Crypto no longer needs Bitcoin.

Written by: nikshep

Translated by: Luffy, Foresight News

AI has stolen the risk speculation attribute of Bitcoin, and stablecoins have replaced Bitcoin as the universal circulating currency in the crypto market; the anchor that once quietly maintained the fragmented crypto world is no longer Bitcoin. This is the most favorable structural change in the crypto industry in years, yet very few people understand the logic behind it.

This week, Bitcoin fell below $70,000, crashing approximately 45% from its peak last October, and the market is in mourning. The spot ETF has faced historic large outflows of funds, creating the longest redemption cycle since its launch; the market for Bitcoin, known as "digital gold," is languishing, while physical gold is on a bullish streak.

But the market's regret is misplaced.

As Bitcoin continues to decline, an on-chain exchange that most people have never heard of surpassed Coinbase in trading volume last year; a certain prediction market platform's valuation soared to $20 billion with an annual fee income reaching $365 million; privacy coins, which the market once viewed with skepticism, surged 70% in a week, creating an independent market during Bitcoin's sideways consolidation; and a long-underestimated underlying network has realized cross-chain privacy transfers, allowing users to transfer assets without needing to purchase its native token.

The crypto industry has not sunk along with Bitcoin; crypto no longer needs Bitcoin.

This statement may seem bearish at first, but it is actually quite the opposite. Crypto is maturing, bidding farewell to the era where all cryptocurrencies were tied to Bitcoin's fluctuations and relied on market speculation. It is evolving into an ecosystem based on the real economy priced in dollars. Various projects are relying on their own fundamentals for survival, and a brand new underlying interconnected infrastructure is replacing Bitcoin, connecting the entire crypto world.

This year, Bitcoin has lost two major core functions, replaced by two new phenomena, and the original ecological vacancies are nurturing entirely new opportunities.

AI has taken away Bitcoin's risk speculation capital

Bitcoin itself does not generate cash flow, lacks profits, dividends, and interest, and its price fluctuations are almost entirely determined by the amount of speculative capital available. It is a typical pool of funds: prices soar when liquidity is loose, and they deeply correct when funds tighten. In 2026, the AI sector will powerfully emerge, continuously diverting the speculative hot money that would originally flow into Bitcoin.

This year, global AI infrastructure investment is expected to be in the range of $700 billion to $830 billion, roughly equal to half the size of all U.S. investment-grade bonds, and by 2030 it is expected to challenge $7 trillion; the AI industry contributes about 5% to U.S. GDP, with its pull on the U.S. economic increment surpassing consumer spending. Just Nvidia alone accounts for 8% of the S&P 500 index weight. AI is no longer just a regular sector; it has formed a super strong capital gravity field, reshaping the entire market capital pricing logic.

AI continuously siphons off Bitcoin capital from three major dimensions:

1) AI has captured the core of the narrative. Bitcoin's past core selling point was "betting on future asymmetric opportunities," but AI has real revenue, a continuously exploding market demand, and support from various countries. Investors can position themselves through index funds. Today, institutions classify Bitcoin as the same kind of risk asset as non-performance-supported speculative stocks. In the same risk pool, one side has profit realization, while the other relies purely on expectations, leading to a natural ongoing retreat from Bitcoin, and the root cause of the consecutive ETF redemptions is here.

2) AI needs funds. The expansion of AI primarily relies on debt financing; the bond issuance scale of cloud giants has surpassed last year's total. Private credit aimed at the AI industry has broken through $200 billion. High-quality targets are issuing massive bonds to absorb top-tier funds, leaving funds that might flow to high-risk assets like Bitcoin trapped at layers of filtering.

3) AI constrains a high-interest rate environment. The AI industry has pushed up production costs for electricity, storage chips, and other resources, with relevant categories generally increasing in price by 5% to double digits, anchoring U.S. inflation around 3.8%. The Federal Reserve has been forced to maintain a high benchmark interest rate of 3.50% to 3.75%, with almost no expectations for rate cuts throughout the year. AI is not only competing for funds with Bitcoin but is also macroeconomically locking in tight liquidity.

In addition, the computing power sector is also experiencing disruption. Bitcoin mining and AI computing power essentially both transform electricity into computing power, competing for the same electrical resources, whereas the economic efficiency of Nvidia's servers per unit of power far exceeds that of mining machines. Last quarter, leading publicly listed mining companies incurred a comprehensive cost of about $80,000 to mine one Bitcoin, but Bitcoin's market price was only $70,000, resulting in a loss of $19,000 per coin. Many mining companies are pivoting to AI computing power: the industry has signed over $70 billion in AI supercomputing cooperation orders, and leading mining firms expect AI business revenue to comprise up to 70% by the end of the year. Core Scientific invested $10.2 billion to transform a 300-megawatt Bitcoin mining site into an AI data center; Riot sold its own Bitcoin and leased land to AMD. These entities that once safeguarded the security of Bitcoin’s entire network are now collectively fleeing.

Compared to the feared risk of quantum computing, AI brings permanent structural changes. Even if future quantum computers can decipher Bitcoin's encryption algorithms, the industry can repair protocols through post-quantum password standards and soft forks; however, AI's seizure of narratives, capital, and electrical resources is irreversible, and no protocol upgrade can recover that. The first core value of Bitcoin has completely collapsed.

Dollar stablecoins have replaced Bitcoin as the foundational currency of the crypto market

This is the key change that is easiest to overlook. In the history of crypto development, Bitcoin has long been the industry’s reserve asset and the intermediate currency for inflow and outflow of funds: fiat money is first exchanged for Bitcoin, then for various altcoins, with all assets priced in BTC. Any out-of-market funds entering the space must first buy Bitcoin; this was also the root cause of all coins in the market being tied together in rise and fall.

Stablecoins have severed this chain. The trading volume of USDC has surpassed USDT for the first time since 2019, and global stablecoin annual trading volume has exceeded $30 trillion. Now the path for users to deposit funds has changed to: fiat → USDC → various assets, completely kicking Bitcoin out of the circulation chain. Polymarket has launched a platform-native dollar stablecoin (anchored to USDC 1:1 reserves) this year, and Hyperliquid settles all platforms in dollars. As industry insiders summarize: stablecoins have become the underlying universal reserve currency for applications, with various platforms merely placing their own labels on it.

Therefore, when market risk aversion intensifies, leading dominance charts show a decline in Bitcoin's share, while stablecoins' share increases. The funds have not flowed out of the crypto market; they have simply switched internally to dollar-priced assets. Investors no longer need to hold Bitcoin for exposure to the crypto sector, as dollar stablecoins have taken on this function. On-chain transactions depend entirely on dollars, and on-chain funds can no longer bring buying pressure to Bitcoin. The second core function of Bitcoin has officially ended.

After detaching from Bitcoin, the crypto economy is thriving

Without Bitcoin, the currently operational products are no longer speculative chips tied to price, but commercialized projects with real cash flow.

The existence of Hyperliquid is enough to disprove the narrative that "cryptocurrencies are dying." This on-chain spot contract exchange matches deep liquidity and transaction speeds comparable to top CEXs, allowing users to self-custody their assets; last year, its total transaction volume was $2.6 trillion, exceeding Coinbase's $1.4 trillion, with annual revenues of $800 million to $1.3 billion. The platform utilizes 97% of its fee revenues for secondary market buybacks and destruction of the native HYPE token, with an annual buyback volume of about $1.3 billion, accounting for 7% of the total market cap of the token. The buyback rate is 4-5 times that of Ethereum and 14 times that of Solana. The project operates without windfall investment, relying on community airdrops and fee buybacks to achieve a value closed-loop, with trading volume fluctuations entirely driven by trader demand, unrelated to Bitcoin price movements, and the platform's scale has risen against the bearish trend in Bitcoin.

Another main player is the prediction market leader Polymarket, which has a valuation of $20 billion, with annual transaction volumes of $250 billion to $300 billion, annualized fees of $365 million, and daily active users increasing 2.5 times in five months; it is launching a platform-native dollar stablecoin, with tokens set to go live soon. Polymarket products focus on betting on elections, sports events, and global occurrences, with demand unrelated to Bitcoin price fluctuations.

These types of projects now employ traditional corporate valuation logic: revenues, user scale, valuation multiples, which signify the maturity of the industry.

New sector dividends: Privacy becomes a scarce resource

If Bitcoin's transparent and monitored ledger was the default option of the past, then privacy is the new upgrade option. This is a currency that can only be obtained on-chain, providing self-sovereignty and untraceability. However, the ways to purchase this currency are distinctly different, and this difference is key.

Self-custody privacy. Zcash (ZEC) surged 70% in one week, with a total market cap approaching $10 billion, an increase of over 45 times from its 2024 low, emerging with an independent market during Bitcoin's consolidation phase. Its fundamental support is solid: the volume of privacy transactions has increased from 11% last year to 30%, and most privacy assets do not revert to public chains, causing a continuous contraction in circulation while demand rises. The compliance pressure once imposed on privacy from regulation is now helping to promote the value of privacy coins: Robinhood has launched ZEC for spot trading, and Grayscale has submitted the first privacy coin spot ETF in the industry. Privacy has evolved from a single application scenario to a long-term investment logic. However, ZEC requires separate purchase of tokens and migration to public chains for use.

Universal privacy for all chains. NEAR does not require the purchase of privacy coins or asset migration across chains; leveraging on-chain signature technology, a single NEAR account can directly control native assets from Bitcoin, Ethereum, and Solana, without wrapped tokens or cross-chain bridge risks, utilizing a decentralized multi-party secure computing network for key custody. By enhancing with a confidentiality intent protocol, users can privately transfer assets across any public chain, with counterparty and routing information hidden throughout, relying on privacy sharding for execution. User assets remain on their original public chains, and privacy becomes an overlayable universal underlying service.

Compared to a single privacy coin, this model is far more disruptive. Users do not need to hold ZEC, nor leave the native ecosystems of Ethereum or Bitcoin; privacy transforms from a specific asset characteristic into a function built into all trading scenarios.

The underlying coordination layer in the multi-chain era replaces Bitcoin's pivotal role

Looking at the entire crypto landscape: the industry is no longer tending towards unification but is instead expanding with parallel chains, with dollar stablecoins becoming the underlying universal currency, and AI entities autonomously holding credentials, calling interfaces, and transferring funds, becoming a new participant.

The massive multi-chain + intelligent entity ecosystem urgently requires interconnected infrastructure, a role that Bitcoin has assumed over the past decade; now this vacancy is being filled by a new coordinated privacy layer: cross-chain signing, dollar settlement, privacy transactions, and automatic execution by intelligent entities.

NEAR is targeting this track. It supports AI entities with USDC for private settlements, relying on hardware secure zones for confidential computation, creating a signing network as the key management hub for the intelligent economy, providing cross-chain and privacy services without public chain binding for users and robots.

Another product in this track is Venice. It focuses on AI applications for private interactions, attracting a large number of native Web2 users; the platform token VVV, when staked, can share AI inference profits, and the project has achieved a buyback and destruction of over 40% of the token's circulation volume, driven by AI usage demand, with the token's price trend decoupled from Bitcoin.

Currently, the focus of the new industry has taken shape: it is no longer a single currency but an underlying infrastructure, with various real projects relying on this foundation to create genuine value.

Conclusion

Putting them together: the dollar is circulating cash across the industry, project tokens like HYPE, POLY, ZEC, NEAR, and VVV correspond to corporate equity, and the privacy cross-chain layer acts as the foundational infrastructure linking the entire industry, with Bitcoin merely being a segment of the ecosystem. AI is capturing macro speculative capital, physical gold is absorbing risk aversion demand, and stablecoins are monopolizing reserve currency functions; under this triple pressure, Bitcoin's glory is no more.

For the past decade, the whole industry has focused on Bitcoin’s price movements, with all altcoins following Bitcoin's trends; this era has finally come to an end. Now the evaluation of projects is aligned with traditional corporate standards: do they have real revenues, active users, and can the tokens capture the project’s growth profits?

Do not use Bitcoin’s price fluctuations to judge the warm or cold status of the crypto industry anymore. Focus on project revenues, user growth, and the interconnected underlying infrastructure: realizing cross-chain privacy transfers, dollar settlements, and human-machine universal cross-chain infrastructure.

AI has taken away macro speculative funds, the dollar has taken away the status of reserve currency, and new underlying protocols have shouldered the responsibility of mutual connectivity across the industry. Bitcoin falling below $70,000 is not the end of the crypto industry, but a historic turning point for crypto to completely break free from Bitcoin’s shackles.