Written by: Luke
Translated by: Saoirse, Foresight News
You are standing on the eve of the largest transformation in cryptocurrency history. If you want to continue delving into this industry, you must keep a close watch on everything that is happening right now.
Currently, there are three core issues facing the entire industry:
- What exactly determines the value of tokens?
- How do we bring various cutting-edge technologies into the blockchain ecosystem?
- What happens when cryptocurrency is no longer an independent asset but becomes the underlying infrastructure of traditional finance?
I could theoretically analyze these three questions one by one; countless individuals do this every day, but mere theoretical discussions will never lead to conclusions. Therefore, I intend to take a different approach: to outline the real changes that will occur in the industry from now until 2029 in phases, marking specific entities, data, and timelines, with content detailed enough that in three years, people can look back and verify whether my judgments were accurate. This is just one of many possible futures, and some of the inferences will inevitably be incorrect. However, vague, empty future predictions cannot be falsified, and unverifiable viewpoints are of no value. I prefer to provide clear but potentially erroneous judgments rather than say ambiguous platitudes that could never lead to failure.
This prediction stems from my work environment: I have long been engaged in the intersection of cryptocurrency startups, industry regulation, and venture capital, communicating deeply with alternative asset managers and capital allocators every week. This does not necessarily mean my judgments are correct, but my deductions have thoroughly considered various constraints present in reality.
Mid-2026: Quality assets are no longer various tokens
By mid-2026, before the market has reached a unified definition of token value standards, the perpetual contract market for non-publicly issued enterprises has already identified product-market fit.
This transformation began with the Hyperliquid platform. The platform's SpaceX non-public perpetual contract initially suffered criticism for being manipulated by malicious liquidation through Ventuals, but later it became the most closely watched price reference for both primary and secondary markets. By July, major banks and hedge funds were using this contract to price their privately held assets, while trading software such as Robinhood, aimed at ordinary users, relied on it to predict the opening prices after companies go public. In the weeks leading up to large company IPOs, the price of this perpetual contract would closely match the final opening price, to the point that the investment banking underwriting teams, who charged seven-figure service fees and handled pricing, lost face. The positions in the perpetual contracts of OpenAI and Anthropic reached new highs. For a time, this native cryptocurrency exchange became the most reliable channel for obtaining real-time valuations of top unlisted companies worldwide.
Meanwhile, ordinary traders began to have a fundamental question: What allows the other various types of coins to continue trading on-chain? The altcoin market has been in a bear market for 18 consecutive months, with project founders and investment institutions continuously exiting through large split transactions and timed algorithmic sales; in contrast, $HYPE, the only token to establish a complete value capture loop, saw its price surge, outperforming all market assets. More than a dozen token value capture mechanisms were introduced in the industry, but most failed to create positive feedback loops, stemmed from the fact that the projects these mechanisms relied on had no asset value. The industry first solved the technical problem of how tokens could capture value, and only afterward sought real assets worthy of carrying value.
This upside-down industry status is the underlying driving force behind the boom in non-publicly issued perpetual contracts. What the market truly craves has never been the perpetual contract products themselves, but quality assets; and by mid-2026, the only quality assets that could be traded on-chain were synthetic revenue certificates of real enterprises that had no connection to the crypto industry.
End of 2026: The AI track does not require cryptocurrency
Anthropic and OpenAI achieved technological breakthroughs, leading to a fierce competition in the foundational large model sector, with the market starting to price general artificial intelligence (AI) ahead of time. The resulting chain reaction was that funds related to all non-top foundational large model companies continually flowed out. Capital began to view general AI as a core asset on corporate balance sheets, rather than as a standardized tool aimed at the entire industry.
In such an environment, the "AI + crypto" track quietly fell into decline. It is not that this logic was disproven, but that the industry had no time for debate. The x402 payment protocol officially launched, yet there were no paying users; the envisioned on-chain agent economy never gained a foothold, and all existing agents settled in USD via APIs, indistinguishable from traditional software industry models. Venture capital practitioners reached a consensus: the AI industry itself does not require cryptocurrency as support, and investors no longer forcefully promoted this track.
The only truly successful product-market fit in the "AI + crypto" category is prediction markets. The trading volume around predictions of major foundational model performances grew rapidly, becoming the most accurate financial tool for betting on the core variable that can influence massive funds — which company will have the best-performing large model in the next month.
Aside from the clamor of trading floors, another quiet transformation is occurring: when the CLARITY Act passed in the Senate in mid-2026, most traders believed this act was inconsequential, and the market did not see an upswing. However, by the end of the year, various asset tokenization projects accelerated deployment. Large asset management institutions moved from the pilot phase to formal operations, quietly without publicity — the core work of compliance departments was to avoid making projects overly high-profile. The tokenized targets centered on unremarkable intermediate categories within money market funds and private credit. These assets had no KOLs promoting them on social platforms, nor any K line charts available for speculation.
By the end of 2026, the cryptocurrency industry divided into two nearly independent economic entities: one was bustling and lively, relying on bets on AI sector trends for profits; the other was silent and low-key, gradually being absorbed by the traditional financial system through compliance documents. The vast majority of practitioners' attention focused on the former market.
Early 2027: Major public chain foundations define development routes
Generic public chains can no longer have their cake and eat it too, nor can they maintain vague positioning.
For many years, major mainstream foundations have consistently told two completely separate narratives: publicly proclaiming visions for mass deployment aimed at ordinary users, while privately promoting services tailored to institutions during negotiations. The two narratives never intersected. By early 2027, the contradictions between these two development routes became starkly apparent.
The retail track aimed at individual investors became highly concentrated, with the only retail products addressing actual user demand seeing trading volume aggregated on a few platforms; whereas the institutional business was currently the only track that could generate stable paying clients. Major foundations successively determined core development directions, choosing a highly unified course: building corporate sales teams, providing supporting compliance services, launching a universal compliance development toolkit for tokenized asset transfers and broker licenses, expanding Wall Street partnerships, and improving privacy trading functionalities.
Media and crypto social platforms interpreted each strategic shift as a sacrifice: prioritizing service for institutions, abandoning ordinary retail traders, opting for serious financial clients, and discarding speculative casino attributes.
However, people within the foundations did not agree with this interpretation. Instead, the teams double downed on expanding crypto services aimed at ordinary users, albeit with a different deployment logic. Over the years, the threshold for qualified investor designation has continuously loosened, continuously expanding the pool of eligible participants. The institutional underlying facilities built by the foundations would soon open up to ordinary users who have not yet been classified as "qualified investors," although the infrastructure teams were well aware of this but would not publicly announce it. The compliance infrastructure teams only discussed banking clients externally because banks are the current paying parties.
The low-key institutional market formed at the end of 2026 welcomed an unprecedented influx: the future of a massive number of ordinary compliant investors. The previously fragmented economic entities finally established a bridge of connectivity through "qualified investor qualification verification."
From mid-2027 to the end of the year: Threefold development ceiling
The new generation of tech companies reignited the private equity market: financing in artificial intelligence-biological integration, real-world AI, and humanoid robot tracks were all oversubscribed, causing company valuations to skyrocket, yet all were still years away from going public. The perpetual contract platform quickly launched corresponding targets within just weeks, and the open interest in synthetic contracts for these revenue-starved companies constantly set new records. The market rules of 2026 were replayed, with even larger volumes of funds: globally sought-after quality assets were concentrated in the primary private equity market, and the only corresponding targets that users could trade on-chain were synthetic perpetual contracts settling capital fees every eight hours.
However, the three types of markets each hit their developmental limits, constraining industry growth:
The ceiling of non-publicly issued perpetual contracts: Real private assets grow steadily through traditional private channels, compounding quarterly, rendering them virtually invisible on crypto social platforms focused solely on price explosions. The growth of perpetual contracts lags far behind real private assets, primarily constrained by the fact that private securities cannot publicly solicit investors, while the crypto industry's most adept traffic model — showcasing price trends to attract retail investors — cannot be applied to these assets legally. At the same time, perpetual contracts face structural shortcomings; they require near-IPO events as price drivers and can only cover mature companies in the later stages; mid-term startups in sectors like bio-AI and humanoid robotics, which are far from exit channels, cannot launch corresponding synthetic contracts. For the vast majority of primary market targets, the regulatory protections for real ownership channels are not suboptimal choices but the only legally viable trading tools, although the law prohibits widespread publicity.
The ceiling of stablecoins: The total circulation of stablecoins continues its steady upward trend, never halting expansion, but major institutions are quietly reducing their expansion plans. The mid-term elections changed the balance of power in congressional committees, and the candidate list for the 2028 presidential election gradually took shape, with several popular candidates publicly opposing the issuance of private dollar tokens. Although the relevant legislative clauses enacted in 2025 and 2026 have not been abolished, the enforcement authority of these laws belongs to the new government. Financial executives at major banks must account for the risk scenarios of stricter regulatory attitudes from the next government when formulating their ten-year settlement plans. The industry will not completely halt stablecoin projects but will lengthen the deployment cycle and shrink trial scales, with everyone waiting for the results of the November 2028 elections. The on-chain dollar circulation speed is entirely bound to uncertainties at the policy level, which were at a high in mid-2027.
The ceiling of asset tokenization: This conservative sentiment spread throughout the entire institutional crypto market. Tokenized private credit and fund share products continuously launched, all achieving compliant deployment, yet institutions deliberately controlled the project scale, with no one willing to become a cautionary tale at the next year's Senate hearings.
The commonality among these three tracks is quite clear: the products themselves have logical validity, and market demand has been thoroughly validated, but external policy forces from outside the industry severely restrict the growth pace. Excluding the volatile ups and downs of cryptocurrency itself, 2027 is actually a year of steady growth for the industry; it is just that the crypto industry has long been accustomed to viewing only exponentially rising markets as successes.
2028: Compliance entry barriers are no longer scarce
(After this point, the precision of predictions declines: previously, predictions were made quarterly, but after 2028, they are only projected annually, and the expected error range expands. This article makes a core assumption: the Democrat candidate wins the November 2028 elections. If the election results differ, the timing of various industry events will shift, but the overall development framework will not change.)
The speculative casino attribute of the crypto market gradually faded, and hardly anyone could pinpoint the turning point. The efficiency of market capital harvesting mechanisms was too high, and each round of new liquidity added from 2026 to 2027 was less than the last, with funds being withdrawn more quickly by a few leading players. The market did not experience a signature crash event; meme coin speculation still intermittently appeared with daily price surges, but after a certain point in the first half of 2028, speculative trading ceased to be the core focus of the industry. Trading volume existed merely as statistical data, no longer dominating the ecological culture of the industry. Some traders shifted to participating in prediction markets that leveraged speculative excitement; some remained in the continuously shrinking speculative segment; and many traders took advantage of the past year to obtain a qualification that no one predicted in 2026 — acquiring qualified investor certification.
The panic at the policy level gradually eased as market pricing digested throughout the year. The two major parties' popular candidates accepted industry donations, merely expressing their positions differently, yet with a unified core stance: the crypto industry requires regulation, not an outright ban. Previous practitioners who viewed the previous administration's lax regulations as a harvesting window were investigated one after another. The industry gradually realized that the regulatory cleanup of chaos was actually a positive signal: the government distinguishes between speculative harvesting businesses and financial infrastructure, allowing infrastructure to receive capital investments with peace of mind. Financial executives from major banks who had contracted pilot programs quietly resumed expansion plans before the elections; by the time election results were in, the majority of policy risk premiums had already been absorbed.
The most profound lesson of 2028 for the industry came from the trading market everyone was focused on: at the beginning of the year, on leading trading platforms, a large position capable of moving the market was forcibly liquidated across several popular non-publicly issued perpetual contracts, triggering the chain liquidation risks that the market had worried about since the Ventuals manipulation incident. Within hours, billions in open positions were cleared, systems automatically forced liquidated, losses borne collectively by the market, with profits for the winners significantly diminished. In the aftermath, all parties were unable to determine whether the turmoil stemmed from malicious manipulation or merely from a market accident, and this ambiguity itself became the core conclusion: a market lacking underlying asset pegging does not possess a fair benchmark price, and even defining "market manipulation" becomes impossible, let alone providing evidence. Publicly listed company perpetual contracts are constrained by underlying spot prices, but non-publicly issued perpetual contracts lack a bottom anchor. While real private shares do have compliant trading channels, they are not allowed to publicly draw in large volumes or broadly price; every price of a perpetual contract is merely a self-estimate by the platform, with significant potential for human intervention. This chain liquidation does not indicate a failure of the synthetic contract market itself, but rather reflects the inevitable result of market mechanisms operating without support from real underlying assets.
For the past decade, the ban on public solicitation of private securities has always been packaged as investor protection policy. However, this market tumult proves that this rule merely blocked ordinary investors from legally guaranteed trading channels, forcing them into high-leverage, unpegged synthetic contract markets. The true dividing line has never been between synthetic assets and real assets, but rather whether trading rights have the force of law behind them.
Post-crisis regulations are implemented not as reforms but as improvements to financial underlying mechanisms: the regulator released guidelines allowing qualified investor groups who complete qualification verifications to publicly advertise the secondary market transfer of private securities (limited to second-hand shares, excluding initial enterprise financing), with the eligible investor group continuously expanding over the years. The underlying logic is straightforward: the synthetic contract market needs underlying price anchors, and the least costly solution is to open up the channels for public circulation of real private assets. A promotional restriction regulation that has been in use for ninety years was largely relaxed in scope, solely to improve the derivatives market.
The heat in the first week of the new regulations rivals that of meme coins being launched, with the only distinction being that the traded assets are equity stakes in real enterprises. The listing of second-hand shares in private equity, sharing snapshots, and promoting through communities became fully legalized, marking a first in the history of this asset type. Opinions on social platforms became polarized: half saw it as a new financial foundational tool, while the other half worried that retail investors would merely become exit buyers for venture capital firms. The latter's intuition is not wrong, but their judgments lag behind the times: when assets are mere air tokens without physical backing, such concerns hold; but now the traded assets are the revenue rights for real companies proven by two years of activity in the perpetual contract market.
Funds first flowed into perpetual contracts already validated by interest in late-stage mature companies; further, because real ownership does not carry capital costs or face constraints tied to listing timelines, funds flowed into mid-stage startups that perpetual contracts cannot cover. Perpetual contracts did not perish but transformed into a supplementary segment for late-stage corporate transactions, no longer capturing all core market traffic.
By December, the industry welcomed a new bull market, supported by the oldest foundational assets in finance, now finally gaining legitimate circulation channels.
2029: The market becomes the industry's only core storyline
The first year of this bull market, grounded in reality, is markedly different from previous cryptocurrency bull markets, and this difference is where the core value lies. The assets that continued to rise were all entities engaged in tangible business operations that could genuinely create social value. The new foundational asset class for ordinary users trading is private enterprise equity: biotech companies that have completed multiple rounds of clinical trials, humanoid robot manufacturers demonstrated to everyone, and AI labs where users previously traded perpetual contracts in 2026, now allowing direct ownership of real company shares.
The qualification threshold for accredited investors has been progressively eased over ten years, cultivating a new group of retail investors; assets that only institutions could participate in five years ago are now tradeable by ordinary compliant investors, most of whom would not categorize such transactions as "cryptocurrency investments."
The token track has completely differentiated along the core question posed at the beginning of this article: public chains that successfully transform into platforms for new market issuance and settlement infrastructure capture real business flows, equating platform tokens to revenue vouchers in business operations. All other tokens will face extremely realistic market rules: tokens lacking legally enforceable income rights or a complete value capture loop will not persistently drop in value as they did in 2026 for 18 months but will completely lose trading liquidity. The token value capture mechanisms that sparked endless debates throughout the industry in 2026 did not yield a single winning solution; the actual circulation of private physical assets directly rendered this debate meaningless.
Stablecoins continued the developmental patterns established throughout the entire cycle: maintaining steady compound growth without explosive surges. By the end of 2029, total circulation approximately doubled relative to mid-2027, with an average stable growth rate of about 20%. The upper limit of growth is not due to insufficient market demand, but rather a policy choice reached by consensus between the two parties: private dollar tokens develop moderately to meet practical needs while avoiding competition with sovereign currency systems. The speed of on-chain dollar circulation is tied to policy certainty; by 2029, the policy environment is stable and long-lasting.
Speculative segments still exist, contracting to fixed niche areas, occasionally witnessing short-term speculative eruptions, but their overall influence is equivalent to that of a sub-niche within the entertainment industry. Speculative traders diverted to prediction markets, the new secondary private equity market, and another previously unpredicted avenue from 2026: obtaining qualified investor status.
The third core question posed at the beginning of this article — how cryptocurrency transforms into traditional financial infrastructure — is ultimately answered in a silent manner: this question will entirely lose its discussion significance. The clearing and settlement functions depend on customized payment channels, public chains or a mix of both; only the operating teams will clarify the underlying architecture details, with ordinary participants neither understanding nor caring, much like how the average person does not delve into the clearing institutions behind brokerages. The gradual initiation of industry integration that started at the end of 2026 ultimately culminated in "complete invisibility." The ultimate victory of financial infrastructure is to become mundane and unremarkable. What remains in the public's view is the core product that the crypto industry has consistently cultivated through numerous speculative cycles — the asset trading market.
Thus, all three core questions can be answered through this deductive logic:
- What determines the value of tokens? The immutable core: a legal and enforceable right to claim income from real assets, leading the market to eliminate all tokens that do not meet this condition.
- How do cutting-edge technologies land on the blockchain? By engaging the private primary and secondary markets: innovation enterprises do not need tokens, only trading and flow channels; when the channels gain the legal capability for public promotion, innovative enterprises naturally complete on-chain transaction landing.
- What happens when cryptocurrency becomes traditional financial infrastructure? There will be no signature events; the underlying functionalities will become fully abstracted, and the public will no longer discuss this proposition separately.
Some of the inferences in this text are bound to contain deviations, as stated at the outset. The entire deductive framework has a core validation standard: if by the end of 2028 ordinary investors still have not participated in the compliant channels for private assets, and all funds continue to rely on offshore synthetic perpetual contracts and packaged products for circulation, then the core argument of this article — "the industry bottleneck lies in laws rather than technology" — collapses, and the entire deduction must significantly lower its credibility.
Just focus on this one core variable, and by 2029, verify the rest of the judgments completely. I prefer to present clear and falsifiable predictions rather than vague platitudes that will never be wrong.
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