Author: Chris Dixon , Ali Yahya, Guy Wuollet, Eddy Lazzarin
Compiled by: ChainCatcher
Cryptocurrency cycles often follow certain patterns
Speculative waves bring attention and capital. Some of it is wasted, while the rest funds infrastructure that would never have been built. When the hype dies down, what remains often seems more useful than at the peak and more enduring than at the trough.
If you can look beyond price, you'll see this in every cycle: what has actually been built, and what people are still using after the hype dies down. We're currently in such a relatively calm period. And the signals coming through are among the most encouraging in recent years.
The clearest evidence comes from stablecoins
Trading volumes fluctuate with market ups and downs, but stablecoin usage continues to climb even during downturns. People use them for savings, cross-border remittances, and payments, a process that often exposes the sluggishness, high costs, and unreliability of traditional alternatives. The growth of stablecoins looks less like speculation and more like network adoption: the compound growth in usage is due to the technology's inherent usefulness, rather than people's expectations regarding price movements.
Blockchain has also proven its value in the capital market.
Since the last cycle, we have witnessed significant growth in perpetual futures for price discovery, the role of prediction markets in revealing the truth, and the development of on-chain lending in the stablecoin credit market. Traditional assets are beginning to move onto the blockchain, and on-chain finance is also being applied to assets beyond network tokens. A new financial system is taking shape—one that can operate continuously, settle almost instantly, has near-zero costs, and is open to anyone with internet access.
The regulatory landscape is also moving in a positive direction . The GENIUS Act is a prime example of prudent policy: clear definitions, strong safeguards, and room for builders to operate. We expect other areas of the crypto market to see further regulatory progress through legislation and rulemaking. This will provide protection for consumers, certainty for builders, and pathways for mainstream institutions to participate.
It's worth taking a step back and thinking: why is this especially important right now?
Software is becoming increasingly complex and increasingly difficult to trust. Artificial intelligence systems are powerful, yet largely opaque. The infrastructure upon which the internet relies is more centralized than ever before. In this context, the properties that encrypted networks are designed to provide are becoming increasingly important, not secondary:
- Transparent and verifiable system
- A network that has been global from day one
- An economic model that aligns the interests of users, creators, developers, and operators.
- Infrastructure that does not rely on a few intermediaries
These attributes are being reflected in real-world products: in payments, financial services, creator platforms, decentralized infrastructure, and new models of human-machine collaboration. Most of these are being built by startups and are increasingly being adopted by financial institutions, technology companies, and other organizations to provide faster, cheaper, and more reliable services.
On a practical level, this means instant global remittances, eliminating the need for banks to hold US dollars, tokenizing assets for frictionless transfer, access to composable networks that can be built by others, and embedding these capabilities into various applications. It also includes some previously impossible new models: users can directly own their assets and identities, holding inviolable digital property rights; clusters of software agents can make decisions, execute operations, and complete transactions on behalf of users, access computing power, data, and services on demand, and increasingly autonomous networks can self-finance, govern, and evolve through code.
That's why we're announcing the launch of the new Crypto Fund 5. This $2.2 billion fund was created for this moment. Through this fund, we support founders who are investing in the less-noticed parts of the cycle, but which we believe will generate more long-term value: transforming new infrastructure into products that people use every day.
Every important computing platform ultimately becomes meaningful in this way; encryption technology will be no exception.
