, while developed countries and regions in the global economy and finance struggled with how to formulate management policies regarding Stablecoin and Crypto Finance, the development speed of emerging developing countries and regions was astonishing and beyond imagination.
"What they all want are stablecoins, or platform tokens will do." This was the consistent feedback from cross-border trade and payment companies this year. In addition to Nigeria, India, Brazil, Indonesia, and Bangladesh, many other countries and regions in Africa, South America, South Asia, Southeast Asia, Eastern Europe, and the Middle East have also shown exponential growth in the application of Stablecoin and Crypto Finance for three consecutive years, with actual proportions far exceeding those of developed economies, many surpassing or catching up to the usage volume of local mainstream fiat currencies (Note 10).
These numerous new economic entities in emerging developing economies are rapidly expanding in the form of "off-balance-sheet assets," forming a stark contrast to the current management dilemmas in the mainstream world. Despite significant differences in economic strength and consumption capacity across different global regions due to historical accumulation, it is evident that the analytical data of the global mainstream economy has long been completely distorted. Faced with excessive regulation leading to stagflation on one side and rapidly growing new environments on the other, it will take no more than five years for the global economic landscape to be reshaped, and geopolitical relationships will undergo drastic changes accordingly.
Regarding the initial question ii), I clearly have an answer. The true Nash equilibrium reconstruction will not occur by breaking and reshaping within the existing global economic system but will certainly be formed through external forces breaking the global new pattern, resulting in a complex new reconstruction. The native development speed of Crypto and Open Finance will far exceed the speed at which traditional economies and markets can accept and understand, and 2026 is likely to become a significant turning point for this disorderly reconstruction.
5. DeFi 2.0, DAT 2.0, Tokenomics 2.0
In this report, Coinbase began to bet on some new terms, including DAT 2.0 and Tokenomics 2.0, which are essentially branches of DeFi 2.0 that the industry is already familiar with. The definitions of these concepts are quite good, and I will elaborate on them here.
In 2025, the DAT concept successfully spread from MSTR to the global mainstream financial market, with a very simple underlying logic: DAT premium multiple = market capitalization of the stock ÷ NAV (Net Asset Value) of its held BTC (or other mainstream Crypto); however, this premium multiple rapidly declined or even inverted from Q3 to Q4, quickly ending this year's global DAT 1.0 craze.
The fundamental reason for the decline in DAT 1.0 value and the end of its financial effects is that the capital multiplier's friction coefficient is too small, the story is simple, and price transparency expectations are limited. The Davis double hit and double kill are too direct; once the confidence shifts between bull and bear, it will quickly dissipate.
The essence of the DAT concept in the industry value of 2025 lies in the exhaustion of traditional financial stock market concepts, where the bubble is too large for EV to support, and the credit collapse of the first curve in Crypto, with both markets shifting their focus to seek warmth in each other.
Why can DAT 2.0 continue the value of the coin-stock linkage? Simply put, DAT 1.0 is the value transfer from the first curve of Crypto to traditional finance, while DAT 2.0 is the value integration from the second curve of Crypto to traditional finance. Unlike the former, the latter's value has long-term sustainable development potential. In 2025, Ondo, Ethena, Maple, Robinhood, and Figure have already made good samples in DAT 2.0, and more emerging enterprises will rapidly develop within this space in 2026.
Tokenomics 2.0 is a broader concept. This year, we proposed various derivative products related to Tokenomics, such as Liquid Engineering and Yield Engineering, which are essentially further evolutions of Financial Engineering. In different practical financial cases, Tokenomics continuously corrects and optimizes each financial scenario like a financial circuit (Note 11), with each case being different. However, in the overall evolution of the industry, it will gradually form innovative universal protocols with overall significance, like the PT-YT provided by Pendle.
In this report, Coinbase only briefly touched on several issues when mentioning Tokenomics 2.0, such as Value Capture, Token Buybacks, Financial Engineering, Regulatory Clarity as Catalyst, and Protocol P&L, without logical connections or detailed elaboration.
Let’s break this down simply:
Value Capture is actually not related to Tokenomics 2.0; it is merely a necessary condition for the application and promotion of assets on the second curve. Tokenomics exists independently of value capture; in other words, Tokenomics without sustainable value capture has already been proven to be Ponzinomics on the first curve, and it will no longer be a mainstream market in the Crypto Market and Open Finance after this year.
Token Buybacks are an important condition for Asset Tokenization in RWA and DAT 2.0, and in my view, they are a necessary condition. More precisely, Asset Clearing Capability is a prerequisite for all asset investments. The healthy development of RWA Finance next year will largely depend on whether the market can reach a consensus on this point.
Regarding Regulatory Clarity, this has been discussed in Chapters 2 and 4 of this article, and it should be objectively expressed as Pros and Cons. Coinbase's discussion has its particularity, but as discussed, the greater and faster flexibility in development is actually found in emerging developing countries and new economic entities.
Moreover, the process of financial protocolization is not determined by Regulatory Clarity; it is highly correlated only in certain financially developed regions of North America and East Asia. The P&L of Protocol Finance is entirely a trading phenomenon of an upgraded Open Finance Market, determined by the market itself.
Both DAT 2.0 and Tokenomics 2.0 are just temporary terms; the second curve and DeFi 2.0 are the same, describing a phenomenon and inevitable trend of essential shifting in the current Crypto Market and Open Finance after experiencing 2025.
6. Review and Summary of 2025 and Analysis Outlook for 2026
As 2025 comes to an end, here is a review and summary of the predictions and analyses from this year:
February The Second Curve of Crypto Growth
“Zero-Sum Game and the Seven Giants at the Table,” “The Trend of RYA/RWA and the Rise of PayFi,” “Crossing the Chasm: The Second Curve of Crypto Growth,” “The Development Pattern of Crypto Under Compliance Issues and the Situations in Various Countries”;
“The Triple Kill of Debt, Stocks, and Currency and the Failure of the Merrill Clock,” “The Thucydides Trap and the Comparison of the Historical End of Five Kondratieff Cycles,” “Greenspan's Prophecy and the Significance of Crypto at the Intersection of the Kondratieff Cycle,” “The Correlation Shift Between Bitcoin and Chaos: The Shift in Inertia Cognition and Similarities with the Merrill Clock Issue”;
May The GENIUS Act and On-Chain Shadow Currency
“The Essential Reason for the Decline of Traditional Dollar Control,” “The Nominal and Substantive Purposes of the GENIUS Act,” “The Insights of DeFi Restaking for the Fiat World and the Currency Multiplier of Shadow Currency,” “Gold, Dollar, and Crypto Stablecoins”;
September The Trend of Asset On-Chainization Under Stablecoin Pricing Methods
“The Essence of the Genius Act is to Delegate the Issuance and Settlement Rights of Currency to Obtain Enhanced Currency Pricing Power,” “Stablecoins Triggered Global Financial On-Chainization and Asset On-Chainization Reforms Through Changes in Currency Pricing Forms,” “Reforms Rapidly Disintegrate the Long-Term Cartel Alliance of Traditional Finance, Bringing Opportunities for Interest Restructuring Amid Chaos,” “The Two Directions of Coin-Stock Linkage: Securitization and Tokenization and Market Characteristics,” “The Industry Characteristics and Issues of Stablecoins, DAT, Stock Tokenization, RWA, and On-Chain Asset Management.”
The outlook for 2026 has been extensively discussed in this article, and aside from question i), sufficient analytical viewpoints have been provided. The further disorderly reorganization of the macro environment and the consequent promotion of DeFi 2.0 both exhibit clear trends and inevitability.
Question i) is indeed a headache, whether in social economy or financial assets; trends and directions are always easier to judge compared to time and degree. Unlike the two Kondratieff cycles of the last century, the main differences under a similar paradigm environment are as follows:
a) The speed of information interaction to situation evolution is much faster, with differences exceeding 2.5-5 times from various aspects (Note 12);
b) The spillover space of global geopolitical contradictions is completely different, increasing the inevitability of conflict eruptions;
c) The nonlinear effects brought by AI and Crypto are far greater than those of industrial electrical automation.
On the other hand, many aspects remain largely unchanged compared to a hundred years ago, such as the hardware conditions for social management, which have not changed much, the natural lifespan of humans, the ability of a generation to digest long-term emotions, and the political and economic management cycles under different social forms remain generally similar.
In this context, during the management of enterprises over the past two years, I have often discussed with partners and gradually accepted a fact: it is essential to pay attention to nonlinear issues, learn to cope with and master nonlinear triggering situations, and incorporate unexpected changes into part of the plan.
Author: Yang Ge Gary
Date: December 28, 2025
Note 1: The first curve refers to the speculative environment created by consensus expectations during the 16 years of past Crypto development, continuously pushing up expectations to form a wealth effect.
Note 2: The choice of 1935 instead of the end of World War II in 1945 is because the price of gold experienced a cliff-like rise in 1934 after decades.
Note 3: Crossing the Chasm is a classic paradigm of the development of innovative things, metaphorically indicating that Crypto and Open Finance in previous years were still in the Early Adopter stage.
Note 4: The estimate of $1500T uses the annual trading volume of the foreign exchange market and the securities and commodities market as a rough calculation basis to obtain the financial magnitude.
Note 5: The prediction market is actually a transformation extension of the first curve. When the consensus of pragmatic expectations can no longer support a consensus credit, a short-term pragmatic event-type bet becomes the new consensus credit soil for this type of risk preference.
Note 6: The end and intersection of the Kondratieff cycle have been mentioned multiple times in previous articles, such as in Chapter 2 of "Trump's Tariff Policy Will Trigger the End of the Kondratieff Wave and a Qualitative Change in Bitcoin," comparing the Thucydides Trap with the historical end of five Kondratieff cycles. From 2020 to 2025, the world is in the transitional process between the end of the last Kondratieff cycle and the beginning of the next. The main difference this time refers to the end of 2025 and the accompanying socio-economic phenomena marking the conclusion of the last Kondratieff cycle.
Note 7: In the article "The Dramatic Changes in the Landscape After Trump's Victory in November 2024," it was first mentioned that "by the end of 2024, most countries and interest entities in the world are still in an environment of semi-feudal, semi-decentralized state capitalism," which has been adjusted to describe it as "semi-feudal, semi-monopolistic capitalism."
Note 8: Objectively speaking, emotional value itself has become an important factor in today's global secondary financial market, with economic policy and market confidence being mutually causal under the connection of emotional value.
Note 9: Regarding the issue of the traditional financial cartel alliance being broken, a detailed explanation is provided in Chapter 3 of "The Trend of Asset On-Chainization Under Stablecoin Pricing Methods."
Note 10: Economic data from underdeveloped emerging developing countries lacks publicly available and clear data materials; relevant information is based on non-public corporate confidential data.
Note 11: Financial Circuit and Web3 Tokenomics Theory, written in October 2022, details the underlying framework mechanism for constructing the Web3 Tokenomics financial system.
Note 12: This multiple has only relatively narrow reference significance: macro-wise 2.5 times = Merrill Clock cycle 10 years / Bitcoin cycle 4 years; micro-wise 5 times = 7x24 hours trading / 5x6.5 hours trading; it does not effectively represent the differences in actual production and social iteration.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
