The number of people trading cryptocurrencies has sharply decreased. Is the crypto market really at a dead end?

By the end of October 2024, the Federal Reserve’s rate cut of 25 basis points as scheduled, and the reduction of its balance sheet, have both been finalized. However, the market reaction was unexpected—cryptocurrencies did not rise as anticipated, instead experiencing slight fluctuations. In contrast, the US stock market saw a strong rally, with Nvidia’s market capitalization surpassing $5 trillion, setting a record, and the Shanghai Composite Index, after 10 years, returning to 4,000 points. This stark contrast vividly illustrates a harsh reality: fewer and fewer people are still trading cryptocurrencies.

Looking back at the current market situation, the most direct feeling is that the cryptocurrency sector is facing a structural crisis—this time different from the past, as it is caught in a double dilemma of internal and external difficulties. On one side, industry innovation is waning, narratives are weak; on the other, large capital is gradually taking over pricing power, and ordinary investors’ strategies and experience are failing. Meanwhile, the dazzling performance of other assets like gold and tech stocks further diverts retail investors’ attention, and the “wealth effect” that once supported the crypto market is no longer effective.

External Dilemmas: The Crypto Market is Being “Crushed” by Stronger Assets

The primary predicament faced by the crypto market is most evident when compared to traditional assets.

Gold’s gains far surpass BTC, raising doubts about crypto’s safe-haven properties

If we talk about the biggest winners of 2024, gold undoubtedly deserves the top spot—gaining over 50%. What about BTC during the same period? Only about 17% increase, almost three times less than gold. The Dow Jones Industrial Average, though with a slightly lower gain than BTC, hit a new record of 48,000 points; in contrast, BTC, which fell from a high of $125,000 to $111,000, performed noticeably worse.

This comparison reveals an awkward reality: during macro risk events or global geopolitical crises, BTC has not become a sought-after safe-haven asset. Instead, many investors see it as a high-risk asset within the US stock market—lacking momentum when rising, but very active when falling. BTC’s safe-haven attribute has been thoroughly discredited in this market cycle, dealing a substantial blow to the overall attractiveness of the crypto market.

Market capitalization disparity exposes liquidity issues

Compared to the nearly $70 trillion total market cap of US stocks, the entire cryptocurrency market remains at around $3–4 trillion, less than 10% of the US stock market. This gap is not just a simple numerical difference but reflects comprehensive disparities in liquidity, capital scale, and market depth.

To put it in a more tangible ratio—Nvidia’s projected five-quarter GPU sales of $500 billion already approaches the market cap of Ethereum at that time. In other words, a single year’s revenue from a tech company’s core business is almost equal to Ethereum’s ten-year market value. According to retail investor data, the Nasdaq’s trading volume in the first half of 2025 reached $6.6 trillion, making the liquidity of the crypto market seem insignificant by comparison.

Narrative disconnect: stagnation in crypto, rapid progress in AI

Insufficient liquidity is not the most critical issue. The deadliest problem is the complete breakdown of narratives.

Look at what’s happening in the tech sector—AI models like Claude Code, GPT-5, Deepseek V3.1, Qwen3 MAX emerge one after another, with ever-changing tech narratives continuously attracting investor attention. In contrast, most crypto “x” AI projects remain at whitepapers and conceptual stages, far less active than the same period last year. Market attention is fragmented among DAT, Meme coins, and other short-term hot spots, failing to form a lasting collective force.

Internal Symptoms: Liquidity Exhaustion and Chaos

“10·11 Major Crash”—the last drop of liquidity

The industry-wide crash on October 11, 2024, marked a turning point. The liquidation scale during this crash was at least $30–40 billion, equivalent to 1% of the total crypto market cap evaporating in a single day. On Coinglass alone, over 1.6 million traders were liquidated. Countless retail investors saw their accounts wiped out, permanently leaving the market.

This crash was not just a price fluctuation but a deep trauma to market liquidity. Since then, incremental capital has become extremely cautious about entering, further worsening liquidity. The already limited liquidity ecosystem of crypto has been hit hard again.

Fragmentation of hot spots: retail investors at a loss

Currently, hot spots in the crypto market rotate at an astonishing speed, with none lasting more than a week. A few days ago, everyone was chasing a Meme coin; two days later, another project pushed it out of sight. Market hot spots scatter like confetti, and retail investors cannot keep up.

The direct consequence is that—many have simply given up trading and shifted to saving and investing. Strategy and experience have become completely ineffective; only insiders with secret information can profit, while ordinary investors are unable to make gains through traditional methods.

“Insider Control”: Big Capital Dominates Everything

This is a more painful phenomenon—if you’re not in the “insider” circle, you’re just an “insider” cash machine.

After Trump took office, a series of policy statements became the main market drivers. From tariff and trade war rhetoric to US-China summit news, every “tough talk” from Trump caused market declines; then, with a turnaround, markets inexplicably rose. BTC, from breaking new highs to now oscillating wildly, owes much of its influence to insiders and their behind-the-scenes power.

Big capital has fully taken over the pricing power of mainstream coins, leaving retail traders to follow passively. When the market is dominated by “insider” information, the survival space for ordinary traders shrinks rapidly.

Market Transformation: From “Innovation” to “Wealth Management”

The crypto market is undergoing a fundamental transformation—from a testing ground for technology and innovation to a “savings box” style wealth management platform.

Previously, the nearly 10-fold rise of Circle upon listing, the boom in stablecoin issuance, and the lucrative returns from Plasma airdrops led retail investors to believe—only by holding top projects, waiting for airdrops, and engaging in wealth management can they achieve stable returns.

This shift is most visibly reflected in mega projects like MegaETH—when they conduct public sales, raising $1 billion (though the actual cap is only $50 million), with oversubscription of 20 times. Projects once symbolizing innovation and hope have now become “wealth management products” that are fiercely competed for. Even top plans like Stable, which open investment amounts, are crowded with “mouse wallets”—what does this indicate? It shows that even insiders see this as a quick way to cash out.

Reflection: Who Still Trades Crypto?

Returning to the initial question—how many people are still willing to trade?

The answer: fewer and fewer.

Many retail investors have exited, turning to more stable US stocks, Hong Kong stocks, and A-shares. They watch gold’s gains, Nvidia’s myth, and the booming tech stocks, abandoning their previous obsession with the crypto market. Those still remaining are either trapped “leeks” or waiting for airdrops as “wealth seekers.”

To break out of this dilemma, what is truly needed is a massive influx of capital, broader attention, and a revival of liquidity. But under the current circumstances, these are unlikely in the short term.

The only hope lies in projects with real value, years of entrepreneurial accumulation, and genuine application scenarios. If the future of crypto depends on breakthroughs from these projects rather than insider tips and wealth management cycles, there may still be hope. But for now, that day still feels very far away.