Unlike many people who enjoy making bold predictions during a bull market, eagerly forecasting that Bitcoin will rise to XXX next month or by the end of the year, I do not particularly like this kind of celebratory cheer. Instead, I prefer to share my long-held views during bear markets, especially when the popularity has dissipated to an extreme point and even so-called "big names" in the circle begin to lament online:

The future of the crypto ecosystem is extremely bright; temporary darkness and downturns cannot cover up the fundamental color and potential of this ecosystem and these assets.

However, very few people can see this fundamental color and potential, especially during downturns when even fewer see or believe it. Thus, this ecosystem is bound to be brutal. It will eliminate batches of projects and dazzling stars that once appeared to be glamorous in rounds of such downturns and lows.

Ultimately, those who can reap significant rewards in this ecosystem will be few and far between.

Today, I would like to share a long article published recently by a "senior insider" titled "Bitcoin and Cryptocurrency Have Reached the Endgame" (for details, please refer to the link at the end of the article) and my thoughts on this article.

This article analyzes various angles including Bitcoin's value anchor, the cost investment and income of Bitcoin mining, the irrationality of "gambling" in the crypto ecosystem, margin and leverage risks in the crypto ecosystem, and the use of crypto technology in stablecoins, arriving at the following conclusion:

"The industry will not disappear, but it will shrink significantly. The demands for censorship-resistant transfers and free trading are real and will persist long-term, albeit on a scale much smaller than currently. Ultimately, the industry will contract to a size that matches the real inflow of funds—when the newly inflowed funds just cover the operational costs of the system, the industry will reach equilibrium. The market value at that equilibrium point may be just a fraction of the current figure."

My fundamental disagreement with this conclusion lies in the following point:

The viewpoint believes that the current scale of the crypto industry is exaggerated and does not justify the current market price. The deeper implication of this viewpoint is that the demand and intrinsic value of "censorship resistance" and "free trading" do not justify the current market price.

I believe that this viewpoint is limited by a "centralized" perspective, thus underestimating the value of "decentralization," and consequently underestimating the potential value of censorship resistance and free trading.

The core spirit driving "censorship resistance" and "free trading" can be traced back to the values of classical liberalism.

Apart from the well-known "Mr. Democracy" and "Mr. Science," I believe that the values of classical liberalism are one of the core elements that enable Western capitalist countries, especially the United States as a typical example, to continually achieve brilliant accomplishments in technology, finance, and innovation.

Cryptographic technology and crypto assets are precisely a new world recreated in the virtual realm based on classical liberal values, through a different avenue.

This historical significance and value have not yet been recognized by many people.

The world shaped by classical liberal values is a fantastic world. To describe it with a phrase I particularly like, it is "ordered chaos"—it appears chaotic and even disorganized on the surface, but underneath, there is a solid set of institutions and constraints.

There is a good article online that compares two cases in capitalist countries based on "ordered chaos": the United States and Japan (for details, please refer to the link at the end of the article).

In the United States: on one side, there is the ravaged Detroit and the drug-infested Philadelphia, while on the other side, there is Wall Street, which influences the heartbeat of the world, and Silicon Valley, leading human technological advancement; on one side, Washington creates turmoil, while on the other side, the president is strictly constrained by the constitution.

This country always moves forward in a wave-like manner through cycles of great depressions and great prosperity; one side creates human tragedies, while on the other side from time to time creates human miracles.

Japan, on the other hand, has meticulously clean streets, orderly citizens, and politicians who are "gentle, humble, frugal, and accommodating." Even abandoned cities and villages are neat and tidy as if they were just organized yesterday. Drug addicts and devastation like that in the United States are rare. Everything appears so beautiful. But there’s a feeling that something seems to be missing, and one wonders why disruptive innovation and enterprises that lead human progress do not emerge, grow, and thrive in succession as they do in the United States.

In my view, the answer is clear:

It is precisely because Japan lacks the nurturing of classical liberal values, let alone the long-term practice in this regard.

Let’s look at the crypto ecosystem; does it not bear resemblance to the United States?

On one side, there are street fraudsters, thugs, and lunatics; on the other, there are seemingly incredible individuals like Vitalik; on one side, there are ravaged projects, being stolen from, robbed, and "colluded," but on the other side, all of this is evident in the on-chain world, heavily constrained by smart contracts and cryptographic technology.

In the crypto ecosystem, a mix of people from all walks of life and PhD graduates from prestigious universities can openly discuss their feelings at the same table, while casino memes and great ideals can coexist harmoniously on-chain.

This is a typical manifestation of "ordered chaos."

Though this on-chain world is still in its infancy and remains imperfect in many aspects, it increasingly resembles a newly formed world deeply embedded with classical liberal genes.

During the Self-Strengthening Movement, Li Hongzhang once borrowed money from foreign banks. For this huge deal, foreign banks fought tooth and nail. But when the British saw that Li was inclined to borrow money from American banks, they angrily retorted something to the effect of, "How many years has that country been established? They are all fraudsters and farmers that we do not want, lacking everything, and they cannot match any conditions of the British Empire. What was Mr. Li thinking?"

Indeed, at that time, the United States had nothing, but it possessed the classical liberal genes that Britain was gradually losing, so it was only a matter of time before it surpassed the British Empire.

The same reasoning applies today: how many years has the crypto world existed? Compared to other mature virtual ecosystems, it has nothing, but it possesses the classical liberal genes that no other virtual ecosystem has.

Therefore, it is undoubtedly poised to become unique in the future, supporting a vast expanse of opportunities. Its potential and value are certainly not as pessimistic and narrow as suggested in the earlier viewpoints.

Reference Links:

1. https://wublock123.com/articles/yang-haipo-bitcoin-crypto-endgame-58829

2. https://x.com/erchenlu1/status/2042452513836679535?s=20

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