I recently watched a podcast interview with Dragonfly, where guest Haseeb shared in-depth observations on the current cryptocurrency market, and some of his viewpoints are quite interesting.

He pointed out a very key phenomenon: retail investors have basically exited the market. Since October last year, retail activity on exchanges has dropped to just a small fraction of the frenzy in 2020, with search volume, app downloads, and other indicators measuring retail attention all declining. Currently, the market is actually supported by institutional investors. Take Bitcoin ETFs, for example—although the overall market has fallen by 7%, the amount of funds withdrawn from ETFs is minimal, indicating that institutions are still holding their ground.

So where have retail investors gone? They’ve shifted to assets like gold, AI stocks, and oil, which are currently more volatile. This actually reflects a very real issue: cryptocurrencies are now lacking appeal and are no longer the most exciting investment. Retail investors originally flocked to high volatility; if crypto becomes a low-volatility asset, it loses its attractiveness to them.

Interestingly, Haseeb believes that the narrative demand for Bitcoin has been overstated. His view is that people don’t need a special story—just believing that Bitcoin will always exist is enough. As the baby boomer generation gradually exits decision-making roles, and Generation X and Millennials take over, they will naturally regard Bitcoin as part of their financial assets. Over the next 15 to 20 years, Bitcoin will gradually solidify its position and become an asset that is understood and accepted.

Regarding the risk of quantum computing, his analogy is quite vivid. Quantum threats are like the Y2K bug—an actual problem that exists—but as long as the community prepares for migration in advance, when quantum computers actually arrive, the crisis will have already been mitigated. By then, people will look back at this period and find it hard to understand why there was so much worry.

The situation with altcoins is different. Retail investors care more about narratives for altcoins because, apart from projects like Hyperliquid that generate real income, most cryptocurrencies are based on expectations of future trading pairs. So you have to tell retail investors a credible story about why these projects matter.

What’s most interesting is his outlook on AI agents. He believes that cryptocurrencies are not fundamentally designed for humans but for AI agents. The current crypto experience is terrible—12-word private keys, tokens with 15 decimal places, incomprehensible smart contracts—these are nightmares for humans. But for machines, they are perfect. AI won’t leak keys, can analyze smart contracts instantly, and can react a hundred times faster than humans during hacks.

Once AI agents become sufficiently mature, the public’s perception of the risks of cryptocurrencies will be completely rewritten. The new wave of entrants isn’t here to gamble—they’re here for passive investing and savings. They will buy stablecoins and tokenized real-world assets. When this wave of people enters the market on a large scale, the crypto ecosystem will truly explode.

This logic is actually quite clear: retail investors need volatility to come back, but institutional capital alone is insufficient to push the entire market to new highs. For cryptocurrencies to truly take off, it still depends on the combination of AI and mass participation.