The speculation and hype have completely retreated, and compliant private equity entities leading the new round of bull market.

Written by: Luke

Translated by: Saoirse, Foresight News

You are standing on the eve of the largest transformation in cryptocurrency history. If you want to continue to delve into this industry, you must keep a close eye on everything that is happening right now.

Currently, the industry faces three core issues:

• What determines the value of tokens?
• How to implement various cutting-edge technologies in the blockchain ecosystem?
• What will happen to the market when cryptocurrency is no longer an independent asset but becomes the underlying infrastructure of traditional finance?

I can analyze these three issues purely from a theoretical level one by one. Countless people do this every day, but empty theoretical discussions can never reach conclusions. Therefore, I plan to take a different approach: to outline the real changes that will occur in the industry from now until 2029 in stages, marking specific subjects, data, and timelines, making the content concrete enough that three years later, everyone can look back and verify whether my judgments were accurate. This is just one of many possible futures, and some inferences are bound to be incorrect. However, vague and hollow predictions about the future cannot be falsified, and views that cannot be falsified have no value. I would rather give clear but possibly wrong assessments than say ambiguous, never failing platitudes.

The perspective of this prediction comes from my working environment: I have long been deeply involved in the intersection of crypto startups, industry regulation, and venture capital, communicating closely with alternative asset managers and capital allocators every week. This does not represent that my judgments are necessarily correct, but my simulations sufficiently consider various constraints in reality.

Mid-2026: High-quality targets are no longer various tokens

By mid-2026, before the market has unified the criteria for token value, the private placement perpetual contract market has already successfully run through the product-market fit.

This transformation began with the Hyperliquid platform. The platform's SpaceX private perpetual contract was initially criticized for manipulation of market conditions by Ventuals, but later became the most closely monitored price reference in both primary and secondary markets. By July, major banks and hedge funds would reference this contract to price their privately held assets, and trading software like Robinhood aimed at ordinary users would also use it to predict the opening price after a company goes public. In the weeks leading up to large enterprises going public, the price of this perpetual contract would actually align precisely with the final opening price, to an extent that left the investment banking underwriting teams, who charged seven-figure service fees to determine pricing, utterly embarrassed. The position size of the OpenAI and Anthropic perpetual contracts even reached a new high. For a period of time, this native crypto exchange became the most reliable channel for obtaining real-time valuations of leading private companies globally.

At the same time, ordinary traders began to have a fundamental question: on what basis can the remaining coins on-chain continue to trade? The altcoin market had been in a continuous bear market for 18 months; project founding teams and investment institutions continually exited the market through large split trades and time-based algorithms. In contrast, $HYPE, the only token to have built a complete value capture loop, saw price increases that crushed all market targets. The industry had previously launched over a dozen token value capture mechanisms, but most failed to form a positive cycle because the projects these mechanisms were attached to had no asset value. The industry first solved the technical issue of how tokens capture value, and only then sought tangible assets worth carrying that value.

This reversed state of the industry is the underlying driving force behind the boom of private perpetual contracts. The market has never genuinely desired the perpetual contract products themselves; rather, it craves high-quality assets; as of mid-2026, the only high-quality assets that can be traded on-chain are synthetic income certificates from entities entirely unrelated to the crypto industry.

End of 2026: The AI track does not need cryptocurrency

Anthropic and OpenAI achieve technological breakthroughs, and competition in the foundational large model track becomes fiercely heated, leading the market to begin pricing for general artificial intelligence (AI) in advance. The resulting chain reaction is that all non-top foundational large model enterprises are experiencing a continuous outflow of related business funds. Capital begins to view general AI as a core asset held on a company's balance sheet rather than a standardized tool aimed at widespread industry adoption.

In such an environment, the "AI + crypto" track silently declines. It's not that this logic has been disproven; rather, the industry is too busy to argue. The x402 payment protocol officially launches, yet there are no paying users; the envisioned on-chain agent economy is unable to scale, with all existing agents settling via API in USD, indistinguishable from traditional software practices. Venture capital professionals reach a consensus: the AI industry itself does not need cryptocurrency to be supported, and investors are no longer forcefully promoting this track.

Currently, the only "AI + crypto" product that has truly achieved market fit is the prediction market. The scale of predictive trading around the performance of various foundational large models is rapidly growing; it has also become the most accurate financial tool for betting on the core variable that can influence massive funding — which company will have the optimal performing large model in the next month.

Aside from the deafening noise of trading, another low-key transformation is happening: when the CLARITY Act passed the Senate in mid-2026, most traders deemed the act irrelevant, and the market did not experience an upswing; however, by the end of the year, various asset tokenization projects accelerated in execution. Large asset management institutions transitioned from pilot phases to formal operations, discreetly avoiding publicity — the core job of compliance departments is to prevent projects from making a big splash. Tokenization targets are concentrated in mundane mid-range categories on balance sheets, such as money market funds and private credit. These assets have no KOL promoting them on social platforms and no market K-lines to speculate on.

By the end of 2026, the crypto industry has bifurcated into two almost entirely independent economic entities: one is boisterous and relies on betting on the AI track for profits; the other is silent and low-key, gradually being absorbed into the traditional financial system through compliant documents. The overwhelming majority of industry professionals focus on the former market.

Early 2027: Major public chain foundations define development routes

General-purpose public chains can no longer maintain a dual narrative that lets them navigate all terrains.

For years, major mainstream foundations have been narrating two completely disconnected narratives: publicly promoting a large-scale vision aimed at ordinary users while privately pushing compatible services to institutions during negotiations, with these two narratives never intersecting. By early 2027, the contradiction of these two development routes becomes fully apparent.

The retail track aimed at individual investors becomes highly concentrated, with the only truly demanded retail product seeing its trading volume concentrated on a few trading platforms; whereas institutional business is the only track that can currently bring in stable paying customers. Various foundations continuously refine their core development directions, opting for a highly unified approach: establishing corporate sales teams, providing compliant services, launching universal compliance development toolkits for token asset transfers and broker licensing, expanding Wall Street partnership channels, and improving privacy trading features.

The media and crypto social platforms interpret every strategic shift as a choice: prioritizing services for institutions, abandoning ordinary retail investors, opting for serious financial clients, and discarding the speculative casino attributes.

However, workers within the foundations do not agree with this interpretation; instead, teams are doubling down on laying out crypto business for ordinary users, just with a changed implementation logic. The standards for qualified investors have continued to loosen over the years, broadening the pool of qualified people. The foundational infrastructure built by the foundations will soon open up to ordinary users who have not yet been categorized as "qualified investors," something the infrastructure team is fully aware of but will not explicitly acknowledge publicly. The compliance infrastructure team only discusses banking clients, as banks are the current payers.

The low-key institutional market formed by the end of 2026 now sees unprecedented growth in ordinary compliant investors. The previously disconnected two economic entities finally establish a connecting bridge through the "qualified investor qualification verification."

Mid to late 2027: Threefold development ceiling

A new generation of tech startups reignites the private equity market: financing for AI-bio integration, physical AI, and humanoid robot tracks all sees oversubscription, and company valuations soar, but IPOs are still years away. Perpetual contract platforms launch corresponding targets within just weeks, with these revenue-sparse companies' synthetic contracts seeing unprecedented amounts. The market rules from 2026 play out again, only with larger funding volumes: the world's most sought-after quality assets are all concentrated in the primary private equity market, and the only corresponding targets that users can trade on-chain are synthetic perpetual contracts that settle funding rates every eight hours.

However, the three types of markets each hit their development limit, constraining industry growth:

Ceiling of non-public perpetual contracts: Real private equity assets grow steadily through traditional private equity channels, compounding their scale each quarter, rendering them virtually invisible on crypto social platforms that only focus on surging market conditions. Perpetual contracts are growing at a vastly inferior rate to real private equity assets, the core limitation being that private securities cannot publicly solicit investors, whereas the crypto industry's strength lies in traffic modes that attract retail investors, which cannot be legally applied to such assets. At the same time, perpetual contracts have structural shortcomings: they need upcoming IPO events as price drivers and thus can only cover later-stage mature companies; mid-stage startups in AI-bio integration and humanoid robotics that are far from exit paths cannot launch corresponding synthetic contracts. For the vast majority of primary market targets, the regulated real holding channels are not a secondary option, but the only compliant trading tool — simply that promotion is not legally permitted.

Ceiling of stablecoins: The total circulation of stablecoins continues to increase steadily, never ceasing to expand, but major institutions have quietly reduced expansion plans. The midterm elections changed the power dynamics in the congressional committees, as the candidate list for the 2028 presidential election gradually solidifies, with multiple popular candidates publicly opposing the issuance of private dollar tokens. Although the relevant legislative framework from 2025 and 2026 has not been abolished, the power to execute these laws belongs to the new government. CFOs at major banks must incorporate the risk scenarios of a stricter regulatory stance from the next government into their ten-year settlement plans. The industry will not completely halt stablecoin projects but will lengthen implementation cycles and narrow down pilot sizes, with everyone watching the results of the November 2028 elections. The speed of on-chain dollar circulation is entirely tied to policy uncertainty, which is at a high level in mid-2027.

Ceiling of asset tokenization: This conservative sentiment spreads throughout the entire institutional crypto market. Tokenization of private credit and fund share products continues to be launched, all compliant implementations, but institutions deliberately control project sizes, with no one willing to be a negative case study at the next Senate hearing.

The commonality of these three tracks is quite clear: the logic of the products themselves is sound, and market demand has been thoroughly validated, but external policy forces outside the industry severely restrict growth rates. Setting aside the dramatic fluctuations of cryptocurrencies, 2027 is actually a year of steady growth for the industry; the crypto industry, having become accustomed over the past decade to success only being attributed to linear surges in prices.

2028: Compliance admission thresholds are no longer rare

(From this point on, the accuracy of predictions decreases: previous predictions were detailed down to quarters, while after 2028, they will only be extrapolated by year, resulting in a wider margin of error. This article makes a clear core assumption: the Democratic candidate wins the November 2028 election. If the election result is the opposite, the timing of various industry events will shift, but the overall developmental framework will not change.)

The speculative casino attributes of the crypto market gradually fade, and few can accurately pinpoint the turning point. The efficiency of the market's capital harvesting mechanism is too high; each new injection of liquidity from 2026 to 2027 is less than the previous one, and capital is withdrawn faster by a few top players. The market does not experience any signature crashing event, and meme coin speculation may still occur intermittently, with daily surges evident, but after some point in the first half of 2028, speculative trading is no longer the industry’s core focus, and trading volume exists only as statistical data, no longer dominating the industry's ecological culture. Some traders turn to prediction markets that harness speculative excitement; some remain in a shrinking speculative sector; and a large number have completed the qualification certification for qualified investors within the past year, an event unforeseen in 2026.

Panic at the policy level gradually dissipates through market pricing throughout the year. Both major political party candidates accept industry donations, albeit with different wording; their core stance is unified: the crypto industry needs regulation rather than an outright ban. Practitioners who previously viewed the last round’s loose regulation as a harvesting window are being investigated in succession. The industry slowly realizes that regulatory cleansing of chaos is actually a positive signal: the government is distinguishing between speculative harvesting operations and financial infrastructures, allowing the latter to receive capital investment with confidence. Major banks’ CFOs that contracted pilot programs have quietly resumed expansion plans before the elections; by the time election results are settled, the vast majority of policy risk premiums have already been absorbed.

The most profound lesson of 2028 from the trading market everyone is focused on: at the beginning of the year at leading trading platforms, a large position capable of moving the market is concentrated in several popular non-public perpetual contracts, triggering the chain liquidation risk that the market has worried about since the Ventuals manipulation incident. Within hours, billions in open trades were cleared, systems enforced margin calls automatically, losses were shared by the market, and profits were significantly diminished. Afterwards, parties could not determine whether the fluctuations were due to malicious manipulation or purely market accidents; this ambiguity itself is the core conclusion: markets without underlying real anchor lack a fair benchmark price; even "market manipulation" cannot be defined, let alone substantiated. Listed company perpetual contracts have constraints from spot prices, but non-public perpetual contracts lack an underlying anchor. Real private equity shares do have compliant trading channels, but extensive public promotional campaigns and widespread pricing are not permitted; each perpetual contract price is merely independently estimated by the platform, allowing for substantial space for human interference. This chain liquidation is not a failure of the synthetic contract market itself, but rather an inevitable consequence of the market mechanism operating without underlying real asset support.

For the past decade, the ban on publicly soliciting investments in private securities has been packaged as an investor protection policy. However, the recent market crash proves that this rule only kept ordinary investors out of legally protected trading channels, driving everyone into high-leverage markets without price anchors of synthetic contracts. The real dividing line has never been between synthetic assets and real assets, but between whether trading rights hold legal enforceability.

Post-crash, new regulations are enacted, and rather than being called reform, it may be more appropriate to describe it as improving the underlying financial mechanisms: regulators release guidelines allowing compliant securities secondary market transfers for qualified investors verified through their credentials (limited to second-hand shares, excluding early financing rounds) to be publicly promoted, as the pool of qualified historical investors continues to expand. The logic behind this is straightforward: the synthetic contract market needs a fundamental price anchor, and the lowest-cost solution is to open up public circulation channels for real private equity assets. A promotion restriction rule in place for ninety years is greatly relaxed to enhance the derivatives market.

The enthusiasm in the first week after the new rules take effect rivals that of launching meme coins, with the sole difference being that the trading targets are equity stakes in real companies. The listing and promotion of secondary private equity shares, along with screenshot sharing and community promotions, all become legalized, marking the first time in this asset class's history. Opinions on social platforms are polarized: half of industry practitioners see it as a new foundational financial tool, while the other half worry that retail investors will merely become exit buyouts for venture capital firms. The latter’s intuition may be correct, but their judgment is lagging behind the times: when assets are mere air tokens without tangible backing, such concerns are valid; however, today’s trading targets are the income rights of real companies that the perpetual contract market has proven the market craves over the past two years.

Funds quickly pour into mature companies verified by the previously successful perpetual contracts; further funds flow toward mid-stage startups in the real stockholding sector that cannot be addressed by perpetual contracts, as these startups do not involve capital rates and have no IPO timing constraints. Although perpetual contracts have not disappeared, they transition into a supplementary sector for late-stage company trading, no longer commanding all core market traffic.

By December, the industry enters a new bull market, supported by the oldest basic financial targets, now finally obtaining legal channels for circulation.

2029: The market becomes the only core mainline of the industry

This new bull market's first year exhibits completely different trends compared to previous crypto bull markets, and this difference is the core value. The targets of sustained price increases are all tech companies that are grounded in real operations and can create social value. The new foundational asset category for ordinary users to trade is private equity stakes in companies: biotech firms that have completed multiple rounds of clinical trials, humanoid robot manufacturers that have demonstrated physical prototypes, and AI laboratories that everyone has traded perpetual contracts for in 2026 can now have users directly hold real company shares.

Over ten years of gradually loosening the qualified investor threshold has fostered a new retail investor community. Assets that only institutional investors could participate in five years ago can now be traded by ordinary compliant investors, and the vast majority do not even categorize these trades as "cryptocurrency investments."

The token track splits entirely along the core issues raised at the beginning of this article: public chains successfully transforming into issuance and settlement infrastructures capture real business cash flow, with platform tokens equating to revenue certificates. All other tokens will face brutal market rules: tokens lacking legally enforceable revenue rights and a complete value capture loop will not simply see a prolonged decrease like in 2026 but will completely lose trading liquidity. The discussions around token value capture mechanisms that plagued the industry in 2026 did not have any single solution emerge as a winner; the circulation of private equity assets simply renders this debate pointless.

Stablecoins maintain their development trend throughout the cycle: steady compound growth with no explosive upticks. By the end of 2029, the total circulation is approximately double that of mid-2027, with an annual stable growth rate of about 20%. The growth ceiling is not due to insufficient market demand, but rather a policy choice reached by both parties: the moderate development of private dollar tokens meets practical needs while also averting competition with the sovereign monetary system. The speed of on-chain dollar circulation is linked to monetary policy certainty, as 2029 sees a stable policy environment that is sustainable in the long term.

The speculative sector still exists, shrinking to fixed sub-sectors, occasionally experiencing short-term speculative excitement. However, its overall influence is equivalent to a niche within the entertainment industry. Speculative traders divert to prediction markets, new private equity secondary markets, and a path that no one anticipated in 2026: obtaining qualified investor credentials.

The third core question posed at the beginning of this article — how does cryptocurrency transition into traditional financial infrastructure — ultimately receives a silent response: this question will lose all discussion relevance. The functions of clearing and settlement are supported by customized payment channels, public chains, or a hybrid of both; only the operations team can clarify the underlying architectural details, and ordinary participants neither understand nor care, just as the average person does not delve into the clearing institutions behind brokerages. The industry-wide integration slowly initiated at the end of 2026 ultimately lands through "complete invisibility." The ultimate victory of financial infrastructure is to become mundane, drawing no attention. What remains in public view is the core product that the crypto industry has been building after enduring numerous speculative cycles — the asset trading market.

Thus, all three core questions have been answered through this simulation logic:

• What determines the value of tokens? The unchanging core: legally enforceable rights to demand revenue from real assets; the market has now eliminated all tokens that do not meet this condition.
• How do cutting-edge technologies land on the blockchain? By relying on the primary and secondary private equity markets: tech companies do not need tokens, only trading circulation channels; when these channels gain legal and public promotional rights, cutting-edge enterprises naturally secure on-chain trading.
• What will happen when cryptocurrencies become the underlying infrastructure of traditional finance? No hallmark events will occur; the underlying functions will become fully abstracted, and the public will no longer discuss this proposition separately.

Some of the inferences within this text will inevitably contain deviations, as stated at the outset. The whole set of simulation logic has one core verification standard: if by the end of 2028, ordinary investors still do not have access to legal channels for private equity, and all funds continue to rely on offshore synthetic perpetual contracts and packaged products for circulation, then the central argument of this article that "the industry bottleneck lies in law rather than technology" does not hold, and the credibility of the entire simulation needs to be significantly reduced.

Just keep your eyes on this one core variable and verify the remaining judgments completely by 2029. I would rather provide a clear, falsifiable prediction than state vague platitudes that will never be wrong.