KOL Dayu: Will there be another altcoin season?
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KOL Dayu: Will there be another altcoin season?
Innovation within the circle is exhausted; innovation outside the circle is achieving greatness.
Navigating Web3 tides with focused insightsAuthor: Dayu
CRCL surged to 300, trading volume broke through ten billion,可惜 I realized it a bit too late—but better late than never. I'd rather get locked up than miss the train; not boarding feels worse than a breakup—even if the dowry requires buying CRCL at 250, I’ve agreed.
In contrast, the crypto space has completely cooled down. The reasons are comprehensive and deep-rooted. To put it simply:
1. VCs have been rekt or did the rekt—they won’t come back
VCs either orchestrated or participated in projects with inflated valuations. As seen from comments on MOVE, Bearchain, Eigenlayer, etc., it's clear which were setups and which had VCs genuinely investing for idealistic reasons.
Those who set up the schemes already knew whom to dump on and how. After taking profits, they left while cursing others as "sbs"—yet ironically, they’re the clearest ones, understanding that apart from BTC, 99% of crypto is shit.
The idealistic VCs clearly believed this cycle BTC would hit $100K or $250K, and protocols like Eigenlayer would skyrocket alongside ETH breaking $10K or $20K—making multi-billion dollar valuations reasonable. But before their tokens even unlocked, the market froze.
These VCs won’t stay either—their LPs have lost 60–90%, funds are either dissolving or barely surviving until dissolution. From what I know, most first-tier crypto funds have nearly disbanded. The reason some still maintain minimal staff is merely to have “caretakers” receive tokens from projects that haven’t distributed yet.
If we interviewed many early-stage VCs and asked for a one-sentence takeaway, it might be: "I was an sb—I should’ve just bought BTC and called it a day."
2. Innovation within the circle has dried up
Past bull markets brought real innovations—ICO, DeFi, NFT—all left lasting impacts. This cycle, however, only delivered one crippled innovation: inscriptions. Sadly, nothing will remain because people now realize it wasn’t innovation at all.
Is there still innovation in crypto? It’s debatable. Internally, probably not. While we can't rule out the future entirely, the probability of groundbreaking innovation has dropped from 50% to 10%. Externally, however, great innovation is happening.
3. External innovation is thriving
Is CRCL innovative? Yes. It aims to disrupt Visa’s $60B market cap and capture the massive imagination around cross-border payments—its efficiency and cost are 100x superior to traditional systems. From this perspective, CRCL at 250 is expensive compared to 60, but if you believe it can reach 3000 and aren’t afraid of being stuck at 60 short-term, maybe it’s acceptable.
RWA is “innovative,” though likely useless—essentially just another attempt to issue tokens and farm韭菜.
Is compliance an “innovation”? Strictly speaking, calling it innovation is a stretch. But compliance is actually a bridge—the path for crypto to go mainstream.
We can foresee a few things:
Compliance is a major trend. Large-scale growth in crypto depends on large-scale compliance. Non-compliant exchanges, apps, including USDT, will increasingly face development constraints.
Under this compliance trend, the top projects in crypto may no longer issue tokens but instead pursue IPOs on U.S. stock exchanges—where the liquidity pool is vastly larger.
Bitcoin’s value and consensus were partly boosted by the innovation and prosperity of altcoins in previous cycles. Now that this aspect has died, I was initially worried—but then realized: our industry’s game must change!
In the future, Bitcoin’s consensus won’t spread via Web3 breaking into the mainstream—that’s now a false premise. Our current farming tactics can’t lure outsiders anymore. Instead, adoption will come through Web2 integration—via compliance. In the future, people will directly pay with compliant USDC when shopping on Amazon or Pinduoduo. They won’t need a U-card built on USDC—they’ll just have a wallet embedded in the app, supporting both BTC and USDC payments.
I don’t think BTC payments will succeed via garbage like Lightning Network. More likely, it'll be something like cbBTC—BTC tokenized and custodied by Coinbase or USDC official wallets on Base chain. Users convert BTC into cbBTC, making usage seamless. With Coinbase as custodian, users feel relatively secure—and ETFs are all custodied here anyway.
Of course, big-money holders might complain about non-self-custody, but minority opinions don’t matter. The hundreds of billions in ETF inflows are the real verdict.
***
From the above analysis, we gain a holistic view of the current state inside and outside crypto. I often say, “Go where the fish are.” Moving forward, whether investing or speculating in crypto, we should follow this mindset.
I’ve summarized several key questions to ask before any investment/speculation today:
1. Will off-circle capital care about this?
2. Is it easy to pump?
3. Does it have massive imagination potential?
Thus, I believe off-circle capital is currently concentrating on stablecoins and compliance—a direction worth serious consideration.
Few investable targets exist here.
If CRCL drops back to 60, countless people will rush in—so a short-term fall below that level is unlikely. If you don’t want to predict, just wait for the dip. Nothing rises forever. If FOMO hits, buy a small position first (even if caught), then DCA steadily down to 60.
Recently, I've spent significant time researching HashKey’s platform token HSK—FDV over $400M, though the company has likely burned more than that. HSK is both an exchange token and gas for the HashKey public chain, somewhat mimicking Coinbase + Base strategy.
Add in the compliance narrative and its role in OTC settlements during the stablecoin craze (OTC business likely already keeps the company alive), and once listed on a tier-one exchange like OKX, depth will suffice to fuel a speculative wave amid current market excitement.
The downside? Operations are reportedly terrible, internal infighting rampant—probably still hasn’t found the right people. Ideally, they’d hire someone who made big money in crypto, understands the space, has vision, works for free, and gets rewarded with sufficient future profits. But for short-term speculation, don’t waste energy “teaching them how to run the business.”
From a national pride standpoint, I truly hope an Eastern version of Coinbase emerges. Coinbase is valued at $100B; here, FDV is $400M. OSL, previously similar to HashKey, listed on Hong Kong exchange at $7B valuation—but with only 1/10th HashKey’s volume.
CRCL is investment; HSK is speculation—U.S. equities for investment, HSK for speculation works well.
Currently, HSK has relatively deeper liquidity on Gate, but still far from sufficient—similar to ORDI during the inscription era, only tradable on Gate initially, only comfortable after listing on Binance.
In the Meme sector, I avoid conspiracy schemes—they’re boring, just friend-farming. Traditional memes aren’t fun either.
Applying stock market logic, I believe only memes appealing to outsiders have a future.
Right now, only Labubu fits. Glad to see it remains relatively strong—if it collapses, it’s gone. Many overlook Labubu’s热度 without understanding Pop Mart’s popularity.
Sales for brands like Parado, Chanel, LV keep declining. Labubu has become the hottest topic among affluent women, stores placed right beside luxury boutiques.
Labubu is Pop Mart’s flagship. New movies and content are coming soon. Pop Mart isn’t just creating more IPs—they also aim to build century-long IPs.
Now Labubu is hotter overseas than in China, unboxing videos spreading organically on TikTok, far surpassing PEPE in热度.
Those unfamiliar with memes might ask: what does this have to do with your shitcoin? But if you understand PEPE, Labubu makes sense—both gained traction overseas first, then rose in China. That PEPE frog was just an internet meme—what did it have to do with crypto? Only that PEPE first stabilized at tens of millions market cap.
Among cultural phenomena understood by outsiders today, only Labubu sustains continuous spread—its热度 dwarfs Elon’s three-minute meme spikes.
Memes? If you bet, bet on longevity and high ceilings.
Current holdings: BTC, HYPE, HSK, Labubu—disclosure of interest. Do your own research before buying.
Stock portfolio: PDD, UNH, Coinbase, Tencent, plus a small speculative position added in CRCL.
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