Original author: Luke

Original compilation: Saoirse, Foresight News

You are standing on the eve of the biggest change in the history of cryptocurrency. If you want to continue to delve into this industry, you must pay close attention to everything that is happening now.

At present, there are three core problems in the entire industry:

• What exactly determines the value of a token?
• How to implement various cutting-edge technologies into the blockchain ecosystem?
• What will happen to the market when cryptocurrency ceases to be an independent asset and becomes the underlying infrastructure of traditional finance?

I can analyze these three issues one by one from a purely theoretical level. Countless people do this every day, but empty theories can never lead to a conclusion. Therefore, I plan to change the approach: sort out the real changes that will occur in the industry from now to 2029 in stages. The specific subjects, data and time nodes are marked in the article. The content is concrete enough. Three years later, everyone can go back and verify whether my judgment is accurate. This is just one of many future possibilities, and some inferences are bound to be wrong. But vague and empty future predictions cannot be falsified, and unfalsifiable opinions are worthless. I would rather give a clear but possibly wrong judgment than say vague empty words that will never be overturned.

The perspective of this prediction comes from my work scenario: I have been deeply involved in the intersection of crypto startups, industry regulation and venture capital for a long time, and have in-depth communication with alternative asset managers and fund allocators every week. This does not mean that my judgment is necessarily correct, but my deduction fully considers various constraints in reality.

Mid-2026: High-quality targets are no longer various tokens

As of mid-2026, before the market has yet to uniformly define token value standards, the non-publicly issued enterprise perpetual contract market has reached the product market convergence point.

This transformation begins with the Hyperliquid platform. SpaceX's non-publicly issued perpetual contract, which was launched on the platform, was criticized in the early days for malicious liquidation and market manipulation by Ventuals. Later, it became the price reference target with the highest attention in the primary and secondary markets. By July, major banks and hedge funds will refer to this contract to price the private equity assets they hold. Trading software for ordinary users such as Robinhood also uses it to predict the opening price of companies after they go public. Every few weeks before a large company goes public, the price of this perpetual contract will accurately match the final opening price. The accuracy makes the investment bank underwriting team responsible for pricing seven-digit service fees lose face. OpenAI and Anthropic’s perpetual contract positions have reached new highs. Over a period of time, this native crypto exchange has become the world’s most reliable channel for obtaining real-time valuations of leading unlisted companies.

At the same time, a basic question arises in the minds of ordinary traders: Why can other currencies on the chain continue to trade? The altcoin market has continued to be bearish for 18 consecutive months, and the project founding team and investment institutions have continued to leave the market through large-scale split transactions and time-sharing algorithmic selling; on the other hand, $HYPE is the only token that has established a complete value capture closed loop, and its growth has crushed all targets in the market. The industry has launched more than ten token value capture mechanisms, but most of them have failed to form a positive cycle. The root cause is that the projects to which these mechanisms are attached have no asset value. Instead, the industry first solved the technical problem of how tokens capture value, and then looked for physical assets worthy of carrying value.

This kind of putting the cart before the horse is the driving force behind the boom in non-public issuance of perpetual contracts. What the market really craves is never the perpetual contract product itself, but high-quality assets; and in mid-2026, the only high-quality assets that can be traded on the chain are synthetic income certificates of entity companies that have nothing to do with the encryption industry.

End of 2026: AI track does not require cryptocurrency

Anthropic and OpenAI have achieved technological breakthroughs, competition on the basic large-model track has become fierce, and the market has begun to price general artificial intelligence (AI) in advance. The ensuing chain reaction is: all non-head basic large-model enterprises have continued outflows of related business funds. Capital is beginning to view general-purpose AI as a core asset held on corporate balance sheets, rather than as a standardized tool that can be used throughout the industry.

In such an environment, the "AI + encryption" track is quietly declining. It’s not that this logic has been falsified, but that the industry has no time to argue. The x402 payment protocol is officially launched, but there are no paying users; the on-chain agent economy envisioned by the industry has never been able to achieve large-scale implementation. All existing agents are settled in US dollars through APIs, which is no different from the traditional model of the traditional software industry. Practitioners in the venture capital circle have reached a consensus: the AI ​​industry itself does not need cryptocurrency as a support, and investors no longer forcefully advocate this track.

Currently, the only "AI + encryption" product that truly achieves product-market fit is the prediction market. The scale of prediction transactions around the performance of major basic large models has grown rapidly. It has also become the most accurate financial tool, used to bet on the core variables that can affect massive amounts of money - which company will have the best performing large model in the next month.

Aside from the hustle and bustle of the trading market, another low-key change is taking place: When the CLARITY Act was passed by the Senate in mid-2026, the vast majority of traders believed that the bill was irrelevant, and the market did not see a rise in prices; but by the end of the year, various asset tokenization projects accelerated. Large-scale asset management institutions have moved from the pilot phase to full-scale operations, keeping a low profile and making no publicity throughout the process - the core job of the compliance department is to avoid creating hype for the project. Tokenization targets are concentrated in the prosaic intermediate categories of balance sheets such as money market funds and private credit. These assets are not as popular as KOLs on social platforms, and there is no market K-line for speculation.

At the end of 2026, the encryption industry was divided into two independent economies that have almost no contact with each other: one is noisy and lively, making profits by betting on the AI ​​track market; the other is silent and low-key, and is gradually being absorbed by the traditional financial system through compliance documents. Most practitioners are focused on the former market.

Early 2027: Major public chain foundations clarify development routes

Universal public chains can no longer have both sides and blur their positioning.

For many years, major mainstream foundations have always told the public two completely separate narratives: publicly preaching the vision of large-scale implementation for ordinary users, and privately promoting supporting services adapted to institutions when negotiating with institutions. The two narratives have never intersected. By early 2027, the contradiction between the two development routes had completely emerged.

The track for retail investors is highly concentrated, with the only retail products that have real user needs, and the trading volume is all concentrated on a few trading platforms; while the institutional business is the only track that can bring stable paying customers. Major foundations have successively finalized their core development directions, and their choices are highly unified: building a corporate sales team, supporting compliance services, launching a network-wide universal compliance development toolkit for tokenized asset transfers and brokerage license applications, expanding Wall Street cooperation channels, and improving private transaction functions.

The media and encrypted social platforms interpret every strategic shift as a trade-off: giving priority to service institutions, abandoning ordinary retail investors, choosing serious financial customers, and abandoning speculative casino attributes.

However, practitioners within the foundation did not agree with this interpretation. Instead, the team stepped up its efforts to develop encryption services for ordinary users, and just changed the implementation logic. Over the years, the threshold for qualifying investors has been continuously relaxed, and the number of qualified investors has continued to expand. The underlying infrastructure of the organization built by the foundation will be open to ordinary users who are not currently classified as "qualified investors" in a short period of time. The infrastructure team is well aware of this, but they will not announce it publicly. The compliance infrastructure team only talks about bank customers to the outside world, because banks are the current payers.

The low-key institutional market formed at the end of 2026 will usher in an unprecedented increase: a massive number of ordinary compliant investors in the future. The two major economies that were previously separated have finally established a connecting bridge through the "Qualified Investor Qualification Verification".

Mid-to-end of 2027: Triple development ceiling

The new generation of technology and innovation companies has made the private equity market hot again: artificial intelligence biofusion, physical artificial intelligence, and humanoid robot track financing are all oversubscribed, and corporate valuations have soared, but they are still several years away from listing. The perpetual contract platform launched corresponding underlyings in just a few weeks, and the open interest in synthetic contracts of these companies with meager revenue set new records one after another. The market rules of 2026 are happening again, and the amount of funds is larger: the world's most sought-after high-quality assets are all concentrated in the primary private equity market, and the only corresponding target that users can trade on the chain is a synthetic perpetual contract with a funding rate that is settled every 8 hours.

However, the three types of markets have each hit their development ceiling, constraining industry growth:

Ceiling of Non-Public Issuance of Perpetual Contracts: Real private equity assets are growing steadily according to traditional private equity channels, and the scale continues to expand with compound interest every quarter. It has no presence on crypto social platforms that only look at skyrocketing market prices. The growth rate of perpetual contracts is much lower than that of real private equity assets. The core restriction is that private equity securities are not allowed to solicit investors publicly. The traffic model that the encryption industry is best at - posting market prices to attract retail investors cannot be applied to this type of assets at a legal level. At the same time, there are structural shortcomings in perpetual contracts: events approaching listing are needed as price drivers, and they can only cover late-stage mature companies; mid-term start-ups such as bioartificial intelligence and humanoid robots that are far away from exit channels cannot launch corresponding synthetic contracts. For the vast majority of primary market targets, real shareholding channels protected by regulation are not the second best option, but the only compliant and feasible trading tool, but publicity is not allowed by law.

Stablecoin Ceiling: The total stablecoin circulation continues to rise steadily and has never stopped expanding. However, major institutions have quietly scaled back their expansion plans. The midterm elections have changed the power structure of congressional committees. The list of candidates for the 2028 presidential election has gradually been determined. Many popular candidates have publicly opposed the issuance of private dollar tokens. Although the relevant provisions of the bills implemented in 2025 and 2026 have not been repealed, the implementation power of the bills belongs to the new government. When the financial directors of major banks formulate their ten-year settlement plans, they must include the risk scenario of the next government's tightening regulatory attitude. The industry will not completely stop the stablecoin project, but will only lengthen the implementation cycle and reduce the scale of the pilot. Everyone is waiting to see the results of the November 2028 election. The circulation velocity of US dollars on the chain is completely bound to the uncertainty at the policy level, and policy uncertainty will be at a high level in mid-2027.

Asset Tokenization Ceiling: This conservative sentiment spreads throughout the institutional crypto market. Tokenized private credit and fund share products continued to be launched, and all of them were compliant and implemented. However, the agency deliberately controlled the size of the project, and no one wanted to become a negative case at the Senate hearing the following year.

The commonalities of the three types of tracks are very clear: the logic of the product itself is established and the market demand is fully verified, but external policy forces outside the industry strictly limit the development speed. Regardless of the cryptocurrency's own market standards of skyrocketing rise and fall, 2027 is actually a year of steady growth for the industry. However, the encryption industry has been accustomed to it for ten years, and only a straight-line rise in the market is considered successful.

2028: Compliance access no longer scarce

(Since then, the forecast accuracy has declined: the previous forecast was refined to quarters, and after 2028, it was only deduced by year, and the range of forecast errors has expanded accordingly. This article makes clear a core assumption: the Democratic candidate will win the general election in November 2028. If the election results are opposite, the timing of various events in the industry will shift, but the overall development framework will not change.)

The speculative casino nature of the crypto market is gradually fading away, and almost no one can accurately define the turning point. The market capital harvesting mechanism is too efficient. Each round of new liquidity from 2026 to 2027 will be less than the previous round, and funds will be withdrawn by a few leading players faster. There has been no landmark crash in the market, and meme currency speculation will still occur intermittently, with one-day prices skyrocketing. However, after a certain point in the first half of 2028, speculative trading will no longer be the core focus of the industry, and transaction volume will only exist as statistical data, no longer dominating the industry's ecological culture. Some traders turned to the prediction market that took over the hype; some stayed in the speculative sector, which continued to shrink; and a large number of traders spent the past year completing something that no one expected in 2026 - applying for accreditation of qualified investors.

Policy-level panic gradually digested with market pricing throughout the year. The popular candidates of the two major political parties both accept industry donations, but the wording of their statements is different, and their core position is the same: the encryption industry needs regulation, not a complete ban. Practitioners who previously used the previous loosening of regulations as a harvesting window have been investigated one after another. The industry is slowly realizing that regulatory cleanup is actually a good sign: the government distinguishes between speculative harvesting business and financial infrastructure, so that infrastructure can receive capital investment with confidence. The financial executives of major banks who had scaled back the pilot program in 2027 quietly resumed their expansion plans before the election; when the election results came into effect, most of the policy risk premiums had already been digested.

The most profound lesson for the industry in 2028 comes from the trading market that everyone is closely watching: on the leading trading platform at the beginning of the year, a large position that was enough to move the market was liquidated in multiple popular non-publicly issued perpetual contracts. The chain liquidation risk that the market has been worried about since the Ventuals manipulation incident broke out in full force. Billions of open positions were cleared within a few hours, and the system automatically forced positions to be reduced. The losses were shared by the market, and the profits of the profitable parties were significantly reduced. Afterwards, all parties were unable to determine whether the fluctuation was due to malicious manipulation or a pure market accident. This ambiguity itself is the core conclusion: there is no fair benchmark price in a market that lacks underlying spot anchoring. Even "market manipulation" cannot be defined, let alone evidence. Perpetual contracts of listed companies have spot price constraints, but non-publicly issued perpetual contracts have no underlying anchor. There are indeed compliant trading channels for real private equity shares, but large-scale public diversion and extensive pricing are not allowed. The price of each perpetual contract is only an independent estimate by the platform, leaving huge room for human intervention. This chain liquidation is not the failure of the synthetic contract market itself, but the inevitable result of the operation of the market mechanism without the support of underlying real assets.

For the past decade, the ban on public solicitation of private securities has been packaged as an investor protection policy. But this market crash proves that this rule only blocks ordinary investors from legally protected trading channels, and instead allows everyone to flood into the highly leveraged, non-price-anchored synthetic contract market. The real dividing line is never between synthetic assets and real assets, but whether transaction rights are legally enforceable.

After the storm, new regulatory regulations were introduced, which are not so much reforms as they are improving the underlying financial mechanism: the regulatory authorities issued guidelines to allow public promotion of secondary market transfers of private equity securities (only second-hand shares, excluding the first round of corporate financing) for qualified investors who have completed qualification verification. Over the years, the group of qualified investors has continued to expand. The logic behind it is very straightforward: the synthetic contract market needs an underlying price anchor, and the lowest-cost solution is to open up public circulation channels for real private equity assets. A 90-year-old publicity restriction regulation has been significantly broadened just to improve the derivatives market.

The popularity of the new regulation in the first week after it was implemented was comparable to that of the new meme currency. The only difference is that the transaction target is the equity of an entity. It is the first time in the history of this asset category that the listing, screenshot dissemination and social promotion of private equity second-hand shares are all legalized. Opinions on social platforms are polarized: half of the practitioners regard them as a new basic financial tool, while the other half are worried that retail investors will become the exit takers of venture capital institutions. The latter's intuition is correct, but the judgment lags behind the times: when the assets were just air tokens without physical support, this concern was valid; but now the trading target is the income rights of the real enterprises that the perpetual contract market has proven in the past two years that the whole market is hungry for.

Funds are the first to pour into late-stage mature companies whose popularity has already been verified by perpetual contracts; and since there are no funding rates for real shareholdings and no listing time constraints, funds further flow to mid-term start-ups that cannot be covered by perpetual contracts. Perpetual contracts have not died out. They have transformed into a supplementary sector for later corporate transactions and no longer occupy all the core market traffic.

In December, the industry ushered in a new round of bull market, supported by the oldest basic target in the financial industry, but now it has finally obtained legal circulation channels.

2029: The market becomes the only core line of the industry

In the first year of this bull market, the trend is completely different from previous crypto bull markets, and this difference is where the core value lies. The targets for the continued rise in market prices are all scientific and technological enterprises that have implemented physical businesses and can effectively create social value. A new basic asset class for ordinary users to trade is private equity: biotechnology companies that have completed multiple rounds of clinical trials, humanoid robot manufacturers that everyone has seen live demonstrations, and artificial intelligence laboratories that everyone has traded perpetual contracts in 2026. Now users can directly hold real shares of the company.

After ten years of stepwise relaxation of the threshold for qualified investors, a new group of retail investors has been cultivated. Assets that only institutions could participate in five years ago can now be traded by ordinary qualified investors, and the vast majority of people will not even classify such transactions as "cryptocurrency investment."

The token track has been completely differentiated along the core issues raised at the beginning of the article: it has successfully transformed into a public chain that is issued in a new market and settles the underlying infrastructure, capturing real business flows, and platform tokens are equivalent to business cash flow income certificates. All remaining tokens will face extremely realistic market rules: tokens that lack legally enforceable income rights and do not have a complete value capture closed loop will not continue to decline for 18 months like in 2026, but will directly lose trading liquidity completely. The token value capture mechanism that is being debated throughout the industry in 2026 does not have a certain solution that wins; the circulation of private equity assets directly makes this debate meaningless.

Stablecoins continue the development pattern throughout the cycle: maintaining steady compound interest growth and no explosive rise. By the end of 2029, the total circulation will roughly double compared with mid-2027, with an average annual stable growth rate of about 20%. The upper limit of growth rate is not a lack of market demand, but a policy choice reached by the two parties: moderate development of private dollar tokens to meet practical needs while avoiding competition with the sovereign currency system. The US dollar circulation speed on the chain is bound to policy certainty, and the policy environment in 2029 will be stable and sustainable in the long term.

The speculative sector still exists, shrinking to fixed segments, with occasional short-term speculation, but the overall influence is only equivalent to one segment of the entertainment industry. Speculative traders are diverted to the prediction market and the new private equity secondary market. There is also a way out that no one predicts in 2026: applying for qualified investor qualifications.

The third core question raised at the beginning of this article - how cryptocurrencies can transform into traditional financial infrastructure - was finally answered in a silent way: this question will completely lose the meaning of discussion. The clearing and settlement function relies on customized payment channels, public chains, or a mixture of the two. Only the operations team can sort out the underlying architecture details. Ordinary participants neither understand nor care, just like ordinary people will not delve into the clearing institutions behind securities companies. The industry integration that will be gradually launched at the end of 2026 will finally be implemented with "complete invisibility". The ultimate victory for financial infrastructure is to become insipid and unnoticed. What remains in the public eye is the core product that the encryption industry has been building after rounds of speculation cycles - the asset trading market.

So far, all three core questions have been answered through this set of deduction logic:

• What determines the value of a token? The eternal core: having a legally enforceable claim on real assets, and today the market eliminates all tokens that do not meet this condition.
• How does cutting-edge technology implement blockchain? Relying on the private equity primary and secondary markets to complete the implementation: science and technology enterprises themselves do not need tokens, they only need transaction circulation channels; when the channels obtain legal publicity rights, cutting-edge enterprises will naturally complete the implementation of on-chain transactions.
• What will happen when cryptocurrencies become traditional financial infrastructure? There will be no landmark events, the underlying functions will be completely abstracted, and the public will never discuss this proposition alone again.

Some of the inferences in the article must be biased, which has been explained at the beginning. The whole set of deduction logic has a core verification standard: If by the end of 2028, ordinary investors still have no legal channels to participate in private equity assets, and all funds still rely on the circulation of offshore synthetic perpetual contracts and packaged products, then the core argument of this article that "the industry bottleneck lies in the law rather than technology" is not valid, and the credibility of the entire deduction needs to be significantly lowered.

You only need to keep a close eye on this core variable and fully verify the rest of the judgments by 2029. I would rather give a clear, falsifiable prediction than say vague empty words that will never go wrong.