Author: Chris Dixon, Ali Yahya, Guy Wuollet, Eddy Lazzarin

Translation: ChainCatcher

Cryptocurrency cycles often follow certain patterns

Speculative waves bring attention and capital. Some of it is wasted, while another part funds infrastructure that would not have been built otherwise. After the noise subsides, what remains often looks more useful than it did at the peak and more enduring than at the trough.

If you can step outside the confines of price, you will see this in every cycle: what has truly been built, and what people are still using after the hype dies down. We are currently in such a relatively calm moment. The signals coming through are among the most encouraging in recent years.

The clearest evidence comes from stablecoins

Trading volumes fluctuate with the market, but the usage of stablecoins has continued to rise even during downturns. People use them for saving, cross-border remittances, and payments, which often expose the slowness, high costs, and unreliability of traditional alternatives. The growth of stablecoins seems less about speculation and more about network adoption: the compound growth in usage is because the technology itself is useful, not because people have expectations about price movements.

Blockchain is also proving its value in capital markets

Since the last cycle, we have witnessed significant growth in perpetual futures for price discovery, the role of prediction markets in revealing truths, and the development of on-chain lending in the stablecoin credit market. Traditional assets have begun to go on-chain, and on-chain finance is starting to be applied to assets beyond network tokens. A new financial system is taking shape—it can run continuously, settle almost instantly, has costs close to zero, and is open to anyone who can access the internet.

Regulatory direction is also improving. The GENIUS Act is a typical example of prudent policy: clear definitions, strong safeguards, and leaving room for builders. We expect that other areas of the crypto market will also see more regulatory progress through legislation and rule-making. This will provide consumer protection, certainty for builders, and pathways for mainstream institutions to participate.

It is worth taking a step back to think: why is this especially important now?

Software is becoming increasingly complex and harder to trust. Artificial intelligence systems are powerful, yet largely opaque. The infrastructure that the internet relies on is more centralized than ever. In this context, the attributes provided by crypto networks become increasingly important rather than more marginal:

• Transparent and verifiable systems
• A network aimed at global access from day one
• Economic models that align the interests of users, creators, developers, and operators
• Infrastructure that does not rely on a few intermediaries

These attributes are being reflected in actual products: in payments, financial services, creator platforms, decentralized infrastructure, and new modes of collaboration between humans and machines. Most of these are built by startups and are being increasingly adopted by financial institutions, tech companies, and other organizations to provide faster, cheaper, and more reliable services.

On a practical level, this means global instant remittances, not needing to rely on banks to hold dollars, tokenizing assets for frictionless movement, accessing composable networks built by others, and embedding these capabilities into various applications. It also includes some new models that were previously never possible: users can directly own their own assets and identities, holding inviolable digital property rights; software agent clusters can make decisions on behalf of users, execute actions, and complete transactions, accessing computing power, data, and services on demand, as well as increasingly autonomous networks being able to achieve self-funding, governance, and evolution through code.

This is why we are announcing the launch of the new Crypto Fund 5. This $2.2 billion fund has been established for this moment. The founders we support through this fund are focusing on less noticed, yet we believe more long-term valuable parts of the cycle: transforming new infrastructures into products that people use daily.

The significance of every important computing platform ultimately comes about in this way; so too will crypto technology.

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