What is the “crypto market extinction theory”?

Since the peak of the bull market in 2021, the crypto market has experienced several severe fluctuations. In the first half of 2025, as Bitcoin repeatedly fell below $100,000 and the correction of mainstream cryptocurrencies like Ethereum widened, social platforms and financial media frequently raised the question of whether the “crypto market is dead.” The so-called “theory of the demise of the crypto market” refers to the loss of confidence in cryptocurrencies, with people believing that they will completely exit the mainstream view, or even cease to exist.

Current Market Overview

Figure:https://www.gate.com/trade/BTC_USDT

By June 2025, the price of Bitcoin stabilizes around $100,000. Previously, influenced by geopolitical conflicts, the price had once dipped to $100,400. However, as the situation calms and institutional buying returns, Bitcoin regains its psychological defense line. From a technical perspective, the number of active addresses on the chain and the inflow of stablecoins remain in the mid-to-high range, indicating that the market has not completely fallen into silence.

The Altcoin market has shown differentiation. For example, new public chains like SOL and TON remain relatively active, while MEME coins and the NFT sector have clearly declined. Overall, the market is in a period of adjustment, not a period of termination.

How does the macro environment affect the crypto market?

Changes in the global interest rate environment have a direct impact on crypto assets. As the Federal Reserve hints at the start of a rate cut cycle before the end of the year, risk assets are experiencing a temporary boost. However, due to the inherent volatility of the crypto market, investor sentiment remains cautious.

In addition, the differences in attitudes among U.S. presidential candidates also affect market expectations. In early June, Musk and Trump had a fierce exchange on social media, and the market briefly believed that the Republican Party was more inclined to support the crypto industry. Policy uncertainty has led to fluctuating market sentiment and intensified the debate over whether encryption will perish.

Technical development is still ongoing.

Despite the fluctuations in cryptocurrency prices, technological development has not ceased. Layer 2 networks represented by Ethereum continue to expand, with numerous projects still launching in ecosystems like Arbitrum and Optimism. Cutting-edge technologies such as zero-knowledge proofs (ZK), modular blockchains, and the integration of AI and blockchain continue to attract investment.

For example, modular projects like Celestia and Initia are continuously expanding the Web3 architecture, while projects like Worldcoin and Giza are promoting the on-chain implementation of biometric and AI algorithms. It is evident that underlying innovations remain vibrant.

The evolution of institutional funds and regulatory attitudes

Despite clear signs of retail investors exiting the market, institutional funds continue to be deployed. For example, giants like BlackRock and Fidelity are launching spot ETFs, accelerating the integration of traditional finance and encryption.

On the other hand, global regulation is also maturing. From Hong Kong to the UAE, various regions are establishing relatively friendly compliance frameworks to provide a safe operating environment for projects. The “disappearance” of the crypto market is not a fact, but rather a transformation process for the market to adapt to the new landscape.

Where is the crypto market headed in the future?

Looking back over the past 10 years, the crypto market has experienced several “death prophecies,” yet has rebounded strongly in the next cycle. From decentralized finance (DeFi) to NFTs, and now AI×Crypto, each wave of innovation has proven the vitality of blockchain technology.

In the short term, price volatility and regulatory uncertainty will continue to accompany the market. However, from a long-term perspective, the crypto market, as a part of global asset allocation and technological innovation, remains full of potential.