Author: Nikshep Translation: Shan Oppa, Golden Finance

For most of 2025, Token Dispatch will start every Monday column with a macro analysis of Bitcoin. We interpret currency prices, on-chain capital flows, ETF holdings data, miner dynamics, and the cycle stage of the entire crypto industry. At the time, this was a natural choice. Just like financial reviews always start with the market index, crypto media will always focus on Bitcoin as the core of their reports.

Until one Monday, we removed this regular column. Now, nearly nine months later, we have yet to publish a Bitcoin macro column. At first I didn’t think much about it, but looking back, this change just confirmed the rapid development of the entire industry.

In the early days of the development of the encryption industry, everyone only cared about one question: How is Bitcoin going? In the past, this was excusable. But now, the crypto industry is no longer dependent on Bitcoin’s price curve and ETF capital movements. When talking about the crypto field now, what I see is that people are building a more complete financial system, operating stable businesses relying on new and old infrastructure, or building a new generation of financial technology to reshape capital flow and transaction models.

Many great industries have gone through similar development paths. Smartphones are no longer simply judged based on their call functions, and the Internet has also shed its original single attribute. The encryption industry is also undergoing such growth and transformation.

Recently, Token Dispatch continues to focus on the integration trend of encryption and financial technology. For this reason, we publish this guest review at the right time. Author Nick Shep points out: The crypto industry no longer needs Bitcoin. He breaks down the two core positions that Bitcoin has lost this year and explains why this is good for the entire industry. Nick Shepp is deeply involved in the artificial intelligence and encryption fields, and has experience in both investment and project construction. He has worked at Kalshi Exchange and Coinbase.

Artificial intelligence has taken away its status as a market risk target, and the US dollar has replaced it as the universal currency of the crypto world. Today, Bitcoin is no longer the core player in maintaining multi-chain ecology and condensing fragmented industries. This is the most positive change the encryption industry has seen in years, but most people fail to see the logic behind it.

This week, the price of Bitcoin fell below US$70,000, down approximately 45% from its high in October last year. The market was full of negative voices: ETF funds experienced record outflows, and the longest redemption cycle since the fund was launched. The "digital gold" of the past is no longer in glory, but the price of traditional gold has soared 89%, breaking through the $5,000 mark in one fell swoop.

People’s regrets are actually looking in the wrong direction.

Just as the price of Bitcoin continues to fall, a little-known on-chain exchange has surpassed Coinbase in transaction volume last year; the valuation of a prediction platform has climbed to US$20 billion, with annualized fee income reaching US$365 million; a privacy currency that was once criticized by the market has surged within a week of Bitcoin going sideways. 70%; there is also a public chain that has been underestimated for a long time, which realizes cross-chain private transfers. Users can transfer assets anonymously between any public chains without purchasing their native tokens.

The encryption industry did not go into a downturn with Bitcoin, but completely got rid of its dependence on Bitcoin.

This sentence may seem negative, but it is actually the opposite. The crypto industry is maturing: it is no longer a speculative casino dominated by a single currency - where all token movements were just leveraged adjuncts to Bitcoin. Nowadays, a real economy based on US dollars has been formed here. The rise and fall of the project is determined by its own fundamentals. A new set of underlying interconnection system has replaced Bitcoin and become the link of the entire ecosystem.

This year, Bitcoin has completely lost its two core functions. Here’s a look at who has taken over these roles and what new opportunities are emerging in the space left behind by Bitcoin.

1. Function 1: Venture investment target, replaced by artificial intelligence

Bitcoin itself has no cash flow, income, dividends and interest, and its price depends almost entirely on the scale of market risk funds and investors' risk preferences. It is like a reservoir of funds: when market liquidity is loose, prices rise, and when liquidity tightens, prices fall under pressure. In 2026, the artificial intelligence track will completely divert the risk funds that originally poured into Bitcoin.

Global investment in artificial intelligence infrastructure will reach US$700 billion to US$830 billion this year, accounting for about half of the entire US investment-grade bond market; this number is expected to climb to US$7 trillion by 2030. The artificial intelligence industry accounts for approximately 5% of U.S. GDP, and its recent contribution to U.S. economic growth has even exceeded household consumption. Nvidia alone accounts for about 8% of the S&P 500's market capitalization. Artificial intelligence is no longer an ordinary industry track, but has formed a strong capital gravitational field, reshaping the capital cost of the entire market.

It squeezes the living space of Bitcoin from three major dimensions:

The first is the right to speak narratively. The biggest story logic of Bitcoin is "betting on asymmetric opportunities in the future", and artificial intelligence provides a more attractive version: with real revenue support, market demand exceeding supply, and support from various governments, investors can deploy through existing index products. Today, institutional investors classify Bitcoin as a high-risk technology asset, and the correlation between its movements and loss-making stocks has reached an all-time high of 97%. When two types of assets belong to the same risk sector and one of them begins to generate actual returns, funds will inevitably turn. This is also the core reason why Bitcoin ETFs continue to experience redemptions.

The second is market capital. The expansion of the field of artificial intelligence increasingly relies on debt financing: the scale of debt issuance by large technology companies has exceeded that of the whole of last year, and private credit funds flowing to artificial intelligence exceeded 200 billion US dollars. Top borrowers issue massive bonds and absorb market funds from top to bottom. By the time the capital flow reaches the high-risk speculation area where Bitcoin is located, there is not much left.

Finally, there is the monetary policy environment. The artificial intelligence industry has pushed up real inflation: the cost of electricity and water resources has increased by about 5%, and the price of memory chips has increased by double digits. Affected by this, U.S. inflation remains near 3.8%, the Federal Reserve maintains a hawkish stance, and the benchmark interest rate remains at 3.50%–3.75%. The market does not expect an interest rate cut this year. Artificial intelligence not only competes with Bitcoin at the financial level, but also creates a high interest rate environment, which directly cuts off the liquidity flowing to Bitcoin, creating a double suppression.

The competition between the two major tracks also extends to the field of physical resources. Bitcoin mining and artificial intelligence computing power businesses are essentially the same: they both consume electricity in exchange for computing power, and both parties compete for the same power resources. However, the unit income of artificial intelligence computing power is much higher than that of Bitcoin mining machines. Last quarter, the cost for mainstream listed mining companies to mine one Bitcoin was about US$80,000. At that time, the market price of Bitcoin was only US$70,000, and they lost US$19,000 for each coin mined. As a result, miners have transformed into the artificial intelligence track: currently, the industry has signed over 70 billion US dollars in artificial intelligence/high-performance computing cooperation agreements, and listed mining companies expect that the proportion of artificial intelligence business revenue will reach as high as 70% by the end of the year.

Core technology company Cosirion finalized a $10.2 billion cooperation to transform a 300-megawatt Bitcoin mine into an artificial intelligence data center; Lebit rented space to AMD and sold its Bitcoins to acquire land. These institutions, which were originally responsible for maintaining the security of the Bitcoin network, are now selling off their reserve assets to complete business transformation.

This is not a short-term market fluctuation, but a structural change. Let’s compare it to the quantum computing threat that everyone is worried about: a quantum computer with enough computing power may crack the Bitcoin encryption algorithm as soon as 2029. This is certainly scary, but quantum computing attacks the underlying technology, and the industry has a response plan: the post-quantum encryption standard has been finalized, and the soft fork migration plan has been planned, leaving several years of buffer time. Risks can be mitigated by patching encryption protocols.

But artificial intelligence impacts the core foundation of Bitcoin that cannot be repaired: investment logic, market funds, and power resources. When a better track takes away stories, funds and energy, no technical upgrade of Bitcoin can reverse the situation. Its first core function has completely disappeared.

2. Function 2: Cryptoworld reserve currency, replaced by the US dollar

This point is often ignored by the market, but it is the core of the entire change.

For most of the development of the crypto industry, Bitcoin has been the absolute reserve asset, access to funds, and trading benchmark. Legal currency is first converted into Bitcoin, and then converted into other currencies through Bitcoin. All tokens are priced in Bitcoin, and external funds must first flow to Bitcoin when entering the market. This is also the fundamental reason why all altcoins have followed Bitcoin in the past.

The emergence of stablecoins has completely severed this connection. Since 2019, the trading volume of USDC has surpassed Tether for the first time; the total annual trading volume of global stablecoins has exceeded US$30 trillion. Nowadays, the user's deposit and withdrawal path has changed to: legal currency → USDC → various assets, and Bitcoin has completely withdrawn from the mainstream circulation link.

This spring, the prediction platform Polymarket upgraded its trading system and launched its own US dollar stable currency Polymarket USD, which is fully reserved by USDC at a ratio of 1:1; the Hyperliquid platform also fully adopts US dollar settlement. As one analyst said, the U.S. dollar has become the underlying common currency in the crypto world and the reserve collateral behind all applications. Various platforms only superimpose their own brand logos on the U.S. dollar base.

Now that market risk appetite is declining, data shows that Bitcoin’s market capitalization ratio continues to decline, while the proportion of stablecoins continues to rise. Rather than funds flowing out of the crypto industry, funds are moving within the industry into U.S. dollar assets. To participate in the crypto market, you no longer need to hold Bitcoin. This function is now taken over by the US dollar. Bitcoin’s second core function also ceases to exist.

After breaking away from Bitcoin, booming physical projects

Throw aside Bitcoin and look at the products that users are actually using today. They are no longer just speculative tokens waiting for Bitcoin to rise, but real projects with complete business models.

Hyperliquid is the most powerful example, enough to break the argument that "the encryption industry is in decline". This on-chain exchange has in-depth market openings and extremely fast transaction experience comparable to those of leading platforms, and it also supports users to independently manage assets. Its trading volume last year was about $2.6 trillion, far exceeding Coinbase’s $1.4 trillion, and annualized revenue reached $800 million to $1.3 billion. The platform spends 97% of its handling fees on repurchasing native tokens in the secondary market. The cumulative repurchase amount has reached US$1.3 billion. The annual repurchase scale accounts for approximately 7% of its total market value, which is 4 to 5 times the destruction rate of Ethereum and 14 times that of Solana. The project did not receive venture capital investment. The tokens were initially issued in the form of community airdrops, and all repurchase funds came from platform transaction revenue. Its demand is completely driven by real traders, and the trend is completely decoupled from Bitcoin. Even if Bitcoin falls, the platform's trading volume can still grow steadily.

Another representative is Polymark, with a project valuation of US$20 billion, annual transaction volume of US$250 billion to US$300 billion, annualized fee income of approximately US$365 million, daily active users of 150,000, and a 1.5-fold increase in user size within five months. The platform issues its own USD stablecoin, and native tokens will also be launched soon. The platform focuses on predicting elections, sports events, and international events, and its business needs have nothing to do with the price of Bitcoin.

Nowadays, the valuation logic of this type of projects is consistent with that of traditional companies: pricing based on revenue, user scale, and valuation multiples. This is a sign that the market is maturing.

New track outlet: privacy field, two development paths

If Bitcoin’s open, transparent, and traceable ledger was the standard feature of the old era, privacy attributes have become the core competitiveness of today. Anonymous assets on the chain mean that users have funds that are under their own control and cannot be traced. At present, the privacy track has divided into two completely different development routes, and the differences between the two also define the future direction of the industry.

Self-held privacy assets: Zcoin (ZEC)

Zcash is a typical representative. The currency has risen by 70% in a week, with the total market value approaching US$10 billion, an increase of more than 45 times from the low in 2024. This round of rise is completely independent of the Bitcoin market, and it went out of an independent market during the sideways trading period of Bitcoin.

Behind the rise are solid fundamentals, not mere speculation: the current share of Zcoin’s anonymous transfers has risen from 11% a year ago to 30%, and tokens that have been transferred to anonymous status will basically not be transferred back to the public status, and rising demand has further reduced the circulation. Regulatory pressure that was originally regarded as negative for privacy coins has now become a driving force for development: Robinhood, a mainstream brokerage, launched the currency, and Grayscale also submitted its first privacy coin spot ETF application. Privacy assets have been upgraded from a single application scenario to the core investment logic of the industry.

However, Zcoin is still an independent token, and users need to purchase it separately and switch to its exclusive public chain for transfer. The other model has a more far-reaching influence.

Universal privacy service: NEAR

Users do not need to purchase privacy tokens or migrate assets. This is the model created by the NEAR public chain, and it is also the most underestimated innovation in this round of industry changes.

Relying on chain signature technology, a single NEAR account can directly initiate native transactions on mainstream public chains such as Bitcoin, Ethereum, and Solana, using the native assets of each chain without the need for cross-chain bridges and token packaging. The entire system is guaranteed by a decentralized multi-party secure computing network. After adding the private transaction instruction function, users can transfer assets anonymously between any public chains. The counterparty and transfer path are completely hidden, and all operations are completed within the privacy shard. User assets are still retained in the original public chain, with only a layer of general privacy services superimposed.

The pattern of this model goes far beyond a single privacy currency. Users do not need to purchase Zcash, nor do they need to leave the Ethereum, Solana or even Bitcoin network. Privacy is no longer an exclusive attribute of a certain type of token, but a universal capability across all transactions.

A new link in multi-chain ecology, Bitcoin is no longer dominant

Looking at the entire industry landscape: the encryption ecosystem is not moving toward concentration, but continues to expand and become increasingly fragmented. The number of public chains continues to increase, and all ecosystems use the U.S. dollar as the underlying settlement currency. At the same time, artificial intelligence agents have begun to enter the market. They can independently manage identity credentials, call interfaces, transfer funds, and become new market participants.

The huge multi-chain ecosystem and intelligent entities urgently need an interconnected underlying system. In the past ten years, this role has been played by Bitcoin, with all funds and businesses using it as a transit. Now this position is vacant, and the successor is not another type of value storage asset, but a collaboration + privacy comprehensive underlying network: supporting full-chain signatures, dollar settlement, anonymous transactions, and adapting to human-machine collaborative operations.

NEAR is working hard to build this underlying system. Currently, its network supports agents to complete anonymous transfers through USDC, relies on a hardware trusted execution environment to perform confidential operations (the data is completely isolated and cannot be viewed by the project itself), and the signature network has been upgraded to a key management service for the agent ecosystem. This system provides general privacy capabilities and cross-chain control permissions for individual users and agents without forcing users to migrate to a single public chain or hold specific tokens.

Under the same change, the representative project for ordinary users is Venice. This is a privacy-focused, uncensored artificial intelligence application that has accumulated a large number of traditional Internet users. The platform builds a token economic system: users pledge VVV tokens to share the benefits of artificial intelligence computing power; lock the tokens to mint DIEM tokens, which represent permanent daily computing power quotas. The platform has burned more than 40% of its native tokens through revenue buybacks. The demand for tokens depends entirely on the scale of artificial intelligence users and has nothing to do with the price of Bitcoin. Token trends and product growth also clearly confirm the decoupling trend between the two.

The new focus of the industry has taken shape: it is no longer a certain token, but an underlying network and the physical projects that rely on it to create real value.

Redefining industry logic

After combing through the entire logical chain, the answer is clear: the US dollar has become the common currency in the entire industry; various protocol tokens (HYPE, POLY, ZEC, NEAR, VVV) are equivalent to the industry’s “equity assets”; the underlying network of collaboration and privacy has become the infrastructure that connects the entire ecosystem. Bitcoin is just an ordinary node in the ecosystem.

This “digital gold” has now fallen out of favor: macro risk trading has been taken over by artificial intelligence, the positioning of safe-haven assets has been replaced by traditional gold, and the function of the industry’s reserve currency has been taken over by the US dollar.

In the past ten years, everyone in the crypto industry has only cared about the trend of Bitcoin because all assets have followed its fluctuations. This era has ended. Nowadays, when judging a project, the criteria are the same as those in traditional business: does it have stable revenue and active users, and can the token capture the real value created by the project?

Summary

If you want to judge the true prosperity of the encryption industry, stop focusing on Bitcoin. It is no longer an industry benchmark.

What is really worthy of attention is project revenue, user volume, and the public chain networks that have gradually become the bottom channel of the industry - they realize full-chain private transfers and US dollar settlement, and serve both human users and artificial intelligence agents.

This year, Bitcoin has lost two core functions: the macro risk target has been replaced by artificial intelligence, and the universal currency function has been taken over by the US dollar. The new underlying system that connects the entire crypto ecosystem is gradually being built outside of the influence of Bitcoin.

Bitcoin falling below $70,000 is not the end of the crypto industry.

This is just a sign: the crypto industry no longer needs Bitcoin.