10.6 AI Daily Ethereum is in a Crisis of Confidence, the encryption industry is seeking breakthroughs

1. Headlines

1. Ethereum ETF funds continue to flow out, and Vitalik Buterin faces an unprecedented trust crisis.

Ethereum is experiencing an unprecedented level of scrutiny. Since the launch of the ETF, there has been a net sell-off or outflow of over 1.2 billion USD. A massive trust crisis is emerging, affecting everyone from core Ethereum researchers and the Ethereum Foundation to developer community organizations, Consensys-related businesses, and external investors. Vitalik Buterin needs to better guide different stakeholders in terms of direction and goals because Ethereum has become a very large decentralized entity in the entire cryptocurrency market and even in traditional markets, with no such entity existing in history. The challenges faced by the entire Ethereum community and Vitalik will continue to intensify, reaching a point where something must be broken for something new to emerge.

The development of the Ethereum ecosystem is facing significant challenges. The ongoing capital outflow reflects investors' doubts about the future development of Ethereum. As the core development team and community leader, Vitalik Buterin needs to rebuild confidence and unify the expectations of different stakeholders. Ethereum has developed into a vast decentralized business network, its influence far exceeds the cryptocurrency space. Vitalik is facing not only technical challenges but also needs to engage in deep thinking and innovation across multiple levels, including governance, vision, and business models. This process will undoubtedly be filled with difficulties, but it is crucial for ensuring the long-term sustainable development of Ethereum.

2. The Ton ecosystem has become a hot topic of discussion at the TOKEN2049 conference, with a cautious attitude from the foundation.

The Ton ecosystem has become a hot topic of discussion at this conference, reflecting the industry's strong interest in this emerging ecosystem. Although Western funds currently have a cautious attitude towards the Ton ecosystem and Web2 platforms, they have not completely ruled out the possibility of investment. As a decentralized open-source network, the Ton ecosystem possesses unique technological advantages and innovative potential, making its future development worthy of close attention.

For investors, it is necessary to carefully assess multiple dimensions such as the technical strength of the Ton ecosystem, community activity, and application scenarios, rather than simply making decisions based on optimistic or pessimistic emotions. At the same time, the Ton ecosystem also faces numerous challenges that need to be addressed, such as regulation and ecosystem development. Regardless, the Ton ecosystem has become a hot topic at this conference, reflecting the industry's desire for emerging innovative forces, and will also drive more capital and talent into this field.

3. The cryptocurrency industry is in a downturn, and innovation is on shaky ground.

The cryptocurrency industry is currently in a period of low development. On one hand, some projects deceive exchanges and investors through fake data and income, exposing irregularities within the industry; on the other hand, discussions in the tech community are overly theoretical, neglecting the fundamental purpose of infrastructure development, which is to serve real applications and users. Exchanges have become winners due to good revenue models, but this has also exacerbated talent loss, making it difficult for startups to retain top talent.

This situation reflects that the cryptocurrency industry is facing multiple dilemmas such as lack of innovation, absence of users, and shortage of talent. If it cannot attract real users and new capital injections, the supporting power for innovation will gradually weaken. The industry urgently needs to reshape a healthy and orderly development environment, standardize market behavior, focus on practical application implementation, and provide sufficient resources and talent support for innovators. Only in this way can the cryptocurrency industry regain vitality and achieve sustainable development.

4. The cryptocurrency conference's pool party was unprecedented, as the industry seeks breakthroughs in its predicament.

Despite the cryptocurrency industry being in a slump, the attendance at major conferences has reached new highs, and the pool parties on-site have been unprecedentedly lively. This reflects the industry's internal desire to break through the current situation. Attendees are trying to attract more attention and discussion through activities like dress-up, DJ performances, and awards ceremonies, seeking opportunities to overcome the industry's challenges.

This phenomenon reflects the dilemma faced by the cryptocurrency industry. On one hand, the industry is indeed facing numerous challenges, such as a lack of innovation, user attrition, and regulatory pressure that need to be resolved urgently; on the other hand, there is still tremendous vitality and potential within the industry, and participants are eager to reignite the passion for the industry through various means. Therefore, the key to the future development of the industry lies in how to truly address practical issues, rather than remaining at the level of formalism. Only by effectively promoting innovation, valuing user experience, and improving regulatory policies can the industry regain vitality and achieve substantial development.

5. The underlying logic of the cryptocurrency industry has failed and urgently needs to reconstruct a new business model.

The underlying logic of the cryptocurrency industry is failing, and there is an urgent need to reconstruct new business models. There is a general awareness within the industry about the current predicament, but whether entrepreneurs and investors truly possess the "hard power" to drive the industry's transformation is still a question worth pondering. Compared to the past internet/payment industry, the development of the cryptocurrency industry resembles more of a "make-believe" game, lacking a solid commercial foundation.

Therefore, investors need to examine two key questions: first, what will the new industry logic be? Second, does their investment portfolio possess the strength needed to support the industry's transformation? Only by clarifying these two questions can the industry hope to give birth to new opportunities in the desperate trough. This process will undoubtedly be fraught with difficulties, requiring entrepreneurs and investors to work together to reshape the industry's business logic, build a sustainable development model, and ultimately revitalize the cryptocurrency industry.

2. Industry News

1. Bitcoin breaks the $125,000 barrier, setting a new historical high

The price of Bitcoin has surpassed the $125,000 mark, setting a new historical high once again. This increase is mainly driven by continuous buying from institutional investors and active trading of futures contracts. Data shows that the total value of open interest in Bitcoin futures contracts has exceeded $14 billion, reflecting increased market participation and leverage risk. Meanwhile, funds into Bitcoin ETFs continue to flow, having surpassed $60 billion in a favorable economic environment.

Analysts point out that the continuous rise in Bitcoin prices is primarily due to the large-scale purchases by institutional investors. As the cryptocurrency market matures and regulations gradually come into place, more and more institutional investors are beginning to include Bitcoin in their portfolios. Additionally, Bitcoin's attributes as a new type of asset for hedging are also favored.

However, some analysts also warn that the rapid rise in Bitcoin prices could bring significant volatility risks. Excessive speculative trading may trigger sharp price fluctuations. Investors need to remain cautious and manage their risk exposure.

2. Ethereum hits the $4500 mark, on-chain activity continues to rise.

The price of Ethereum broke through the $4500 mark on October 6, reaching a new high. This increase was mainly driven by the continuous rise in activity within the Ethereum ecosystem. Data shows that both the daily transaction volume and the number of active addresses on the Ethereum chain reached historical highs.

Analysts believe that the rise in Ethereum's price is mainly due to its strong ecosystem. Ethereum is not only an important component of cryptocurrency but also the infrastructure for blockchain applications. With the continuous development of applications such as DeFi and NFTs, the practicality of Ethereum is further highlighted, thus driving up demand and prices.

At the same time, the Ethereum EIP-1559 upgrade also added momentum to the price increase. This upgrade introduced a token burning mechanism, which helps to control inflation expectations and increases the scarcity of Ethereum.

However, some analysts also point out that the high transaction fees of Ethereum may limit its growth potential. If other public chains can offer lower fees and higher throughput, they may pose a certain impact on Ethereum.

3. The Solana ecosystem continues to heat up, with SOL price breaking through $230.

The Solana ecosystem continues to heat up, with the price of the SOL token breaking through $230, setting a new historical high. As a high-performance public chain, Solana attracts a large number of DeFi, NFT, and other applications with its advantages of low fees and high throughput.

Data shows that the total locked value and trading volume in the Solana ecosystem have significantly increased. At the same time, the Solana ecosystem foundation is continuously introducing new incentive measures to attract more developers and projects to settle in.

Analysts believe that the continuous warming of the Solana ecosystem mainly stems from its technological advantages. As a public chain that supports high concurrency, Solana can support the deployment of large-scale applications, which gives it enormous development potential in fields such as DeFi and NFTs.

However, some analysts have raised concerns about Solana's scalability and level of decentralization. If Solana fails to address these issues effectively, it may impact its long-term development.

4. USDC natively launched on the Sui chain, adding new strength to the stablecoin ecosystem.

The USDC stablecoin has officially launched natively on the Sui chain, marking an important step for the Sui ecosystem. As one of the largest stablecoins in the cryptocurrency space, the launch of USDC will bring more liquidity and use cases to the Sui ecosystem.

Analysts believe that the launch of USDC on the Sui chain will help promote the development of the Sui ecosystem. Stablecoins play an important role in areas such as DeFi, and the addition of USDC will bring more innovative applications to the Sui ecosystem.

At the same time, the launch of USDC also reflects the advantages of the Sui chain in terms of technology and security. As an emerging public chain, the Sui chain's ability to attract stablecoin projects like USDC indicates that it possesses a certain level of competitiveness.

However, some analysts have pointed out that the current application ecosystem of Sui is still relatively weak, and the launch of USDC is just the beginning. The Sui chain needs to continue attracting more high-quality projects to truly realize its potential.

The cryptocurrency market continues to rise, and investor sentiment is high.

On October 6th, the cryptocurrency market continued to rise, with major cryptocurrencies reaching new highs. Data shows that the total market value of cryptocurrencies has surpassed $4.3 trillion, and investor sentiment remains high.

Analysts believe that the continued bull run in the cryptocurrency market is mainly due to several factors: first, the continuous buying by institutional investors has injected new funds into the market; second, the ongoing development of the cryptocurrency application ecosystem has enhanced people's confidence in cryptocurrencies; in addition, inflation expectations and demand for safe-haven assets have also driven the demand for cryptocurrencies.

At the same time, analysts have warned that excessive speculation could pose significant risks. If investors blindly chase prices, they may suffer heavy losses when the market corrects. Therefore, investors need to remain rational and manage their risk exposure.

Overall, the continuous bull run of the cryptocurrency market reflects the increasing recognition of this emerging asset class. However, it is also necessary to be wary of the risks brought about by speculative trading and to maintain a cautiously optimistic attitude.

3. Project News

1. Gensyn Protocol: Building a Verifiable AI Super System

Gensyn is an open decentralized network designed to provide a secure, interoperable, and verifiable operating environment for autonomous agents. The protocol offers a unified identity, payment, and governance track by simultaneously incentivizing the supply and use of agent services.

Latest News: Harry Grieve, co-founder and CTO of Gensyn, delivered a keynote speech at the Silicon Valley 101 x RootData Annual Summit. He outlined the technical architecture of the Gensyn protocol, including a super-scale training framework supporting multi-agent reinforcement learning, an optimal AI verification system, a zero-shot assistance learning toolkit, and a user-friendly EVM L2 blockchain. Grieve pointed out that the current development of machine intelligence faces multiple challenges in technology, economy, ethics, and security. Gensyn aims to address these challenges by building a verification system that proves model performance, utilizing encryption to safeguard property rights, and avoiding regulation through open-source.

Market Impact: The Gensyn protocol lays the foundation for promoting the real commercial value realization and the long-term sustainable development of the network. It is expected to break the computing power monopoly, reduce AI computing costs by 30-70%, and ensure the transparency and fairness of data labeling through blockchain. This protocol will become the core infrastructure of the next generation machine economy.

Industry Feedback: RootData is the We data platform, and its annual selection aims to present the main participants in the We field that are influential and innovative. The Gensyn protocol has been selected for the 2025 "Top 100 Projects" list, highlighting its innovative position in the integration of AI and We. Industry insiders have given positive evaluations of Gensyn's potential in addressing the pain points of AI development and promoting the scaling of machine intelligence.

2. Orange DAO: AI + Blockchain Entrepreneurship Guide

Orion Parrott, the founding general partner of Orange DAO, delivered a keynote speech titled "AI + Blockchain Entrepreneurship Guide" at the Silicon Valley 101 x RootData Annual Summit, providing entrepreneurs with a clear action plan.

Latest update: Parrott pointed out that we are at a historic turning point where blockchain and AI technologies intersect, providing unprecedented opportunities for entrepreneurs. He outlined a methodology for early-stage entrepreneurs: to find broken and inefficient systems in reality as entry points, and to use "achieving more functionality with less code" as the golden standard for measuring platform adaptability. Parrott elaborated on the vision of Orange DAO, which is to build an open, decentralized network that allows autonomous agents to operate in an environment with interoperability and verifiability.

Market Impact: Orange DAO is building a token-driven economy, establishing a positive-sum relationship between users and developers. The project starts with Linea, expands to MetaMask, and will soon extend to the decentralized infrastructure projects of DIN(Infura and even more fields. Orange DAO is expected to accelerate the delivery of large projects and features, launching some new and impactful projects every few weeks.

Industry feedback: Orange DAO has been selected for the 2025 RootData "Top 100 Projects" list, reflecting its innovative position in the integration of AI and blockchain. Industry insiders have given positive evaluations of Orange DAO's potential in promoting AI and blockchain entrepreneurship and building a decentralized intelligent agent network.

) 3. AI101 Labs: On-chain Intelligent Reconstruction of Machine Economy Infrastructure

Elaine Yang, a General Partner at AI101 Labs, delivered a keynote speech titled "On-Chain Intelligence: AI Opportunities in the Tokenization Era" at the Silicon Valley 101 x RootData Annual Summit, systematically elaborating on the investment logic and cutting-edge trends in the field of AI and We integration.

Latest News: Elaine Yang pointed out that we are standing at a historic turning point between AI and We. She believes that on-chain intelligence will become the core infrastructure of the next-generation machine economy and shared the panoramic investment layout of AI101 Labs in this field. She focused on analyzing four key tracks: AI agent payments as the cornerstone of the machine economy, AI prediction markets represented by Polymarket that carry collective intelligence, decentralized AI computing that can break the monopoly of computing power and reduce costs by 30-70%, and decentralized data training that ensures transparency and fairness in data labeling through blockchain.

Market Impact: At the application layer, Elaine is optimistic about AI-driven We entertainment, next-generation AI browsers, and deep learning-driven on-chain transactions. She stated that the Donut browser she has invested in will become the first "proxy-based" cryptocurrency browser architecture revolution in over 30 years. The investment layout of AI101 Labs is expected to promote the integration of AI and We, reconstructing the infrastructure of the machine economy.

Industry feedback: AI101 Labs has been selected for the 2025 RootData "Top 50 VC" list, reflecting its influence in the field of AI and We integration investment. Industry insiders have given positive evaluations of AI101 Labs' foresight and insight in promoting on-chain intelligence and positioning itself in the AI and We integration track.

4. Economic Dynamics

1. The U.S. government shutdown has entered its second week, and long-term U.S. Treasury yields continue to rise.

Economic Background: The U.S. economy performed strongly in the first half of 2025, with a GDP growth rate of 3.2%. Inflation has also receded, but remains above the Federal Reserve's target of 2%. The unemployment rate stayed low at 3.5%, and the job market remained robust. However, the government encountered a shutdown on October 1, leading to delays in the release of key economic data, casting a shadow over policy-making.

Important Event: Due to the inability of Congress to reach an agreement on the budget proposal for fiscal year 2026, the U.S. government officially shut down on October 1. This marks the third government shutdown during the Trump administration. The shutdown has forced approximately 800,000 federal employees to take leave or work without pay, and several government departments have suspended operations.

Market reaction: As the government shutdown enters its second week, investor concerns about economic prospects are intensifying. Long-term Treasury yields are rising, reflecting expectations of future inflationary pressures. The 10-year Treasury yield rose 3 basis points to 4.152%, while the 30-year yield increased by 4.5 basis points to 4.759%. Analysts warn that if the shutdown continues, it will have a greater impact on the economy.

Expert Opinion: Analysts at Deutsche Bank pointed out in a report that the 10-year and 30-year government bond auctions held on Wednesday and Thursday will serve as a "good test of the market's demand for the current Federal Reserve and government policies." They believe that weak auction demand would highlight investors' pessimism about the economic outlook. ING analyst Francesco Pesole noted that while the dollar remains resilient, it faces downside risks, and the government shutdown issue could trigger a negative reaction for the dollar.

2. OCBC Bank raises gold price forecast, expects it to break the $4000 mark in 2026.

Economic Background: In the context of sluggish global economic recovery and ongoing geopolitical tensions, gold has become highly sought after as a traditional safe-haven asset. Since 2025, the spot gold price has continued to rise, currently hovering around the historical high of about $3900 per ounce. The demand for gold from investors has remained high, driving prices to continually set new records.

Important event: Heng Koon How, Head of Global Economics and Market Research at OCBC Bank, has raised the forecast for gold prices in the latest report. He stated that with the continued warming of global retail investment demand, there are no signs of a slowdown in gold's upward trend. Since the technical breakthrough of $3500 per ounce, gold has continued to rise over the past month.

Market Reaction: Investors' demand for gold continues to rise, pushing prices to repeatedly set new records. The spot gold price has surpassed $3900, reaching a historic high, and is expected to further touch $4000. Analysts believe that the global economic slowdown, rising fiscal pressure, and weak policies will continue to drive safe-haven demand, thereby supporting gold prices to maintain their upward trend.

Expert Opinion: Phillip Nova analyst Priyanka Sachdeva stated in a report that to stabilize gold prices above the $4000 per ounce mark, a "structural breakthrough" may be necessary. She pointed out that to "convincingly break through" $4000, new driving factors may need to emerge, such as a sharp global economic downturn, deeper geopolitical rifts, or a clear policy shift from the Federal Reserve. "As the market approaches historical highs, investors should be prepared for increased volatility."

3. Bitcoin hedging gains momentum amid rising $38T U.S. debt

Economic Background: The U.S. government debt has been steadily rising over the past few years, currently exceeding $38 trillion, which is over 120% of GDP. The inflation rate briefly exceeded 6% in early 2025, although it has since retreated, it still remains well above the Federal Reserve's 2% target. Under the dual pressures of debt and inflation, cryptocurrencies such as Bitcoin have gained attention as hedging tools.

Key Event: According to the latest forecast from the Congressional Budget Office, the U.S. fiscal deficit for fiscal year 2025 is expected to reach $1.8 trillion, further expanding government debt. Meanwhile, the U.S. government has entered a shutdown on October 1, exacerbating investor concerns about the economic outlook.

Market reaction: Under the dual pressure of debt and inflation, investors are increasingly favoring cryptocurrencies like Bitcoin as a hedging tool. The scarcity and decentralization characteristics of Bitcoin are seen as key advantages. According to industry data, the institutional demand for Bitcoin has continued to grow this year, with daily purchase volumes exceeding the output of miners.

Expert Opinion: Renowned investor Michael Saylor believes that Bitcoin is the "perfect hedge" against inflation and currency devaluation. He stated: "Against the backdrop of rising U.S. debt, the scarcity and immutability of Bitcoin will make it an ideal store of value." Goldman Sachs analysts also noted that institutional investors are incorporating Bitcoin into their portfolios to hedge against inflation and exchange rate risks. However, they simultaneously warn of the inherent volatility risks of Bitcoin.

5. Regulation & Policy

1. Julia Leung, the Chairperson of the Hong Kong Securities and Futures Commission, is expected to be reappointed.

Julia Leung is expected to receive another 3-year term as the Chief Executive Officer of the Hong Kong Securities and Futures Commission. During her previous term, she promoted the establishment of a regulatory framework for virtual assets, providing a legitimate pathway for cryptocurrency companies to operate. Her reappointment will bring continuity and stability to cryptocurrency regulation in Hong Kong.

Julia Leung introduced a licensing system for virtual asset trading platforms and released a virtual asset roadmap during her tenure, which is relatively friendly to the digital asset industry. She has stated that the future of digital assets is vibrant and promising, and also mentioned the adoption of the regulatory concept of "same business, same risks, same rules," which will bring crypto over-the-counter trading and custodial institutions under regulatory oversight.

Industry insiders generally believe that Julia Leung's reappointment will bring continuity to Hong Kong's cryptocurrency regulatory policies. Chan Sau-sin, chairman of the Hong Kong Fintech Association, stated that Julia Leung has established a clear roadmap for the regulation of virtual assets in Hong Kong during her tenure, and her reappointment will ensure the coherence of regulatory policies, which is beneficial for the long-term development of the industry.

2. The U.S. government shutdown may accelerate the Bitcoin regulatory process.

As the U.S. government shutdown enters its second week, the progress of regulatory agencies on cryptocurrency regulation may accelerate. The government shutdown means that the legislative process is stalled, but the executive branch can still formulate new rules and guidelines.

The Chairman of the U.S. Securities and Exchange Commission, Gary Gensler, has been calling for increased regulation of cryptocurrencies. During the government shutdown, the SEC may expedite the regulatory process for cryptocurrency exchanges, token offerings, and other activities.

In addition, the U.S. Treasury may also accelerate its regulatory efforts on stablecoins during this period. The Treasury has been studying how to regulate this emerging asset class to ensure financial stability and consumer protection.

People in the cryptocurrency industry are concerned about the potential new regulations that may be introduced during the government shutdown. Some believe that the new rules could be too strict, hindering the industry's development in the absence of sufficient debate and public participation. However, others argue that a clear regulatory framework would contribute to the long-term healthy development of the cryptocurrency industry.

3. The EU's regulatory framework for crypto assets, MICA, is approaching final approval.

EU regulators are accelerating the legislative process of the crypto assets market bill ( Markets in Crypto-assets, MICA ). The bill aims to establish a unified regulatory framework for the cryptocurrency industry, ensuring consumer protection and financial stability.

The MICA legislation was proposed by the European Commission in September 2020 and has now entered its final stage after nearly three years of debate and revision. The Council of the European Union, the European Parliament, and the European Commission are currently in trilateral talks regarding the final version. Once an agreement is reached, the legislation will come into effect in all EU member states.

The main contents of the MICA legislation include: establishing a unified licensing system for cryptocurrency issuers, exchanges, and wallet providers; regulating the issuance and circulation of stablecoins; strengthening anti-money laundering and consumer protection measures; and establishing a regulatory framework for decentralized finance (DeFi).

The bill has received widespread support from industry insiders. Martin Bruncko, the European head of the cryptocurrency exchange, stated that MICA will bring legal certainty to the cryptocurrency industry and help attract more institutional investors into this market.

However, some people hold a cautious attitude towards the MICA legislation. Some cryptocurrency enthusiasts are concerned that excessive regulation may stifle innovation and undermine the decentralized nature of cryptocurrencies.