This week, Chainlink co-founder Sergey Nazarov once again discussed the current crypto downturn, pointing out that this time is different from the traditional bear markets characterized by "price halving and on-chain zero activity": RWA tokenization and on-chain commodity perpetual contracts have become new structural variables. Beneath the icy price sentiment, institutional-grade on-chain yield products are beginning to rise, with speculative and real yield positions facing off on the same chain for the first time. The following article will track how the market shifts from "betting on price fluctuations" to "buying cash flows that can provide sustainable dividends" through two main lines: capital flow and narrative evolution, and how this shift will rewrite the backdrop of the next bull and bear cycles.

Under Price Stagnation: Capital Quietly Changes Course

● On the surface, Bitcoin and Ethereum remain in a prolonged period of stagnation and low volatility, with retail attention ground down to a minimum, but on-chain data shows a structural shift in capital behavior: high-frequency, heavily leveraged short-term speculation is cooling, while more funds are flowing into mid- to long-term, measurable yield protocols and products. This "price stagnation and position reconstruction" misalignment is often an early signal of the previous narrative receding and the next narrative quietly taking over.

● A newly created address exposed by on-chain monitoring account Lookonchain, which went long on ETH with 20x leverage for a nominal size of about $33.38 million, stands out in the quiet market. This type of extreme leveraged position betting on the next big bullish candle continues the old cycle's gambling mentality: amplifying returns through short-term directional volatility rather than managing the balance sheet. This behavior has not disappeared, but in the context of overall market exposure contraction, it resembles a part of the capital's "last stubbornness."

● In stark contrast to these high-leverage positions is the hundreds of millions of dollars quietly flowing into various protocols during the same period, aiming not for price doubling but to earn predictable real yields on-chain. Whether depositing into money market protocols, participating in on-chain bond issuance, or entering RWA-related pools, this type of capital largely comes from constrained investment portfolios, seeking a balance between annualized returns and risk exposure. The differentiation in capital character—one side being noisy but highly concentrated speculative positions, the other being taciturn but large-scale allocation funds—is reshaping the market power structure.

$450 Million Moves: Institutions Begin Testing On-Chain Yields

● Recently, data from research briefs indicated that Coinbase users deposited approximately $450 million into the Morpho protocol in a single transaction. This migration is not a typical DeFi "new listing," but rather resembles a traditional financial "capital move": flowing from regulated custody and trading environments to protocol-based scenarios that can yield higher on-chain returns while still needing to control risks. This indicates that the user base of compliant exchanges—including some institutions and high-net-worth clients—has begun to view "protocol yields" as an optional asset allocation tool rather than just a speculative testing ground.

● A group of institutional-grade yield products represented by Steakhouse is building a "translation layer" on the other end: packaging RWA and on-chain bonds into asset forms that can be understood by the risk control departments of banks, brokerages, and family offices. They focus not on the narrative of a specific token but on traditional financial language such as duration, default risk, collateral quality, and liquidation mechanisms, thereby opening compliant interfaces for RWA products to access more funds that "need to be explained to investment committees."

● This type of allocation capital is fundamentally different from the retail capital that only chases price fluctuations: the former's decision-making framework revolves around balance sheets, cash flow discounting, and portfolio risk exposure, paying close attention to lock-up periods, interest rate curve shapes, and regulatory compliance; the latter revolves around candlestick patterns and emotional amplification, rarely discussing duration management. As RWA and on-chain bond tools gradually enrich, more capital will shift from "chasing narratives" to "selecting cash flows," thereby raising the entire market's requirements for risk pricing.

● In this migration process, the watershed of the new bull and bear cycle is becoming apparent: those who can meet compliant institutions' demand for transparent, auditable, and sustainable yields will secure their tickets for the second half. Conversely, scenarios that can only provide high volatility and lack underlying support for token speculation will be gradually pushed to the margins under the dual pressure of regulatory tightening and changing capital preferences. The next round of "star projects" may not be those telling the best stories, but rather those protocols that can reliably bring real-world cash flows onto the chain.

Correlation Shatters Myths: Bitcoin is No Longer "Gold's High Beta"

● Cathie Wood recently provided data indicating that the correlation coefficient between Bitcoin and gold returns is only about 0.14, far lower than the long-held market belief that "Bitcoin = gold's high beta version." This number not only undermines the simplistic analogy of "digital gold" but also shakes the traditional asset management thinking that builds crypto allocations based on "gold style": if the correlation is so low, then Bitcoin is neither a standard safe-haven asset nor easily categorized as a magnifying glass for gold.

● More awkwardly, in the current macro environment of constant switching and fluctuating interest rate expectations, traditional asset class frameworks also struggle to explain Bitcoin's muted price reactions: macro variables may fluctuate, but Bitcoin often just lethargically follows or simply lies flat on the floor. This sense of "decoupling" weakens Bitcoin's appeal as a macro trading tool while providing RWA and new narratives with room to maneuver—when you can no longer explain Bitcoin's price with "macro trading," capital will naturally seek assets with a more anchored relationship to the real economy.

● As the "anti-inflation" and "digital gold" narratives gradually fade, RWA projects that can provide real, distributable yields on-chain are more aligned with institutional investors' asset pricing logic. Compared to betting on a highly volatile, correlation-unstable price symbol, they prefer to look at: the cash flow sources of underlying assets, default risks, regulatory environments, and how this yield is classified on the books. Under this preference, projects that "package real-world assets with on-chain structures" appear more sticky than those that "tell a grander narrative."

DAT Strategy Fails: Old Cycle Indicators and Alpha are Retreating

● CryptoQuant CEO Ki Young Ju bluntly stated that the widely cited DAT strategy has failed, and Bitcoin is experiencing over-selling, which amounts to admitting that the entire set of indicators built around on-chain activity, capital inflows and outflows, hoarding, and selling behavior from the previous cycle is losing its explanatory power over dominant capital. When on-chain whales, ETF holdings, and derivatives structures change, the old indicators capture only increasingly noisy fragments.

● More practically, when ETF net flows and traditional on-chain indicators no longer provide clear direction, the logic of capital behavior will naturally return to the origin of "cash flow": rather than betting on when the next big bullish candle will appear, it is better to lock in a predictable source of yield and treat time as a friend rather than an enemy. This shift from "timing bets" to "yield curve management" reduces the importance of short-term price fluctuations, allowing assets that can provide sustainable dividends to gain higher weight.

● It is in this gap that RWA, on-chain bonds, and commodity perpetuals have found their place: price volatility is no longer the sole source of alpha; cash flow itself is beginning to be repriced. Unlike traditional DeFi "liquidity mining," these products attempt to bring real-world rents, interest, dividends, etc., onto the chain, transforming them into income streams that can be split, traded, and recombined within a compliant framework. For capital "betrayed" by old indicators, this represents a migration from emotional structure back to asset structure.

zkEVM and RWA: Infrastructure Making Way for the Real Economy

● On the technical front, Ethereum is advancing EIP-8025, attempting to replace repeated execution of transactions with zkEVM proofs. This structural adjustment focuses on compressing computation with proofs, shifting more execution burdens to the proof generation side, freeing up valuable performance and cost space for the main chain. For real-world assets (RWA) and on-chain commodity perpetuals that may require high-frequency settlements in the future, this means more predictable transaction costs and throughput capabilities, avoiding "on-chain congestion" becoming a hard constraint for real assets to go on-chain.

● When RWA, on-chain commodity perpetuals, and institutional-grade yield products truly begin to scale, if the main chain remains positioned as a "gamblers' paradise," it will struggle to accommodate high-frequency, rigid settlement demands. Instead, it must evolve into a highly efficient, trustworthy settlement layer: controllable fees, verifiable transactions, and traceable liquidations. Conservative yet critical underlying upgrades like EIP-8025 are essentially preemptively freeing up capacity for "on-chain assets to transition from speculation to practicality," avoiding being choked by performance bottlenecks during business expansion.

● Interestingly, the evolution path of the underlying architecture appears particularly pragmatic—compressing costs, improving efficiency, and strengthening security—while the upper-level asset narratives are rapidly tilting towards the real economy: from narrative coins and MEMEs to government bonds, credit assets, and commodity revenue rights. The technical side is no longer about "disrupting everything," but rather providing a smoother on-chain pathway for traditional financial logic. This combination of "conservative infrastructure + radical asset narratives" precisely outlines the main line of the new cycle: the chain is no longer a story factory but the infrastructure for cash flow to ascend the chain.

Behind the Altcoin Spat: Who Can Capture Real Cash Flow

● Recently, a public debate between BitMEX founder and former Multicoin founder over whether altcoins have long-term value surfaced, ostensibly a moral judgment on "junk coins" and "high-risk innovations," but essentially a race to seize the narrative and capital pricing power for the next round: one side emphasizes that most altcoins lack fundamental support, while the other insists that "high-volatility innovative assets" have their place in a portfolio. The underlying tone of this debate is a race to determine "which type of assets will receive higher valuations from future capital."

● Meanwhile, the comprehensive investigation by Korea's FSS into Bithumb also serves as a reminder to the market: exchange models primarily focused on high-frequency speculation and lacking real asset support are quickly exhausting their regulatory dividends. Under heightened compliance pressure, platforms that merely offer "high leverage + high volatility + thin disclosure" will be continuously squeezed, while business forms that can combine compliance, transparency, and practical value will passively welcome opportunities for valuation reassessment. Regulation is no longer just a risk but is redefining the pools of "investable" and "non-investable" assets.

● Following this line of reasoning, the crypto market is likely to be re-layered in the future: one layer will exist under high regulatory intensity and tax scrutiny, still present but limited in space for price speculation; another layer will be the long-term asset allocation layer built around RWA and on-chain yields, serving the long-term liability constraints of institutions such as pension funds, family offices, and sovereign wealth funds. The two layers are not entirely disconnected, but there will be significant differentiation in pricing logic, holder structure, and regulatory requirements.

● The real game has never been about which public chain tells the loudest story, but rather who can safely and transparently bring real-world cash flows onto the chain under stringent regulations and technical constraints. This means that candlesticks and emotions are no longer the sole productivity drivers; legal texts, asset due diligence, risk isolation, and liquidation mechanisms will be equally important as code. Under the RWA boom, the speculative market may not completely retreat, but it is making way for a larger group of participants—those accustomed to looking at cash flows and financial statements.

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