When a crypto project runs out of supply, what can traders still trade?

Author: Mandy, Azuma

Original Title: One Year Later, What Can Be Traded in the Crypto Market?

This weekend, under internal and external pressures, the crypto market was once again bloodied. BTC is currently hesitating around the Strategy holding cost price of $76,000, while altcoins are even more eager to gouge out their eyes at the slightest price movement.

Behind this current downturn, after recent conversations with projects, funds, and exchanges, a question repeatedly surfaced in my mind: What exactly is the crypto market trading after a year?

And the more fundamental question behind it is: if the primary market no longer produces the “future of the secondary,” then what is the secondary market trading after a year? What changes will exchanges undergo?

Although the idea that altcoins are dead has long been old news, the past year shows that the market is not short of projects. Every day, projects queue up for TGE. As media, it’s quite intuitive—we still frequently coordinate with project teams for marketing and promotion.

(Note: In this context, when we say “projects,” we mostly refer to the “project parties” in a narrow sense—simply put, projects that are comparable to Ethereum and its ecosystem—underlying infrastructure and various decentralized applications, and are “token issuance projects.” This is also the foundational element of what our industry calls native innovation and entrepreneurship. So, platforms emerging from Meme and other traditional industries venturing into crypto are temporarily set aside.)

If we look back a bit on the timeline, we’ll find a fact we all tend to avoid: these upcoming TGE projects are “existing old projects.” Most of them raised funds 1–3 years ago and are only now reaching the token issuance stage. Under internal and external pressures, they have no choice but to proceed with token issuance.

This seems like a form of “industry inventory clearance,” or more bluntly, queuing to complete their lifecycle—issuing tokens to give the team and investors an explanation, then lying flat and waiting for death, or spending the remaining funds in hopes of a miracle.

Primary Market Is Dead

For us veterans who entered the industry during the 1CO era or even earlier, having experienced several bull-bear cycles and witnessed the industry’s dividends empowering countless individuals, subconsciously, we always think: as long as time passes, new cycles, new projects, new narratives, and new TGE will emerge.

But the reality is, we are far from the comfort zone.

Looking at the data, within the recent four-year cycle (2022-2025), excluding mergers, IPOs, public fundraising, and other special primary market activities, the number of crypto industry financing deals has shown a clear decline (1639 ➡️ 1071 ➡️ 1050➡️ 829).

The reality is even uglier than the data suggests. Changes in the primary market are not only about shrinking total amounts but also structural collapse.

Over the past four years, early-stage funding rounds (including angel, pre-seed, and seed rounds), which represent fresh blood for the industry, have seen a significant decline (825 ➡️ 298, a 63.9% drop). The decline is even more pronounced compared to the overall (a 49.4% decrease). The primary market’s ability to supply new projects is continuously shrinking.

A few sectors with increasing deal counts include financial services, exchanges, asset management, payments, AI applications, and other crypto technologies. However, these are less relevant to us—most of these projects won’t “issue tokens.” In contrast, native “projects” like Layer 1, Layer 2, DeFi, and social platforms show a more significant downward trend in funding.

Odaily note: Chart source from Crypto Fundraising

A misleading data point is that while the number of deals has sharply decreased, the average deal size has increased. The main reason is that large projects, as mentioned earlier, have attracted substantial funds from traditional finance, greatly raising the average; additionally, mainstream VCs tend to bet on a few “super projects,” such as Polymarket’s multiple rounds of billion-dollar funding.

From the perspective of crypto capital, this lopsided vicious cycle is even more evident.

Recently, a friend outside the industry asked me about a well-known veteran crypto fund raising capital. After reviewing their deck, he was puzzled and asked why their returns are “so poor.” The data from the deck, which I won’t name the fund, is shown below, covering their performance from 2014 to 2022.

It’s clear that between 2017 and 2022, the IRR and DPI at the fund level experienced significant changes—the former reflects the fund’s annualized return, more about “book gains,” while the latter indicates the cash return multiple actually returned to LPs.

Looking at different vintage years, this set of funds shows a very clear “cycle break”: funds established between 2014–2017 (Fund I, Fund II, Fund III, Fund IV) performed significantly better overall, with TVPI generally between 6x–40x, and Net IRR maintained at 38%–56%. They also have high DPI, indicating these funds not only had high book gains but also completed large-scale realizations, capturing the early infrastructure and top protocol boom from 0 to 1.

Funds established after 2020 (Fund V, Fund VI, and the 2022 Opportunity Fund) are noticeably lower-tier, with TVPI mostly between 1.0x–2.0x, and DPI close to zero or very low, meaning most returns are still on paper and have not been realized. This reflects that, amid rising valuations, intensified competition, and declining project quality, the primary market can no longer replicate the past excess returns driven by “new narratives + new asset supply.”

The real story behind the data is that after the DeFi Summer craze in 2019, the valuations of native crypto protocols in the primary market were inflated. When these projects issued tokens two years later, they faced narrative fatigue, industry tightening, and exchanges temporarily changing terms to control the flow—generally performing poorly, with some even experiencing market cap inversion, making investors the weaker party and exit difficult for funds.

However, these cyclically mismatched funds can still create illusions of prosperity in certain sectors until recent large star funds’ fundraising reveals the harsh reality.

The fund I cited manages nearly $3 billion, which also serves as a mirror to observe industry cycles—whether it’s doing well or not is no longer just about project selection; the trend has already shifted.

Although veteran funds are now struggling to raise capital, they can still survive, lie flat, collect management fees, or pivot to AI investments. Many others have already shut down or shifted to secondary markets.

For example, in the Chinese market, who remembers the “Ethereum Milk King” Yi Lihua, once a leading figure in primary markets with over a hundred projects annually?

Altcoin Alternatives Have Never Been Meme

When we say native crypto projects are exhausted, a counterexample is the explosion of Meme.

In the past two years, a recurring saying in the industry has been: “Meme is the alternative to altcoins.”

But looking back now, this conclusion has been proven wrong.

In the early Meme wave, we played Meme by “mainstream altcoin imitation”—filtering projects based on fundamentals, community quality, and narrative coherence, trying to find those capable of long-term survival, continuous renewal, and ultimately growing into Doge or even “the next Bitcoin.”

Today, if someone still tells you “hold Meme,” you’d think they’re crazy.

Current Meme is an immediate heat monetization mechanism: a game of attention and liquidity, a product of Devs and AI tools mass-producing assets.

It has a very short lifecycle but a continuous supply.

It’s no longer about “survival,” but about being seen, traded, and utilized.

Our team also has several long-term profitable Meme traders. Clearly, they focus not on project future prospects but on rhythm, diffusion speed, emotional structure, and liquidity pathways.

Some say Meme can’t be played anymore, but in my view, after Trump’s “final cut,” Meme has truly matured as a new asset form.

Meme is not a substitute for “long-term assets,” but a return to the game of attention finance and liquidity. It has become more pure, more brutal, and less suitable for most ordinary traders.

Seeking External Solutions

Asset Tokenization

As Meme moves toward professionalism, Bitcoin toward institutionalization, altcoins fade, and new projects are about to plateau, what can ordinary traders who love value research, comparative analysis, and speculative judgment—yet not pure high-frequency gambling—do for sustainable development?

This question is not only for retail investors.

It also concerns exchanges, market makers, and platforms—after all, the market cannot always rely on higher leverage and more aggressive derivatives to maintain activity.

In fact, as the entire logic begins to overturn, the industry has already started seeking external solutions.

The direction we’re discussing is re-packaging traditional financial assets into tradable on-chain assets.

Tokenized stocks, precious metals, and other assets are becoming key areas for exchange layouts. From centralized exchanges to decentralized platforms like Hyperliquid, all see this as a breakthrough. The market has responded positively—during the most volatile days last week, Hyperliquid’s daily silver trading volume once exceeded $1 billion, with assets like tokens, stocks, indices, and precious metals accounting for half of the top ten trading volumes, boosting HYPE’s short-term surge of 50% under the “all-asset trading” narrative.

Admittedly, some slogans like “providing new options for traditional investors, low barriers” are still premature and unrealistic.

But from a native crypto perspective, it might solve internal issues: the supply and narrative of native assets are slowing down. After old coins fade and new coins dry up, what new trading reasons can crypto exchanges offer the market?

Tokenized assets are easy for us to grasp. Previously, we studied: public chain ecosystems, protocol revenues, token models, unlocking rhythms, and narrative spaces.

Now, the focus shifts to: macro data, financial reports, interest rate expectations, industry cycles, and policy variables. Of course, many of these areas we’ve already begun researching.

Essentially, this is a migration of speculative logic, not just a category expansion.

Launching gold and silver tokens is not just adding a few more coins; it’s about introducing new trading narratives—bringing the volatility and rhythms traditionally belonging to the financial markets into the crypto trading system.

Prediction Markets

Besides bringing “external assets” on-chain, another direction is introducing “external uncertainties” into the chain—prediction markets.

According to Dune data, despite last weekend’s crypto plunge, prediction market trading remained active, reaching a record high of 26.39 million trades in a week. The top trader, Polymarket, had 13.34 million trades, followed by Kalshi with 11.88 million.

We won’t elaborate on the development prospects and scale expectations of prediction markets here. Odaily has been publishing more than two articles daily analyzing and forecasting this sector… feel free to search for them.

From a crypto user’s perspective, why do we play prediction markets? Are we just gamblers?

Of course.

In fact, for a long time, the essence of altcoin traders was not about betting on technology but on events: whether a coin launches, whether there’s an official partnership announcement, whether a token will be issued, whether new features will go live, whether there are regulatory benefits, or whether they can ride the next narrative wave.

Price is just the outcome; events are the starting point.

Prediction markets, for the first time, break down this “implicit variable in the price curve” into a directly tradable object.

You no longer need to buy a token to indirectly bet on whether a result will happen; you can directly bet on “whether it will happen.”

More importantly, prediction markets are well-suited to the current environment of “project supply shortages and narrative scarcity.”

As tradable new assets become fewer, market attention shifts more to macro, regulation, politics, big figures’ actions, and major industry milestones.

In other words, the tradable “targets” are decreasing, but the tradable “events” are not only remaining but increasing.

This is why, in the past two years, almost all liquidity in prediction markets has come from non-native crypto events.

It essentially introduces external world uncertainties into the crypto trading system. From a trading experience perspective, it’s more friendly to traditional crypto traders:

The core question is simplified to—will this result happen? And is the current probability worth it?

Unlike Meme, the threshold for prediction markets isn’t execution speed but information judgment and structural understanding.

Thinking about it this way, maybe I can give it a try too.

Conclusion

Perhaps the so-called crypto circle will eventually disappear in the near future, but before that, we are still trying to tinker. When “new coin-driven trading” gradually phases out, the market will always need a new, low-participation barrier, narrative-driven, sustainable speculative vehicle.

Or, in other words, the market won’t disappear; it will just migrate. When the primary no longer produces the future, what can the secondary truly trade? These two things—external uncertainties and re-constructible trading narratives.

Maybe all we can do is adapt in advance to another shift in the speculative paradigm.