Reigniting the Crypto Bull Market: Searching for the Next ChatGPT Moment
TechFlow Selected TechFlow Selected
Reigniting the Crypto Bull Market: Searching for the Next ChatGPT Moment
What is the ChatGPT moment for cryptocurrency? Or will there even be such a moment?
Navigating Web3 tides with focused insightsAuthor: Tascha
Translation: TechFlow
How can cryptocurrency enter a new bull market? What does it take for the crypto market to see another bull run? Many people discuss this question, but the real answer is rarely mentioned.
When faced with the "when will the bull market come?" question, the most common answer crypto investors hear is, "Once the Fed starts printing money again…"
Come on! If central bank monetary expansion were so crucial for price increases, then how do you explain the Nasdaq rising 10% on its own in May, while the Fed's balance sheet continues to shrink?
In fact, the market isn't lacking liquidity. Even after 15 months of balance sheet reduction, the Fed’s asset holdings are still 80% higher than pre-pandemic levels. Since last summer, financial conditions have barely tightened at all.
That's precisely why risk assets haven’t seen any meaningful sell-off since then—it simply hasn’t been a harsh environment! Ample liquidity sits comfortably on the sidelines, just waiting for a good reason to re-enter the market.
Then along came a little thing called ChatGPT.
95% of price movements in markets are random walks—pure noise. Prices move without reason because today is no different from yesterday.
But occasionally, an unexpected event—good or bad—jolts the market awake, forcing it to realize that the old price tag on an underlying asset no longer reflects fundamentals.
This is how large directional price moves happen—they’re triggered by unforeseen, unpriced events. Look at history: nine out of ten bull markets start exactly this way.
Take U.S. equities as an example. Of course, AI has existed for a long time. The market knew what it was. But its potential seemed decades away from realization.
The sudden rise of a consumer-facing application called ChatGPT made the market realize that the AI future is much closer and far bigger than previously expected.
Overnight, investor sentiment shifted—from complaining about interest rate policy to excitement over AI-driven visions of 10x productivity (and profit) growth. The entire industry’s outlook and total addressable market changed.
Strong earnings from AI-dependent companies like $NVDA and $MRVL confirmed the price trend, convincing more and more investors that the rally had fundamental backing.
Eventually, expectations around AI will vastly exceed the pace at which companies can deliver tangible progress. Prices will correct—either orderly or violently. But that’s a problem for later.
So what does all this have to do with cryptocurrency? The answer is: everything.
As the stock market has shown, macro conditions are no longer a barrier to price increases. But as noted earlier, prices need a reason to rise—a genuine catalyst stemming from a compelling event.
The real question is: What is crypto’s ChatGPT moment? Or will there even be one?
If the last bull market feels like a distant memory and you don’t remember anything, let me quickly refresh your understanding of Web3’s potential—
We invented something called public blockchains—open-access, decentralized transaction networks that anyone can build on.
This is an exciting invention because, first, these are borderless networks. Any asset on a public blockchain gains global liquidity from day one. Conversely, people anywhere in the world can access these global assets.
Financial access and capital allocation efficiency leap forward qualitatively.
Second, these networks are programmable and composable, meaning applications can be built faster and cheaper, accelerating the pace of innovation.
Third, tokenization allows Web3 projects to adopt cooperative business models, enabling contributors and users to benefit more directly from project growth and distribute value more fairly.
Ultimately, combining public blockchains with tokenization unlocks revolutionary potential for many types of business innovation.
The surging popularity of DeFi and NFTs—when they were still novel—provided “preliminary evidence” of this potential and drove the 2021 bull market. You could say these were essentially mini ChatGPT moments for crypto.
But as previously stated, for prices to keep rising, we need a “reason”—ongoing surprising events that tell investors the asset remains mispriced.
Crypto hasn’t had such an event in a while. Honestly, I haven’t seen one.
Most emerging projects grabbing attention represent only marginal improvements over past developments. A better staking method—so what? A multi-chain wallet with improved UX—don’t we already have five of those? Another meme coin with innovative tokenomics…
I see a lot of “innovation” in this space, but none that meaningfully expands use cases or drives adoption of public blockchains—the very things this industry truly needs.
Take recent restaking projects like EigenLayer. Now, EL is a great project (full disclosure, I’m an investor), and there’s no doubt it improves capital efficiency in staking.
But is it something that will set the world on fire and permanently change the fate of Web3? No.
Yet, before EigenLayer has even launched on mainnet, founders (more than one) have pitched me projects that involve restaking within restaking—to “further boost” yields on restaked tokens!
Maybe I’m being too harsh here, but I genuinely struggle to understand why people think such ideas represent the best use of their entrepreneurial talent.
You might argue that Web3 innovation is constrained by unfriendly regulations toward crypto. But are regulations ever friendly toward innovation? Not really.
Uber and Airbnb constantly battled regulations during their growth phases.
But because their innovations created new jobs and tax revenue, improved user lives, and increased productivity across entire industries, they gained broad support and strong arguments. As a result, they largely won their battles against outdated regulations.
Can crypto say the same? I’m not sure—certainly not with the current direction of innovation.
Will crypto die? No. We’ve long passed the point of questioning whether it will survive. In fact, bottom-fishing demand for blue-chip assets is extremely strong, and recent negative news may attract a wave of bargain hunters.
But for an industry that recently had over 300 million users globally, isn’t surviving a pretty low bar? The important question is: what does crypto need to fulfill its promised potential?
To me, it requires making public blockchains usefully serve the broader economy—not just chasing niche innovations dreamed up by so-called crypto natives. When and how this will happen remains to be seen.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
Tascha
