Creators Speak | Is a New Round of Crypto Bull Market Coming?

"Creators Speak" is a dialogue column launched by Foresight News, where we ask outstanding creators selected each month about hot topics in the market and compile the collected results into articles, gathering diverse opinions to explore deeper insights.

Written by: Outstanding Content Creators of Foresight News, August 2026

Compiled by: Foresight News

Since August, the U.S. Treasury has expanded expectations for liquidity release through bond buybacks, coupled with accelerated cryptocurrency regulatory policies in Washington. Bitcoin has rebounded significantly by about 25% from its mid-year low, briefly reaching $81,000. The inflow of ETF funds and the liquidation of short positions have further amplified the upward momentum, and the voices of a "bull return" are rapidly rising. Optimists are envisioning a new bull market, while cautious observers still believe it is merely a strong rebound. Is a new round of crypto bull market really on the horizon?

This issue of "Creators Speak" focuses on the "bull return". We invited Mario from IOSG Ventures, New Fire Research Institute, Zeuspace's Yao Kun, JamesX, and Stablehunter, all of whom are on the August 2026 list of outstanding creators from Foresight News, and we also specially invited Joe Zhou, the deputy editor of Foresight News, to join this discussion.

We posed five questions: "Is the bull market coming?", "How do macro policies constrain the market?", "What drives narrative changes?", "How should assets be allocated?", and "What are the potential risks?" Here are the answers we collected.

1. The market has been widely discussing the "bull return", but there are also many voices in the community suggesting it is just a strong rebound and a short squeeze, and we cannot directly declare the arrival of a bull market. How do you view the current stage of the market? What real signals would lead you to determine that a bull market is truly confirmed?

IOSG Ventures Mario: First, let's acknowledge that the rebound is real. Many altcoins have indeed risen from historical lows—ether.fi's TVL was still at $2.85 billion in June and returned to $4.26 billion in August; ARB's market cap was just over $500 million in mid-August. At that position, any marginal improvement can be amplified into a 40% increase over two weeks. BTC rose nearly 30% in August, reaching $80,000. The Robinhood line, combined with the shift in macro sentiment, ignited this wave.

However, I prefer to define it as a recovery after a deep pullback rather than the starting point of a new bull market. The reason is simple: BTC dominance is still at 59%, and the Altcoin Season Index is still below 50; money is still hiding in BTC and hasn't spread out. The funds are rotating, not entering.

To truly recognize a bull market, I need to see three things:

First is sustainability. It's not about a two-week 40% rise; it's about a sustained increase in highs over three to six months, with buying support at each pullback. A short squeeze will only give you the first segment.

Second is the opening of new capital inflows. After the spot ETF, what will be the next channel to bring in new money? Brokerage channels, the two-way channel of stock tokenization, or corporate balance sheets? If we can't find it, it will still be a game of existing funds.

Third, and most crucial, is the emergence of a leading character. Every bull market has a clear leading narrative: 2017 was ICOs, 2020-21 was DeFi Summer plus NFTs, and 2023-24 is spot ETFs plus memes and Solana. Up to today, there hasn't been a widely recognized leading character in this round.

The two candidates with the highest voices right now are one, on-chain exchanges—Perp DEX alone had a trading volume of $18 trillion in the second quarter, capturing a considerable portion of the futures market; the other is stock tokenization and brokerage chains—Nasdaq's tokenized stock rules were passed in March, and the SEC proposed Regulation Crypto Assets in August, with Robinhood launching its own chain. Whoever can truly bring in new users from outside the circle will be the leading character of this round.

Without a leading character, it’s just a beautiful short squeeze.

New Fire Research Institute: We assess the current stage as the transition from the end of the bear market to the beginning of a bull market, with the trend not yet fully confirmed by spot buying. There are two early characteristics: the market can quickly extend, and after high-level consolidation, it does not effectively break down. The approximately 25% increase in August and the consolidation after reaching $80,000, falling back to around $77,000, both fit this pattern. In the short term, we must separate the short squeeze from the trend; this segment's rapid rise from low levels is largely due to short positions being forced to cover, which is fast-paced. A short squeeze can create speed, but only spot can confirm direction. Next, we need to see if there is sustained, real buying from ETFs and institutional allocations in the spot market; in August, the spot Bitcoin ETF recorded about $3.5 billion in net inflows, but by early September, there were already daily outflows of several hundred million dollars. Whether the buying can take over is the test of the phase switch. Looking at the previous high of about $126,000, $77,000 is still relatively low, and there is still significant upward space. We interpret this price level as an improvement in asset quality, with regulation, institutionalization, and infrastructure being more complete than in the previous round, and the price has not yet fully accounted for these improvements.

The New Fire Research Institute team has been continuously indicating since mid-May that the market has entered a "high cost-performance range" and reiterated twice when Bitcoin was around $60,000 on July 6 and July 13; the accumulation by on-chain whales and the expansion of OTC transactions, combined with this round's short squeeze, point to the market shifting from panic selling to long-term chip collection. In the short term, we need to observe whether spot demand can take over the short squeeze; in the medium term, we look at whether reallocation, regulatory dividends, and RWA fundraising will happen simultaneously. If these three things resonate, this segment will upgrade from a short squeeze to the starting point of a new cycle.

BlockSec: I am relatively cautious about defining "the return of the bull market" right now. This recent round of increases is indeed strong, but there are also obvious short squeeze factors involved. On August 20, during the rapid rise in the market, the scale of short liquidations in the crypto market reached about $2.7 billion within 24 hours. On the other hand, there has also been a noticeable net inflow of funds into the U.S. spot Bitcoin ETF.

So my judgment is that this round of market activity cannot simply be understood as a short squeeze, but the rapid price increase alone is still insufficient to confirm a new long-term bull market.

I prefer to look at three levels of signals. The first is price, the second is funds, and the third is usage.

Price is the first to react; on the funds side, we need to see if ETF and institutional funds are continuously entering, not just a few days of inflows; but I believe the most important is the third level: whether crypto has generated more real usage. For example, whether stablecoin payments are growing steadily, whether on-chain transactions and financial activities are expanding, and whether traditional financial institutions are genuinely incorporating digital assets into their business systems.

From the clients and partners BlockSec has interacted with, we indeed feel that more and more institutions are starting to seriously address the issues of digital assets entering actual business. If this demand continues, I believe it is more indicative of the market entering a new stage than any specific price point.

So if I had to define "bull market confirmation", my standard might not be how much BTC breaks through, but whether there are funds and real businesses left after the price rises.

Zeuspace Yao Kun: I believe the current cryptocurrency market is more accurately positioned as being in the confirmation phase of transitioning from the late stage of this bear market to a new rising cycle, and we cannot simply define it as a "bull return", but we also cannot interpret this round of increases merely as a short squeeze.

First, this round of market activity indeed initially has very obvious short covering characteristics. The market had previously experienced a long period of decline and low volatility, resulting in crowded short positions. Therefore, once macro expectations and market sentiment change, concentrated liquidations can easily occur, driving prices up rapidly.

However, secondly, this round of increases does not entirely rely on leverage and short squeezes. After the rapid rise induced by shorts, the prices of most mainstream coins did not quickly lose momentum, and there has been sustained inflow of ETF and spot funds. Besides BTC, mainstream assets like ETH and SOL have also begun to attract capital attention. This indicates that there is a certain degree of real allocation demand in the market, distinguishing it from a purely technical rebound driven by derivatives.

However, it is still premature to declare the arrival of a new bull market. A true bull market requires seeing broader capital expansion, including sustained growth in stablecoin scales, effective breakthroughs and stabilization of mainstream coin prices, a rebound in market trading activity, and funds spreading from BTC to ETH and other mainstream assets, as well as a gradually favorable macro liquidity environment. Currently, these conditions are only partially improved and have not formed a comprehensive positive feedback loop.

Therefore, I prefer to define the current market as the "early reversal and trend confirmation phase". The most important thing next is not whether the price can continue to rise rapidly, but whether ETF and spot funds will continue to support during the first significant pullback, and whether BTC can hold key support and break through previous important trapped areas. If these conditions can be met, then this round of market activity is more likely to evolve from a strong rebound into a truly new bull market.

JamesX: Personally, I hope we are currently in the early stage of a bull market, but the market is constantly changing, and we still need to rely on some external factors to continuously update our judgments. For example, the U.S. 10-year Treasury yield has risen to 4.79%, and the Japanese 10-year Treasury yield has also reached 3%, hitting a new high since 1996.

Polymarket's trading data shows that the probability of the Federal Reserve raising interest rates by 25 basis points in September has risen to about 59%, while the probability of maintaining rates has dropped to about 40.5%. Meanwhile, market expectations for the midterm elections are also changing, with the probability of the Republican Party losing control of the House reaching about 89% and the Senate about 51%.

These changes collectively point to rising funding costs and declining market risk appetite. Higher U.S. Treasury yields increase the opportunity cost of holding Bitcoin, while expectations of interest rate hikes in Japan may trigger the unwinding of yen arbitrage funds. If the Republican Party loses control of Congress, the Trump administration's ability to promote crypto-friendly policies will also be limited.

Therefore, even if Bitcoin is still in a bull market cycle, there may be significant fluctuations and deleveraging in the short term, and price rebounds are likely to be suppressed. Only when bond yields peak, interest rate hike expectations cool down, or market funds flow back in, will Bitcoin be more likely to resume a sustained upward trend.

Stablehunter: I believe that the so-called "bull return" now is more of an illusion; at least the current market is still too "tranquil," and the new cycle has not been truly confirmed.

A round of price increases may come from short covering, leveraged liquidations, and short-term liquidity improvements, but these are not enough to prove that a bull market has arrived. A real bull market should see more sustained spot funding, broader market diffusion, and synchronized improvements in fundamentals such as on-chain users, stablecoin scale, and protocol revenue.

Before these signals appear, I would interpret the current market as a rebound and repricing, rather than the formal beginning of a new bull market.

Joe Zhou: I have always believed that the power of the four-year cycle cannot be ignored, and I also think that the behavioral patterns of on-chain players have continuity. If we consider October 6 (when BTC was priced at $126,000) as the peak of the last cycle, then by symmetrical time calculation, the bottom window is likely to fall between the end of this year and the beginning of next year.

2. The current crypto market is increasingly tied to external macro environments, with interest rate changes, U.S. stock fluctuations, and overseas regulatory policies directly disturbing the market. In your view, what constraints do external variables like macro and regulation impose on this round of "bull return"? Is there a possibility that a reversal in the macro environment could directly interrupt this round of market movement? If it really happens, what adjustments would you make to respond?

IOSG Ventures Mario: Macro-wise, the most special aspect of this round of rebound is that it has occurred without any interest rate cuts.

At the meeting on September 15 and 16, the market assigned a probability of over 60% for a 25bp rate hike and a zero probability for a rate cut. The probability of "no rate cuts throughout 2026" on Kalshi has risen to 40%. The mainstream expectation on Wall Street is to remain steady throughout the year.

So this wave of increase is not due to liquidity, but rather positions—shorts being squeezed, along with a few industry-level catalysts. This determines that its ceiling is not high and also makes it appear weaker than it seems.

Of course, there is a possibility that a macro reversal could interrupt the market, and the triggering path is quite specific: inflation data exceeding expectations → rate hike landing → U.S. stock pullback → Crypto's Beta amplifying. As of today, the correlation between Crypto and the Nasdaq is evident; it cannot be said to be an independent market.

Our response is not to guess the macro environment but to set the "resilience level" of our portfolio in advance—specifically how to layer it, which will be discussed in question 4.

Regarding regulation, my view may differ from many others: Compliance is not a hindrance in this round; it is the ticket to enter, but the cost is that this industry can no longer be so Degen (referring to gambler-style speculation, barbaric disorder, and high-risk betting).

The "CLARITY Act" is stuck in the Senate, with over 600 pages of text merged on July 22. Thune (John Thune, the Senate Majority Leader and Republican Senator, and the core operator of the "CLARITY Act" in the Senate) also admitted that there are not enough votes, and September is a more realistic window. The SEC's Regulation Crypto Assets proposed on August 18 is the heaviest digital asset regulation in this session. Once these things are implemented, the benefits are direct: brokers, pension funds, and public companies finally have a compliant path. The downsides are also direct: the freedom of product design will be significantly narrowed.

The impact on entrepreneurs is tangible. In the past, an anonymous team could launch a Fair Launch (referring to the industry's barbaric period, where an anonymous team could write a contract and launch it with almost no compliance barriers) in three months, but now, if your design involves "returns," "shares," or "buybacks," you must first consider whether it counts as a Digital Commodity or an Investment Contract under the framework of the "CLARITY Act"; those doing tokenized stocks must also face the SEC's market structure rules head-on. The space for innovation is shifting from "freely experimenting at the protocol level" to "optimizing efficiency within a compliance framework."

So now when we look at projects, we ask one more question: Does this design still hold under next year's regulatory framework? For many yield-generating products that are performing well today, the answer is uncertain.

New Fire Research Institute: Macro and regulation are the main constraints on the short-term market rhythm in this round, but they do not change the long-term direction. The total scale of U.S. Treasury bonds has surpassed $40 trillion, and the high proportion of short-term bonds makes government finances highly sensitive to interest rates; policy-wise, it is close to market consensus that the "CLARITY Act" is unlikely to complete legislation within this year, with the Senate procedural vote window falling around mid-September; at the end of August, the Fed's hawkish stance combined with the Middle East situation pushing up oil prices has cooled the market after breaking the $80, and the interest rate game has caused the coin price to face short-term technical pullbacks, with the core still being to test the buying support during the pullbacks.

A reversal in the macro environment could directly interrupt this round's rhythm, especially if policy signals like Waller maintain a strong hawkish stance, combined with uncertainties from geopolitical conflicts and rising local protectionism. If a strong hawkish interest rate policy emerges, it would cool the market in the short term and seek liquidity to form a secondary bottom; however, short-term disturbances only change the slope and cannot reverse the long-term underlying trend of crypto assets. If this risk materializes, the response strategy is to compress high-risk leverage while anchoring observation points to the resilience of spot support and long-term chip accumulation, firmly executing a phased low-buying strategy during deep corrections.

BlockSec: The macro environment certainly has the potential to interrupt the market. Today, Crypto is very closely linked to global liquidity, interest rates, and traditional financial markets, so I would not underestimate the risks brought by a macro reversal.

But I want to share a very direct feeling we have recently.

This year, BlockSec was invited to participate in the Virtual Asset Technical Exchange (VATE 2026) held in San Antonio, USA. This was a closed-door exchange, attended by international law enforcement agencies such as Europol, the UK NCA, Germany's BKA, and Japan's NPA, as well as digital asset industry participants like JPMorgan Chase, Fidelity, FINRA, Coinbase, Binance, OKX, Kraken, and Circle.

For us, the most interesting thing is not a specific regulatory policy, but that these participants, who were originally in different systems, are now sitting at the same table discussing digital assets.

This makes us more confident in one judgment: Regulation and compliance are gradually transforming from external constraints on Crypto to the infrastructure of this market itself. The SEC has continued to advance the regulatory framework for crypto assets this year, including the proposed Regulation Crypto Assets in August; Hong Kong's stablecoin issuer regulatory system has also entered the implementation stage. These systems will certainly increase some compliance costs, but on the other hand, they are also reducing the uncertainties faced by institutions entering this market.

So I think there is a very important change: For institutions, the most terrifying thing is not necessarily strict regulation, but not knowing what the rules are.

If the macro environment reverses, the coin price may indeed adjust significantly, but BlockSec will not change its long-term direction because VATE gave us a deep feeling that regardless of how the next round of the market goes, law enforcement agencies, regulatory agencies, financial institutions, and Crypto companies have already begun to build long-term digital asset capabilities. This process will not stop because BTC drops by 20%.

Zeuspace Yao Kun: This round of "bull return" demonstrates the close connection between crypto assets and the global liquidity system. Therefore, the macro environment can both catalyze and completely interrupt the market. First, the biggest constraint remains the global liquidity and interest rate environment. The rise in August was largely related to the temporary decline in U.S. long-term interest rates and the expansion of long-term bond repurchases by the Treasury, as well as the re-entry of ETF funds. However, this environment is not stable. Rising oil prices and geopolitical risks are pushing inflation pressures back up, with the yield on the U.S. 10-year Treasury bond returning to around 4.8%. Fed officials have also clearly stated that if inflation cannot continue to decline, further rate hikes cannot be ruled out. Therefore, this round of market movement is actually unfolding in an environment where "liquidity has not truly been fully eased," which is also why I have been reluctant to prematurely confirm a full bull market.

It is also important to distinguish between two types of interest rate increases. If the rise in interest rates comes from concerns about U.S. fiscal and debt sustainability, and the market is trading on the decline of fiat currency credit, then BTC may benefit alongside gold; but if the rise in interest rates comes from a resurgence of inflation, forcing the Fed to tighten further, while the dollar strengthens and U.S. stocks decline, then it would be a very clear negative impact on crypto assets. The former is a "currency depreciation trade," while the latter is a "liquidity contraction trade," and the impacts on BTC are completely different.

Second, the regulatory environment is currently generally favorable, but this benefit should not be overestimated. The SEC has significantly changed its approach to regulating crypto assets this year, further clarifying the boundaries of securities law in March, and proposing Regulation Crypto Assets in August, hoping to establish a clearer issuance and safe harbor system. This is very important for institutional funds entering the market, as it reduces long-term regulatory uncertainties. However, many of these systems are still in the proposal and legislative advancement stage and have not been fully implemented. Therefore, regulatory improvements are more about reducing the long-term risk premium of crypto assets rather than being able to offset the headwinds of macro liquidity. Once policy advancements fall short of expectations, the most affected will not be BTC first, but often ETH, SOL, and other higher Beta altcoins.

Therefore, the macro environment certainly has the potential to directly interrupt this round of market movement. One transmission chain that I am particularly wary of is: rising energy prices or a resurgence of inflation → the Fed tightening further → real interest rates and the dollar rising → U.S. stock risk appetite declining → ETF funds shifting from inflow to continuous outflow → the crypto market deleveraging again. If this chain appears in full, then the so-called "bull return" could completely regress into a strong rebound within a bear market.

Our response is not to make subjective judgments and manually adjust positions. Our strategy itself is a pure AI quantitative strategy, where macro variables, price trends, volatility, liquidity, market correlations, and capital behaviors are all reflected in trading signals through models. Therefore, whether it is increasing positions, reducing positions, lowering risk exposure, or switching assets and trading directions, it is ultimately completed by the model based on real-time data, rather than relying on the subjective judgment of fund managers.

JamesX: I basically answered this question in my last question.

Stablehunter: The binding between the crypto market and the macro environment is becoming increasingly deep. Interest rates, dollar liquidity, U.S. stock market risk appetite, and regulatory policies all affect whether capital is willing to take on risk. If expectations for interest rate cuts are delayed, the dollar strengthens, or the U.S. stock market sees a significant adjustment, this round of market trends could be interrupted. My response would be to reduce leverage, hold cash and stablecoins, and first shrink high-volatility positions, waiting for the market to re-confirm support before taking action.

Joe Zhou: Yes, the macro environment has become one of the most important forces influencing the crypto world, especially U.S. regulatory policies. In most cases, the choice is to remain inactive, waiting for the cycle to peak and then start a new round.

3. This round of market trends has shown very obvious sector iteration characteristics, with capital no longer simply replicating the previous round's hotspots. New narrative assets like ZEC and HYPE have emerged with independent trends, while many established coins continue to face pressure, reflecting a market pattern of "favoring the new and disfavoring the old." What do you think has driven this round of sector and narrative changes? How should we distinguish between new narratives with long-term viability and short-term speculative trends driven by capital?

IOSG Ventures Mario: I believe the driving force behind this round of sector iteration is the change in the structure of market participants. With market makers, quantitative traders, listed company treasury, and ETF channels entering, the pricing logic has shifted from "narrative + liquidity" to "can we calculate a number."

A token that only has voting rights and is unrelated to cash flow cannot be priced within this framework and can only rely on sentiment to support it—once sentiment retreats, it leads to a continuous decline. The fundamental reason for the pressure on established coins lies here, not in their "age."

Thus, the most concentrated actions in the entire industry over the past year have been to fill in "the layer of relationship between companies and stocks": Uniswap opened the fee switch and burned 100 million tokens after UNIfication; ether.fi directly wrote buybacks into the protocol contract on August 13, withdrawing weekly and monthly from each revenue line; Ethena is still debating the Fee Switch; Hyperliquid launched AQAv2 on August 26, routing 90% of USDC reserve earnings to the foundation to buy HYPE. The total buyback scale for the entire year of 2026 is about $640 million, with Hyperliquid and Pump.fun accounting for nearly 90%—this concentration itself is a signal: there are very few projects that truly have money available for buybacks.

So how do we distinguish between "vital new narratives" and "speculative trends driven by capital"? Internally, we look at this in the following order:

1. Is the income sustainable? Ethena is the best example: TTM (total revenue generated by the project in the past 12 months) gross fees are $322 million, but 98.2% of that is distributed to sUSDe holders, leaving only $5.85 million for the protocol itself, with only $40,000 to $50,000 left each month in the last three months. Using gross fees, it looks cheap at 3.7 times; using retained income, it is over three hundred times. The same project has two numbers that differ by two orders of magnitude. So the first step is always to separate Gross Fee (gross fees/total fees), Supply-side, and the portion truly belonging to the Token.

2. Is the buyback really returning to the holders? This is where the most pitfalls lie. Jupiter uses 50% of its revenue to buy JUP, but after buying, it is locked in Litterbox Trust for three years—accumulating about 276 million tokens, but only 134.5 million have been truly burned, and that was only after a vote. Hyperliquid's Assistance Fund is also "held" rather than burned; on-chain it is just a regular address, theoretically governable. These are all recorded on the data panel as Holders Revenue (token holders' income), but their nature is completely different. Buying ≠ burning ≠ returning.

3. What is the net amount of money spent and tokens issued? Still Hyperliquid: we do a first-order difference on the balance of the assistance fund monthly, and the actual buyback amount has dropped from one million tokens per month at the beginning of the year to six hundred thousand in July, while the staking issuance is about 826,000 tokens per month—meaning it has net inflated since July. The reason is very structural: the fund spends dollars, and when token prices rise and income falls, both sides compress the number of tokens that can be bought back. So the intuition that "rising token prices = accelerated deflation" is reversed in this type of model.

4. When income declines, is it a volume issue or a fee rate issue? Hyperliquid's income dropped from $300 million in Q3 25 to a 60% decline; we broke it down, and the drop in transaction volume only explained one-third, while the rest was due to fee compression—the market fee rate on HIP-3 dropped from 3.5bp to 0.88bp, and this part has already accounted for half of the perpetual nominal transaction volume. This distinction is fatal: if it's a volume issue, when the market returns, income will return; if the fee structure changes, even if volume returns, income won't.

5. Finally, we look at valuation multiples. Multiples are conclusions, not starting points.

As for ZEC, I believe its independent trend logic lies not in cash flow, but in "scarcity + hedging demand under tightened regulation," which is another leg. The risk of this leg lies in its high dependence on the regulatory narrative itself, and reflexivity is bidirectional.

New Fire Research Institute: The underlying driving force behind this round of sector rotation is the repricing of incremental funds for real application scenarios and compliant entry points.

The trends of representative assets in various tracks clearly reflect this logical divergence: ZEC has followed a path of "privacy assets being re-institutionalized under regulatory frameworks"; HYPE, relying on real fee income from on-chain perpetual contracts and buyback mechanisms, combined with strong expectations for compliance entry into the U.S. market, achieved explosive leadership in the August market. In contrast, established tokens generally face pressure, mainly because they were pushed up by excessive conceptual premiums in the previous cycle, while the core demands of this round of funds have shifted to pragmatism, requiring clear visibility of active users, protocol income, token buyback mechanisms, and compliant monetization exits.

To clarify the long-term value narrative versus short-term conceptual speculation, we can observe the following four signals:

• Real Demand: Are there high-frequency, repeatable real use cases on-chain or at the product end?
• Blood Generation Ability: Does the protocol have sustainable fee capture or reserve support, rather than relying on the pure selling pressure brought by one-way linear unlocking of tokens?
• Capital Channels: Are there compliant product forms, regulated custody, or institutionalized channels to accommodate off-market incremental capital?
• Value Capture: Can ecological development and revenue substantively feed back into the token itself, forming a closed loop?

Previously constrained by regulatory restrictions, mainstream projects generally suppressed token functions to weakly related "pure governance" attributes. As regulatory agencies like the SEC signal loosening in financing rules and policy boundaries, UNI, as an "old asset," is also beginning to promote income buyback mechanisms, prompting a deep binding of protocol fundamentals and token performance. Therefore, regardless of whether assets are new or old, only those that truly solidify high-frequency real use and form sustainable endogenous cash flow have the long-term viability to cross cycles.

BlockSec: Crypto has always been a very narrative-driven market, or rather, any emerging technology is narrative-driven (like today's AI and embodied intelligence), but I feel that the market's demand for "stories" is increasing this round.

We found that in the last bull market, many projects first told a sufficiently large story and then sought users and business models. This round, capital is increasingly concerned with a more realistic question: does this thing actually have users, and where does the value ultimately settle?

HYPE is a relatively typical example. Hyperliquid has not only introduced a new token, but it also has real trading activity, protocol income, and a value capture mechanism formed by token buybacks. According to recent public reports, since December 2024, it has cumulatively repurchased and burned about $1.3 billion worth of HYPE.

ZEC, on the other hand, follows a different logic. Its recent independent trend has brought privacy demand back into market discussions, while Grayscale is also promoting the conversion of Zcash Trust into an ETF. However, I would not directly conclude that "the privacy track is reviving" simply because of the price increase.

We believe that whether a new narrative can cross cycles mainly depends on three questions: Is there real demand? Is there sustained economic activity? Can value be captured by the protocol or the asset itself? If all three questions cannot be answered, then regardless of how attractive the story is, it is likely still a capital-driven trend.

So I think the so-called "favoring the new and disfavoring the old" is not just about the market liking new things. The deeper reason may be that the crypto market is re-pricing assets: historical notoriety itself is not value; the ability to continuously create demand is.

Zeuspace Yao Kun: The so-called "favoring the new and disfavoring the old" in this round essentially reflects a change in the pricing standards of capital. In the last bull market, as long as one was in a hot track with sufficient liquidity, many assets could obtain valuation premiums; however, after experiencing a complete bear market, capital has become noticeably more selective and is more willing to seek assets that can provide new growth logic.

First of all, the new round of capital needs new growth stories. The issues with many established public chains and DeFi projects are not that they have disappeared, but that the market is already very familiar with their business models, the original narratives lack new increments, and they even face historical locked positions, token unlocks, and valuation digestion issues. Therefore, even if the overall market warms up, it is difficult for them to automatically return to the previous high points.

HYPE is a relatively typical example; it has formed actual business scale in on-chain derivatives trading, with the official disclosure of the platform's annualized fees exceeding $1 billion, and it continues to buy back HYPE through mechanisms. This means that the market can clearly see the relationship between users—transaction volume—income—token value capture. When such assets rise, there is at least a verifiable fundamental logic behind them.

I believe that to judge whether a new narrative has long-term viability, we mainly look at three things.

First, can the narrative ultimately translate into real demand? We need to see if real users, transaction volume, income, developers, and ecological activities grow alongside the price. If only the token price rises without accompanying business data, it is likely still a story created by capital.

Second, can the token itself capture this growth? Even if a project has a great business, if its revenue is unrelated to the token and the supply continues to increase significantly, it may not be a good investment target in the end. Conversely, if revenue, fees, staking, buybacks, or other mechanisms can transmit ecological growth to the token's value, this narrative is more likely to form a long-term pricing foundation.

Third, we need to see where the money for the rise comes from. If it mainly relies on perpetual contracts, high funding rates, and rapidly increasing leverage, it often indicates that the sustainability of the market is relatively weak; if, after the rise, it can continue to attract spot funds, institutional funds, and new long-term holders, and these funds are still willing to support after a pullback, then the narrative may truly complete the transition from "theme" to "asset."

Thus, behind this round of sector iteration is the market eliminating old narratives that lack new volume and re-pricing assets that can bring new users, new cash flow, and new funding channels. Truly vital new narratives will ultimately be able to transition from "story" to "data"; if the story grows larger while users, cash flow, and spot funds fail to keep up, then regardless of how large the short-term increase is, it essentially remains a trading market.

JamesX: I believe the core issue is the fragmentation of liquidity in the blockchain industry. Most altcoins have lost their narrative attributes, and the number of users playing altcoins on centralized exchanges has significantly decreased. Only a few tokens with core narratives and core operators behind them, possibly combined with some favorable compliance and regulatory news, can bring about some fundamental-driven increases and growth. However, the vast majority of altcoins lack any project narrative and are purely operated by market makers. More liquidity is actually on-chain, where everyone is playing with new meme coins, some leaning towards DeFi and others being pure meme coins. This further highlights the current characteristic of liquidity fragmentation.

Stablehunter: This round of rotation is essentially the market searching for new growth and scarcity. Old narratives have trapped positions and historical valuation pressures, while new assets are more likely to form new expectations. But "new" does not equal "valuable." I will look at whether it has real users, continuous delivery, verifiable products and revenue, and whether there is still demand after the heat declines and prices pull back. If it mainly relies on topics, leverage, and short-term liquidity, it is more likely just speculation.

Joe Zhou: The strong performance of ZEC and HYPE marks a qualitative change in the preferences of crypto users------they are now voting with their money for projects that truly have real users, real transactions, and sustainable fundamentals, rather than just buying into narratives. Meanwhile, the vitality of meme assets remains robust. Both are running parallel, together outlining a new evolutionary direction for the crypto space.

4. In light of the current market environment, what specific layouts and strategy adjustments have you or your team made? How do you divide core positions and flexible funds in asset allocation?

IOSG Ventures Mario: Founded in 2017, IOSG has primarily been an early fund focused on the Ethereum ecosystem and infrastructure, and we have held the Old Friends Reunion for over a dozen sessions. Therefore, our natural preference is "to understand the tech stack and who is really using it.

The biggest change in the past two years is that we have strengthened our research capabilities in the secondary/liquid market (referring to tokens that have been listed on exchanges and can be publicly traded). The logic is simple: many targets invested in the primary market are now assets in the liquid market; if you only look at the primary market, you will completely miss the entire process of their fundamentals being validated or falsified after listing. Now we conduct a Liquid Research for each key target------breaking down revenue into every line, making buybacks and unlocks verifiable, using the same set of judgment criteria for both primary and secondary markets.

In terms of allocation, we roughly divide it into three layers:

Core positions. BTC/ETH, plus a few assets that already have real, verifiable cash flow, and whose distribution mechanisms are written into the contract rather than relying on announcements. This part does not involve timing; we buy more when it drops.

Tactical positions. Targets with clear catalyst dates------a vote on a Fee Switch, a cliff unlock passing, or the first distribution of a quarter actually landing. The benefit of this layer is that there are clear verification points; if the verification fails, we exit. For example: our judgment on ether.fi in July was to reduce, because the buyback was paused and the supporting buying power was gone; after the buyback was written into the contract on August 13, that reason no longer held, and the judgment had to change. The real value of research lies in------you know why you hold it, so you also know why you should exit.

Flexible positions. Small trial positions in new narratives, with a cap on individual amounts, allowing for total loss. The goal is not to make money, but to stay at the table and maintain information flow.

Another discipline: the unlock calendar and sources of selling pressure must be calculated before building positions. Many selling pressures are not even in the traditional vesting schedules------for example, Ethena has a Nasdaq-listed company holding about 20% of the supply with no public lock-up period; or many projects have actual circulating volumes that do not match the "unlocked" amounts, with parts being quietly released at the discretion of the foundation. If these are not clearly accounted for, no matter how precise the multiples are calculated, it is meaningless.

New Fire Research Institute: In the face of the current complex market environment, New Fire Group has always maintained strategic determination, continuously emphasizing since Bitcoin first fell below $70,000 in February that it has entered the "high cost-performance zone," and has consistently increased its holdings at the bottom with its own funds.

There is a fundamental difference in holding positions between listed companies and investment institutions or individuals: listed companies focus on business development and are constrained by the strict regulatory constraints of the SFC, so we only use a small amount of our own funds to allocate medium to long-term positions to deeply empower our main business; whereas for institutions and individuals' pure investment behavior, the ratio of core positions to flexible funds depends on the strategy style------value investors with a preference for long cycles should primarily build core positions, while trend traders or high-frequency traders need to maintain a higher proportion of flexible funds to maintain flexibility. From New Fire's perspective, the current market is in the confidence reversal phase of "bear end, bull start," and tactically, it is recommended to initially use 20% as the core position for exploratory ambush, and after the market further confirms the second bottom and clear signals on the right side, then increase the core position ratio accordingly.

In response to Bitcoin's inherent "non-interest attribute" compared to staking income assets like Ethereum, as well as the industry pain points faced by traditional investors due to long-term holding without internal cash flow, high opportunity costs, and holding anxiety, we have launched Hong Kong's first crypto-based asset management service Alpha BTC under the compliance regulatory framework of the Hong Kong Securities and Futures Commission's license No. 9, which continuously earns crypto-based returns without bearing directional risk, achieving the absolute increase of BTC while traversing bull and bear cycles.

BlockSec: I prefer not to give specific personal asset allocation ratios, as this can easily turn into investment advice, and investment itself is not BlockSec's area of expertise.

If we talk about BlockSec's layout, our thinking is actually quite simple: we do not guess who will rise in the next round, but rather do what is definitely needed in the next round. Therefore, we have not significantly adjusted our direction due to a sudden surge in a particular token or sector.

BlockSec's judgment is straightforward: blockchain is reshaping traditional financial infrastructure, and to support financial activities, security and compliance are indispensable foundational capabilities. What we have been doing has not changed over several cycles, which is to provide security and compliance guarantees for blockchain, mainly along the following two lines:

One main line is Security. As the scale of on-chain assets increases, the economic benefits of attacks will also increase. The traditional "investigate after something happens" is no longer sufficient; the industry needs more real-time monitoring, attack warnings, and proactive risk control capabilities.

Another main line is Compliance. We continue to invest in Phalcon Compliance and MetaSleuth, further building in areas such as AML/KYT, address risk analysis, continuous monitoring, and fund investigation and tracking.

At the same time, we are now very focused on the combination of AI and Crypto. On one hand, AI can significantly improve the efficiency of on-chain investigations, risk analysis, and security operations; on the other hand, when AI Agents start to have wallets and can autonomously initiate transactions, they will generate entirely new authorization, security, and compliance issues.

So if we must use investment language as a metaphor: Security and Compliance are our core positions; AI, Agentic Finance, and new on-chain financial forms are the flexible parts we are increasing research and product investment in.

We hope that BlockSec ultimately serves as the risk infrastructure of the digital asset era, rather than just a participant in a particular market hotspot.

Zeuspace Yao Kun: In the face of the current market environment, our adjustments are more focused on trading models and risk control rather than betting on a specific coin or narrative based on subjective judgment. As an AI quantitative strategy development team, we study macro factors, capital flows, and market structures, but this research primarily helps us understand the market; the real decisions on trading direction, positions, and asset selection are still determined by the model itself.

The biggest characteristics of the current market are the resurgence of volatility, increased asset differentiation, and significantly faster sector rotation. This is actually a more suitable environment for quantitative strategies to perform. Our focus is not on predicting whether the next round will definitely be BTC, ETH, or some new narrative, but on allowing the AI model to continuously identify price trends, volatility, trading volume, liquidity, capital behavior, and changes in correlations between different assets, increasing risk exposure when opportunities arise, and automatically reducing risk when market structures deteriorate.

JamesX: I believe the core positions should still be built around gold and Bitcoin. Nowadays, centralized exchanges and on-chain Perp DEX like Hyperliquid have also integrated many commodities and US stock trading targets. Therefore, under the same trading account, there are many trading options available, allowing for very quick adjustments.

Stablehunter: We now place more emphasis on position structure rather than trying to hit every rotation. I will divide funds into core positions, flexible funds, and cash or stablecoins. Core positions are responsible for long-term participation, flexible funds capture phase opportunities, and cash retains the option to respond to pullbacks and unexpected events. The important thing is not to make the most profit every time, but to still have the ability to continue participating after making a wrong judgment.

Joe Zhou: Over 90% still dollar-cost averaging into BTC and ETH.

5. From your perspective, what are the biggest variables and potential risks in the market moving forward? What cognitive traps are industry peers and market participants most likely to fall into during this market cycle?

IOSG Ventures Mario: Variables, in the order of my concern:

1. Interest rates rising instead of falling. This is the only variable that can disrupt all narratives at once. 2. The CLARITY Act failing again in the September window, with compliant funds continuing to wait, and the "tickets" not being issued. 3. The reflexivity of DAT / publicly traded companies holding tokens. They are net buyers when they purchase, but once the stock price is at a discount to NAV (Net Asset Value), they become net sellers, and the current holding size is already large enough to influence the pricing of individual tokens. 4. The fee wars in Perp DEX continue. This is currently the largest revenue pool in the industry, and it is compressing itself.

Cognitive traps, based on our own experiences and observations:

**Treating buybacks as dividends.** As mentioned earlier, buying, burning, and returning are three different things. Be clear about where the tokens ultimately go.
**Annualizing single-day or single-month data.** Ethena's fees on DefiLlama are recorded based on distribution events, with most days under a hundred dollars, and occasionally three to four million in a single day. Depending on which 30-day window you choose, the annualized results can differ by ten times. Our approach is to take the actual TTM (Total Transactional Monthly) value from the past 12 months and add the last three complete months multiplied by 4, and we specify the criteria on the page. The same logic applies: any conclusion of "X% share" that comes from just one day's data is fundamentally wrong.
**Assuming a display of 0 means "no income."** These are three different matters. The Holders Revenue of ether.fi still shows 0 after the buyback goes live because the adapter only tracks one sub-protocol; Aave has been 0 every day since June 25 because the adapter is linked to the old treasury address, and it cannot see the new buyback contract— we scanned 30 days and 180,000 AAVE transfers and couldn't find the DAO address, so we can only write "unable to verify," not "none"; while Morpho's 0 is genuinely 0, as the protocol design does not leave any income for itself. The same zero, three different natures.
**Only looking at the Vesting table to estimate selling pressure.** Morpho's circulation increased by 25% over six months, but contract unlocks can only explain 40% of that; the rest comes from governance and discretionary allocations from the reserve pool. Jupiter's unlock calendar is indeed empty, but 56% of the supply lies in three multisigs with no timeline. Those fixated on the calendar are looking at the small picture.
**Defaulting to "this cycle is the same as the last."** The effective strategies from the last cycle—buying the highest Beta and the newest narratives—may not hold in a market where fees are compressed, regulations are tightening, and incremental funds must go through compliant channels.
The last and the easiest trap to fall into this time: **mistaking survivor bias for ability during a rebound.** There are many assets that have risen 40% to 100% from the bottom, but the correlation between price increase and fundamentals is actually very low. Don't confuse Beta with Alpha.

(Beta refers to the returns driven by the overall market trend; when the market rebounds, most coins rise along with it; Alpha refers to excess returns obtained through the fundamentals of the asset itself and personal research capabilities, independent of the overall market rise.)

New Fire Research Institute: From the current perspective, the biggest variable facing the market is the uncertainty in industry policy brought about by the restructuring of the political landscape after the U.S. midterm elections. As Trump's term enters its second half, the power dynamics in both houses of Congress may tighten, revealing the effects of a presidential lame duck.

**The potential risk is the continued suppression of global liquidity by a high-interest-rate environment, compounded by the high valuation bubble in U.S. stocks;** if traditional markets trigger a mean reversion in valuations due to tightening liquidity or disappointing earnings, the severe corrections will spill over through liquidity and risk aversion channels, systematically suppressing crypto assets.
Faced with the complexities of cyclical transitions, investors often fall into **two cognitive traps**: first, the mechanical application of old cycle halving rhythms or rotation patterns, ignoring the fundamental restructuring of underlying capital structures and investor profiles brought about by ETF approvals, stablecoin legislation advancements, DAT company layouts, and RWA explosions; second, liquidity mismatches, where in extreme emotional states, investors prematurely exhaust their chips, and upon seeing a slight rebound, they over-leverage due to anxiety about missing out, depleting their maneuverable positions, leading to a complete loss of the ability to smooth costs and accumulate at lower prices when the market faces a second bottom or external black swan shocks.

BlockSec: I believe a significant risk ahead is that the speed of asset and business growth may far outpace the speed of risk infrastructure development.

This issue is particularly evident in a bull market. When asset prices rise and TVL increases rapidly, a vulnerability that could previously cause a loss of $1 million may suddenly become an attack opportunity worth over $100 million; a previously small compliance issue could also rapidly amplify with the entry of payment and institutional funds.
At the same time, new forms of risk are rapidly emerging in the industry. For instance, after AI agents begin participating in on-chain transactions, who has the authority to authorize a transaction? If an agent is manipulated through prompt injection (the number one security risk in the AI agent field) or other means, who is responsible? How can we limit the assets it can transfer? Some security assumptions from the traditional wallet era may need to be re-discussed.
So I think there are two cognitive traps that are easy to fall into this cycle.
One is: the market has risen, so the risk has decreased. In reality, it is often quite the opposite. The more expensive the asset, the greater the incentive for attackers.
Another is: the regulatory environment is friendly, so compliance is no longer important. A clearer regulatory environment truly means that more institutions can enter; and once institutions enter, the requirements for AML, KYT, sanctions screening, source of funds, and risk management will only become more specific.
Therefore, what I am most concerned about in this market cycle is not how high BTC can rise, but rather **when tens of trillions of dollars or more in value truly enters the chain, do we have the security, compliance, and risk infrastructure that matches this asset scale?** This may be the key to whether Crypto can transition from a bull market to a long-term financial infrastructure.

Zeuspace Yao Kun: From the perspective of our quantitative institution, we are most concerned about whether the current market environment can be sustained. The crypto market is now highly financialized, increasingly influenced by global liquidity, institutional funds, and regulatory frameworks, so the biggest risk actually comes from sudden shifts in market conditions.

From a macro perspective, the biggest external risk remains liquidity reversal. The current market cycle is occurring against a backdrop of still high long-term interest rates in the U.S., with inflation and geopolitical risks not fully dissipated, so the fundamentals are not particularly loose. If inflation rises again, the Federal Reserve tightens policy again, and both the dollar and real interest rates strengthen simultaneously, compounded by a decline in risk appetite in U.S. stocks, it could shift ETF funds from continuous inflow to outflow.

From the market itself, I believe the biggest risk is that **the speed of price increases exceeds the speed of fundamental and real liquidity expansion.** At the beginning of a market cycle, funds often concentrate on a few strong assets and popular narratives, easily creating a wealth effect, followed by a rapid increase in leverage, chasing funds, and new narratives. If prices rise quickly, but stablecoins, spot transactions, real users, and long-term funds do not expand in sync, the market may appear increasingly hot on the surface, but the structure becomes increasingly fragile.

Therefore, I believe there are three cognitive traps that are likely to emerge in this market cycle.

The first trap is **mistaking Beta for Alpha.** In a bull market or strong rebound phase, most assets may rise, which can easily lead investors to mistakenly believe that their research or coin selection abilities are very strong. But true Alpha should be able to achieve relatively stable risk-adjusted returns under different market conditions, rather than relying solely on the overall market rise.
The second trap is **equating price increases with fundamental improvements.** Especially with new narrative assets, price increases can create attention, trading volume, and stories, forming strong reflexivity. However, prices can lead fundamentals by a long way. We are more concerned with whether users, revenue, liquidity, and token value capture can ultimately keep pace with prices, rather than assuming that just because an asset has increased several times, it must have long-term value.
The third trap, which I believe is the most dangerous, is **mechanically replicating the experiences of the last bull market.** Many people still habitually allocate according to the fixed script of "BTC rises, then ETH rises, then altcoins rise," or believe that assets that performed well in the last cycle will definitely catch up this time. However, it has become very clear this time that funds are re-selecting assets, and the relative performance between new and old narratives, fundamentals, and institutional fund entry points will change. Every market cycle has similarities, but they never completely repeat.
This is also why we rely more on AI quantitative systems. **The weakness of humans is that they easily form narratives after a rise and then use those narratives to reinforce existing judgments; the value of models lies in continuously re-reading data and allowing the market to tell us that the original rules have failed.** For us, what we truly need to manage is not a single rise or fall, but whether the model can timely identify structural changes in trends, volatility, liquidity, and correlations.

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