Crypto has moved past its utopian phase, according to a commentary by Matti translated by Chopper for Foresight News and published by MarsBit.
The article says a common view in the market today is that crypto has become an outlet for excess liquidity. A large number of people are leaving the sector, with the main reason being that the financial returns delivered by the industry have fallen well short of the expectations built over the past decade. In the author’s view, the market did not deliver on the vision many had once believed in.
Matti argues that this bear market marks the end of an era. The bigger question, he writes, is not only that prices fell, but what exactly the market is mourning now that the old narrative has broken down.
2021 is described as the peak of inflated expectations
Looking back, the article says the boom of 2021 has since been exposed as an illusion. Using the Gartner Hype Cycle as a frame, Matti places that period at the peak of inflated expectations.
The current phase is presented as a moment of sobriety. That shift is forcing the industry back to first principles: reassessing token value, strengthening the security of decentralized finance, or DeFi, protocols, and looking for new use cases where crypto technology can create real value.
The piece also makes a more ironic point. What the market has managed to see clearly, it says, is that uncertainty remains. Because the industry never properly identified the root causes of its failures, it has kept repeating the same cyclical and reflexive speculative loops.
From 2017 through 2021, across several market validation phases, the article says crypto fell into a fixed pattern of thinking: when all you have is a hammer, everything looks like a nail. With capital pouring in, the sector turned into a solution in search of problems.
The author adds that history has already shown that genuine genius is scarce, but as long as credulous participants remain, fraud will keep appearing. In that sense, crypto assets may have become one of the most reflexive asset classes in history.
Early token liquidity fueled the mania and later the unwind
Matti argues that the financial frenzy was built on one structural feature: tokens could trade very early. In the author’s telling, the excessive spread of that feature became part of what drove the bubble to break.
The article says signs were already visible in 2024. Faced with a choice between exploration and monetization, the industry chose monetization. Incentives kept pushing participants toward maximizing short-term returns, and two years later the market is living with the consequences of that decision.
The author also revisits an older belief. Demand creates engineering, Matti writes, but curiosity creates invention. Recent DeFi hacks are described as a signal that real-world pressure is forcing engineering upgrades. At the same time, the attacks are framed as an opportunity to revisit first-generation designs and keep iterating, with token models singled out as one important area.
Curiosity, the article says, cannot be manufactured from the outside. It comes from genuine interest rather than the pursuit of profit. Returns can exist alongside curiosity, but they cannot serve as the precondition for frontier innovation.
The collapse of the fantasy is framed as a turning point
The piece ties the end of the fantasy to a broader cultural shift in crypto. More people now recognize that the industry is no longer in its earliest phase. For strong builders and investors, Matti says, that is a challenge rather than a wall.
If the technology adoption curve is placed on top of the hype cycle, the trough of disillusionment lands near the middle of the curve, the article argues. Matti links that position to the turning point described in the work of Carlota Perez.
The central challenge has not changed, according to the piece: crypto is trying to rebuild finance from the ground up. That was never going to be easy. The path is expected to include repeated iterations, repeated failures, and repeated confrontations with reality.
In one sense, the author says, the industry has returned to the beginning. That does not mean past efforts were worthless. Even if the sector is stagnant for now, asymmetric investment opportunities still exist, and individuals still have room to help shape what comes next.
The greater risk at this point, the article says, is throwing away the useful parts together with the bad ones and rejecting everything outright. Even some of the former true believers and evangelists are leaving. The market once imagined a future measured in the hundreds of trillions, but what has actually emerged so far is only about 200 digital asset treasury companies.
The article rejects the idea that crypto VC is dead
On venture capital, Matti explicitly disagrees with claims that crypto VC is dead or close to death.
The article says venture capital as a whole is in a difficult period, with DPI failing to meet expectations and fundraising becoming much harder. Within crypto, limited partners, or LPs, who had grown used to outsized returns every four years are now leaving disappointed. But the author argues that the extraordinary gains seen from 2016 to 2021 were an exception in venture investing, not the norm.
During that period, crypto was packaged as both a revolution and a new asset class. A still-immature market absorbed huge amounts of capital, far beyond what the sector could use effectively. The frenzy peaked in 2021, followed by a long washout period in which short-term speculation took over. The article says the industry has now entered a consolidation phase.
Matti cites the book Boom and Bust: A Global History of Financial Bubbles in paraphrased form through the Chinese title used in the article, writing that a revolution may still become real, just as Britain still has its rail network, but the utopia imagined by participants in the frenzy never becomes reality.
From cypherpunk roots to alignment with Wall Street and regulators
The commentary points to a deeper ideological reversal. The original cypherpunk subculture that helped give rise to Bitcoin is now described as moving toward Wall Street and regulators, with the industry’s future increasingly tied to policymakers.
Matti says that is not just ironic. It is also a feature of bubble cycles. The article points to Google as an example, saying the company once warned publicly that advertising would damage search quality, only to build a vast business empire on ads later.
The piece then quotes at length from the same book to argue that this kind of ideological reversal is not unusual. It compares the pattern to Martin Luther, a devout Catholic cleric who ultimately split the church, and to Napoleon, who joined movements against monarchy and later became a dictator himself. The author’s point is that movements trying to destroy powerful systems often end up building new systems that reproduce many of the same traits.
Crypto is turning from frontier narrative into business
The article argues that the industry has now abandoned the fantasy of a crypto utopia. The revolution did not arrive on schedule. Instead, crypto is being absorbed into the existing system — or, from another angle, assimilated or corrupted by it. In the author’s view, the compromises the sector has made are one of the few workable paths left after the market slid into a speculative casino following 2021.
Using Carlota Perez’s framework, Matti describes this as a stage transition. The utopian vision belonged to the earlier deployment buildup. The collapse of that vision is the turning point. What follows is a more rational phase of deployment, and the investment approach for that stage is very different from what came before.
Crypto is no longer purely a frontier field, the article says. It is becoming a business. The author does not present that as either good or bad, only as a sign of maturation. New crypto projects today are grouped into five broad categories:
- Stablecoins
- Prediction markets
- Tokenized assets / real-world assets, or RWA
- Perpetual contracts
- Artificial intelligence and intelligent agents
In the author’s phrasing, crypto is in some respects swallowing fintech, or fintech is assimilating crypto. Either way, it remains far from the DeFi revolution many once imagined. The next task is to find a killer application beyond stablecoins within the boundaries regulators allow.
Even so, Matti says the sector can still produce companies with long-term staying power over the next few years, and that the search for top founders and strong products will continue.
A case for reconciliation
The article closes by holding two ideas together at once. One is that crypto is changing the underlying mechanics of how value is stored and transferred. The other is that crypto is also becoming a business category that operates under existing financial rules.
Matti tries to reconcile those views by suggesting that crypto may enter daily life in ways that are hard to notice at first. The deepest changes often arrive quietly and become obvious only in hindsight. They rarely show up under giant slogans about a market worth hundreds of trillions. Instead, they settle into existing systems and into everyday understanding.
The final point is that crypto tends to be more creative under pressure than under mass attention. People driven by curiosity, the author writes, will keep rethinking and rebuilding. There is still a great deal left to build, and still a great deal worth pursuing. Matti’s conclusion is simple: the belief remains.