Written in Singapore on Dec 29, 2025
tl;dr
1.10/10 as the End of Crypto’s First Growth Curve, and 2025 as the Conclusion of the Previous Kondratiev Cycle
2.The Exhaustion of TradFi’s Inertial Aesthetic, and the Systemic Failure Under Data-Driven Heavy Regulation
3.The Structural Issues Behind the Revival of RWA as a Mainstream Narrative in 2025
4.Emerging Economies and the Shifting Landscape of Global Geopolitics
5.DeFi 2.0, DAT 2.0, and Tokenomics 2.0
6.A Review of 2025 and an Outlook for 2026
1. 10/10 as the End of Crypto’s First Growth Curve, and 2025 as the Conclusion of the Previous Kondratiev Cycle
In my January article“The Second Growth Curve of Crypto”, we discussed the inherent unsustainability of the crypto market’s past reliance on speculation and narrative-driven momentum. Looking back over the full year, the outcome is now clear: of the seven giants once seated at the table, only the player in seat No.1 remains, fighting alone and carving out a new path. Nearly all other participants from the old market have exited altogether or shifted course, grounding themselves and beginning the transition toward a second growth curve.
The 10/10 event triggered the largest single-day liquidation in crypto history, with $19.3 billion wiped out in one day, followed by several days of cascading liquidations totaling roughly $40 billion.On the surface, this appeared to be the concentrated unwinding of extreme leverage structures typical of the late speculative phase of the first growth curve, amplified by a low-liquidity environment. At a deeper level, however, it reflected a more fundamental failure: a zero-sum market with too few remaining players, where platforms lost the ability to manage risk, smooth volatility, or control client losses.When only two players remain at the table, all cooperative strategies collapse. Counterparty fragility becomes inevitable—and with it, the end of the first growth curve.
At major cycle inflection points, both economic policy tools and short-term conventional wisdom lose their effectiveness. The true obstacle to economic progress is not the absence of viable growth paths, butthe inertia of monopolistic production relations from the prior cycle, which obstruct—or outright fail to support—the fair and efficient integration of new productive forces and labour structures. Applied to the present moment, the advancement of AI is inevitable; what is unsustainable is aglobal governance framework still rooted in semi-feudal, semi-monopolistic capitalism, which is no longer capable of adapting to or supporting the next phase of development(Note 7).
2. The Exhaustion of TradFi’s Inertial Aesthetic, and the Systemic Failure Under Data-Driven Heavy Regulation
Even so, one outcome that has genuinely exceeded my expectations is that still many economists and industry experts remain fixated on interest-rate cuts as the core variable of analysis. From Feb 2020, prior to the pandemic, to Apr 2022, at the peak of monetary expansion, U.S. M2 increased by more than 40% cumulatively. Against such an enormous monetary base, subsequent rounds of QT or QE are, in my view, largely symbolic — a form of emotional reassurance rather than a meaningful economic adjustment. Whether 25bp or 100bp, interest rates have long since lost their original value and marginal power(Note 8).
In the current environment,rate cuts have become the perfect convergence of sentiment-driven expectations from market participants and coerced policy decisions by authorities. Put plainly, this is a two-sided form of psychological inertia — a mutual hostage-taking between markets and policymakers — where emotional value substitutes for structural solutions. To be fair, governments around the world have made their utmost efforts to delay a full descent into systemic disorder and global confrontation by exhausting every remaining tool rooted in legacy financial aesthetics.
Yet the process of entropy cannot be slowed by such measures. Revisiting a Greenspan warning I quoted in an earlier piece —“We must accept that monetary and fiscal policy cannot permanently boost economic growth in the presence of deeply rooted structural constraints.”— it becomes increasingly evident that a large portion of traditional policy instruments have already lost their effectiveness within the existing system.
By mid-Dec 2025, Nasdaq publicly stated its intention to submit a proposal to the SEC to extend equity trading hours to a 24/7 model. In substance, this move reflects a defensive response by traditional finance under mounting structural pressure—both a counter-push toward crypto and onchain markets, and a simultaneous attempt to test regulatory boundaries. In fact, since the introduction of theGenius Act, many traditional financial institutions across North America and East Asia have been continuously recalibrating their posture. They haveoscillated between two competing imperatives: confronting the disruptive challenge posed by Crypto Finance head-on, with all the risks that entails, or preserving existing regulatory moats and legacy advantages for as long as possible.
What is particularly interesting is how this tension evolved over the year:
In Q2, institutional reactions were intense. The Genius Act appeared to abruptly shatter the prior equilibrium(Note 9)—undermining cartel-like defensive alliances and long-standing moats. A widespread sense of urgency emerged, as many recognized that the transformation of traditional finance was no longer avoidable.
By Q3, however, sentiment shifted again. Market participants began to realize that the pace of transformation would not be as immediate or as violent as initially feared. Traditional financial institutions and policymakers, almost paradoxically, arrived at a short-term counter-equilibrium. The prevailing logic became: change is inevitable, but regulatory compliance can serve as the stabilizing anchor—so long as licensed institutions and regulators upgrade in tandem, the transition can be managed without catastrophic disruption.This Q3 phase was especially subtle. In effect, the entire system entered a large-scale prisoner’s dilemma, where participants collectively and temporarily reversed their individual strategies to withstand external pressure. Yet this equilibrium was ultimately psychological rather than structural—a temporary illusion preceding the genuine dissolution of the cartel framework.
By Q4, the most forward-looking players had already recognized that, through divergent paths taken by actors such as Hyperliquid and Robinhood, the disintegration of traditional financial cartels was inevitable and approaching rapidly. This is precisely why both Nasdaq and Coinbase began to speak more candidly—choosing to confront tangible, execution-level reforms such as extended trading hours and the construction of native RWA tokenization infrastructures, in order to secure authentic strategic advantages for themselves in the next phase.
Viewed in retrospect, this entire progression follows a classic pattern. Ahead of a major transformation, all participants collectively construct a Gartner Curve–like psychological sandbox and play out their strategic interactions within it.
The exhaustion of traditional finance’s inertia-driven aesthetic does not imply a failure of economic principles themselves. On the contrary, the Crypto Economy and Open Finance represent a further evolution grounded precisely in economics. The real blockage lies in the systemic failure of the production-relationship mechanisms used to manage markets and economies. After fully entering the digital era, legacy governance systems have proven fundamentally incapable of balancing regulation and freedom.
Globally, policymakers have fallen into a major misconception: the misuse of digital over-regulation, which has significantly accelerated entropy over the past decade.
Over the last ten years, nearly every region has—sooner or later—slid into the same trap:“if data exists, it must be used; if methods exist, they must be regulated.”Under outdated systems, rule-compliance costs and access thresholds now far exceed opportunity and risk costs. Rigid data governance has turned path dependence into dogma—one that not only cannot be broken, but must be paid for at increasing economic and social cost. This has created a disturbing phenomenon that can be described as a“Digital Middle Ages Effect”.
This condition has permeated every layer of society and nearly all industries worldwide. Excessive digital misuse and financial constraints have become structural obstacles to growth across sectors. To give a simple example from my more than 15 years in venture capital: if one were to judge a person’s eligibility for financing purely through rigid bank KYC criteria, 99% of enterprises and innovations in this world would never exist.
As entropy continues to undermine the global financial system and broader social governance frameworks, 2026 is almost certain to usher in a deeper phase of disorder and restructuring. A large number of rules and entire industries will be rewritten, and it is equally unavoidable that the world will enter a prolonged transitional period of chaos—likely lasting at least a decade.
3. The Structural Issues Behind the Revival of RWA as a Mainstream Narrative in 2025
The RWA narrative staged a strong comeback in 2025, for a very simple reason: the collapse of credibility in the first growth curve, combined with the absence of a new, widely accepted concept for the second growth curve. As a result, RWA stepped in as a temporary substitute and effectively became this year’s MVP.
Two months ago, during a conversation with a long-time industry OG friend in Silicon Valley, he suggested that—upon hearing that Cicada Finance was preparing to announce its go-to-public plan—I should position the project squarely within RWA Finance. I took his advice, while deliberately retaining Onchain Asset Management as the core foundation. This led to the current framing:Onchain Asset Management for RWA Finance. There is no doubt that both Onchain Asset Management and RWA Finance will remain structurally strong, mainstream tracks throughout 2026.
Beyond the label itself, RWA is not experiencing a revival, but it is being built from the ground up. The challenge lies in the fact that interpretations of “RWA” vary widely among those who use the term.As of 2H25, in most regions around the world, RWA is still commonly understood as no more than a form of asset tokenization used for crowdfunding fundraising activities.
Most participants entering the RWA space are not driven by industry building, but by their own immediate needs—which is understandable. However, as seen previously with P2P finance and crowdfunding during the e-commerce era, demand-driven markets tend to push platforms, distribution channels, and even the market itself into one-sided outcomes, ultimately steering the entire industry in the wrong direction.
What is the difference between RWA without fair value and equity crowdfunding of the past? Do RWA assets without liquidity truly need tokenization at all? Conversely, do all RWA assets genuinely require liquidity? For the market as a whole, these questions clearly had not been fully thought through or reached consensus in 2025. Some deeper, commercially sensitive issues also remain difficult to discuss openly at this stage.
Current RWA asset distribution data is analysed in detail in the Coinbase report.U.S. Treasuries, commodities, liquid funds, and credit loans remain the four dominant categories, underscoring the importance of quantifiable financial assets within the RWA landscape. In our view, the RWA structure will shift meaningfully in 2026. While these asset classes will continue to exist, real economic activity from emerging and developing markets—driven by DeFi and Crypto Finance—will be consolidated into the RWA market as new sources of asset supply. Among them, stablecoin payments and SupplyChainFi are likely to become the fastest-growing directions.
4. Emerging Economies and the Shifting Landscape of Global Geopolitics
5. DeFi2.0, DAT2.0, Tokenomics2.0
6. A Review of 2025 and an Outlook for 2026
As 2025 comes to a close, we look back and review the analyses and forecasts made throughout the year.
February —The Second Growth Curve of Crypto
“Zero-Sum Game and the 7 Giants at the Table”, “The Trend of RYA/RWA and the Rise of PayFi”, “Crossing the Chasm: The Second Growth Curve of Crypto”, “The Crypto Development Landscape and National Scenarios Under Compliance Challenges”;
April—Trump’s Tariffs — Kondratiev’s Transition, Bitcoin’s Transformation
“The Triple-Kill of Bonds, Equities, and Currencies, and the Breakdown of the Merrill Clock”, “The Thucydides Trap and the Final Phases of Five Kondratiev Cycles in History”, “Greenspan’s Prophecy and the Role of Crypto at the Crossover Point of Kondratiev Cycles”, “The Reversal of Bitcoin’s Correlation with Global Chaos and the Shift in Cognitive Inertia”;
May—The GENIUS Act and On-chain Shadow Money
“The fundamental reasons behind the weakening control of the U.S. dollar”, “The nominal versus substantive objectives of the GENIUS Act”, “Insights from DeFi restaking for the fiat world and the monetary multiplier effect of shadow money”, “Gold, the U.S. dollar, and crypto stablecoins”;
September—The Asset Tokenization Trend Based on Stablecoins
“The essence of the Genius Act is to delegate the power of currency issuance and settlement, thereby strengthening the pricing power of the currency”, “Stablecoins, by changing the form of monetary pricing, have triggered global reforms in financial tokenization and asset tokenization”, “The reform is rapidly dismantling the long-standingCartel Alliancesin traditional finance, creating opportunities for interest realignment amid chaos”, “The Two Directions of Crypto–Equity Linkage: Securitization and Tokenization, and Their Market Characteristics”, “The market characteristics and problems of stablecoins, DAT, stock tokenization, RWA, and on-chain asset management”.
Looking ahead to 2026, this article has already addressed many aspects of the outlook. With the exception of Question i), the other issues have been analysed with sufficient clarity. The further disorder and restructuring of the macro environment—and the resulting acceleration of DeFi 2.0—are both clear trends and, in many respects, inevitable.
Question i), however, remains genuinely challenging. Whether in socio-economic systems or financial markets, direction and trajectory are always easier to identify than precise timing and magnitude. Unlike the transition period two Kondratiev Cycles earlier, the similarities in paradigm mask three major differences today:
a) The speed from information transmission to structural evolution is dramatically faster, with differences of roughly 2.5-5x across multiple dimensions(Note 12);
b) The spillover potential of global geopolitical conflicts is fundamentally different, making the likelihood of escalation materially higher;
c) The nonlinear effects introduced by AI and Crypto far exceed those seen during the era of industrial electrification and automation.
At the same time, many elements remain largely unchanged relative to a century ago. The fundamental “hardware” of social governance has not evolved significantly; human lifespans, the capacity of a generation to absorb long- and short-cycle emotional swings, and the political-economic management cycles across different social systems all remain broadly similar.
Against this backdrop, in recent years of managing companies, I have frequently discussed—and gradually come to accept—a core reality with my co-founder: nonlinear dynamics must be taken seriously. The ability to anticipate, respond to, and internalize nonlinear triggers is no longer optional. Non-linear shocks must be treated not as anomalies, but as an integral component of strategic planning itself.
Author: Gary Yang
Date: December 29, 2025
