An opinion piece carried by PANews says the anxiety spreading across the crypto sector is not only about altcoins collapsing, quiet major exchanges, or capital and talent shifting toward artificial intelligence and U.S. equities. Writer Haotian argues that the deeper problem is a loss of innovation inside crypto itself, and he frames that decline through three structural pressures affecting the market.
An inflated infrastructure stack and a thin application layer
Haotian’s first point is that this cycle has become overloaded with technical narratives, creating what he describes as a structural imbalance between infrastructure and applications. Developers and project teams, he writes, have crowded into areas such as new chains, Layer2 networks, cross-chain bridges, data availability, zero-knowledge technology, and parallel EVM designs. The stack has grown taller, valuations have climbed, yet the application side remains close to empty.
He contrasts that with the last crypto cycle, when DeFi, NFTs, and GameFi created rotation across infrastructure, community, and application layers. In the current cycle, he says, the dominant pattern has been building chains and then building faster chains, while projects capable of bringing in new communities or new real demand have largely disappeared. MEME tokens may have briefly carried some of that attention, he writes, but their lack of fundamentals, speculative character, and strong extraction features mean they cannot replace missing applications. Instead, they create short-lived swings in sentiment and drain liquidity over a longer period.
Exchanges and the breakdown of value transmission
His second argument focuses on what he calls short-term thinking by entrenched industry players. Rather than simply accusing major exchanges of doing nothing, Haotian says it is more accurate to recognize their "brokerage" nature. In an environment where strong projects are scarce and many listings are followed by immediate selling, he argues exchanges should have taken on the work of identifying, screening, and guiding projects with real value.
According to the article, the opposite happened. Exchanges embraced the surge in MEME listings, allowing large numbers of tokens with no fundamentals and heavy reliance on emotion-driven trading and extraction design to reach the market. Haotian says that process wiped out the old screening route in which value and liquidity moved step by step from on-chain activity to smaller exchanges, then to mid-sized venues, and finally to major exchanges.
He adds that exchanges did receive short-term benefits from that shift, including trading volume, fee revenue, and support from FOMO-driven communities. Over a longer horizon, though, he says value projects were pushed to the margins. When the market reaches a point where there are few native crypto tokens left to list and attention has to be sustained by U.S. equity-related themes, he argues, the sector has effectively given up its own voice and pricing power.
Weaker community cohesion and fading developer incentives
The third issue in Haotian’s view is the loss of cohesion in the crypto community and the weakening of the sector’s creative energy. He describes the previous cycle as a period when on-chain experimentation stayed active and capital rotated from infrastructure to applications and then to segments that depended more heavily on community operations, including gaming and social projects. Activities such as airdrop farming, open-source contribution, exploring niche sectors, and DeGen trading all carried the possibility that focused effort could eventually pay off.
This cycle looks different in his account. Technical narratives have become highly homogeneous, venture capital in the primary market has struggled to find exit paths, and investment has slowed. At the same time, many developers and communities are no longer getting positive feedback from what they build or contribute on-chain. If that continues, he writes, the experimentation and energy that crypto once took pride in will lose their base of support, and more strong developers will keep moving into AI.
AI is the surface explanation, not the core cause
Haotian says complaints about AI weakening crypto’s appeal miss the deeper issue. In his telling, AI is only the visible outlet drawing away people and capital. The more fundamental reason is that crypto’s own internal capacity for innovation has eroded.
The article is published by PANews and credited to Haotian. It also states that the piece reflects the author’s personal view, does not represent PANews’ position, and does not constitute investment advice.