Tiger Research: Realism is the Only Answer During Cryptocurrency Downturn

This report is authored by Tiger Research, as the cryptocurrency market continues to experience a prolonged downturn. In this environment, the projects that can survive are those that demonstrate pragmatic and realistic visions.

Key Points

• Projects that address real, concrete problems remain resilient even during market downturns.
• Hyperliquid, Canton, and Kite target different problem areas, but they share a common trait: providing practical and realistic solutions rather than abstract narratives.
• To assess this realism, analysis should focus on three factors: the problems the projects aim to solve, the structure of their solutions, and the teams’ execution capabilities in practice.

1. Survival Conditions in a Bear Market: Does It Work in Practice?

Source: Tiger Research

Bitcoin has fallen below $70,000. Among the top 100 cryptocurrencies by market cap, only 7 remain above the 200-day moving average. In contrast, 53 components of the Nasdaq 100 index are still trading above that threshold.

Market conditions are unstoppable. Nevertheless, some crypto assets continue to survive in the harshest environments.

Their resilience cannot be simply attributed to market-making or偶然的反弹. A closer look at their development trajectories reveals different explanations.

These projects no longer rely solely on vague visions or technical complexity. Instead, they share a common feature: solving core market issues with solutions rooted in real-world practicality. Their approaches generally align with three directions:

1. Do they address the current problems faced by the market?
2. Are they prepared for near-term practical applications?
3. Are they building infrastructure that the industry can rely on long-term?

Ultimately, the ability to solve real problems in practice remains the strongest fundamental.

2. Three Directions of Market Selection

Projects that can answer the above questions have successfully survived. Their approach is: 1) clearly identify market problems; 2) propose practical solutions aligned with specific timing.

2.1. Hyperliquid: Solving Instant Trading Frictions

Centralized exchanges have traditionally been viewed as responsible intermediaries. However, in practice, when issues arise, they often fail to align with investor interests. Decentralized exchanges (perp DEXs) emerged as alternatives, but poor user experience and performance have driven many investors away.

Against this backdrop, Hyperliquid introduces the concept of a perpetual contract decentralized exchange (perp DEX). It uses the HLP mechanism to bring on-chain functionalities valued in centralized exchanges—such as high leverage, fast execution, and stable liquidity.

Early usage was partly driven by demand for airdrops of $HYPE tokens. However, ongoing engagement after the airdrop reflects user satisfaction with the platform’s performance.

Ultimately, Hyperliquid’s resilience stems from addressing a persistent real-world issue: dissatisfaction with centralized exchanges.

2.2. Canton Network: Preparing for the Institutional Finance Era

Canton offers a solution aimed at the near future. As interest in real-world assets (RWA) continues to grow, institutions are beginning to view blockchain as a financial infrastructure rather than a public network. In this context, what institutions need is not complete data transparency but a selective privacy model that supports regulatory compliance and confidentiality.

Canton Network was created in response. Using DAML, Canton can provide configurable data disclosures for each participant.

This enables institutions to share information only within necessary boundaries while maintaining transaction confidentiality. Canton is not a provider-imposed design but an infrastructure built to meet institutional needs.

Another key factor is that Canton has been focused on real deployments from the start to expand its ecosystem, supported by early collaborations with financial institutions.

Most notably, its partnership with DTCC creates a pathway for traditional financial assets to extend into Canton-based environments. DTCC processes approximately $3.7 trillion in transactions annually, demonstrating the practical feasibility of the Canton Network approach.

Ultimately, Canton Network offers a structural solution designed to meet three institutional requirements simultaneously: privacy protection, regulatory compliance, and integration with existing financial systems.

2.3. Kite AI: Building the AI Economy of the Future

Unlike the previous two examples, Kite AI currently has limited practical applications. However, from the perspective of AI agents operating as economic entities, its structural logic remains compelling.

In Web2 and Web3, there is broad consensus on a future driven by autonomous agents. Few question scenarios where AI agents handle tasks like booking hotels or purchasing daily necessities on behalf of users.

However, such a future requires infrastructure that allows AI agents to initiate and execute payments independently. Existing transaction systems are designed around person-to-person transfers and human participation efficiency.

Therefore, enabling AI agents to operate as autonomous economic entities requires new mechanisms, including identity verification and automated payment frameworks.

Kite AI is building payment infrastructure for this environment. Its core components include “agent passports” for identity verification and the x402 protocol functions for automated payments.

Kite AI’s vision is currently not deployable at scale, simply because the future it targets has not yet arrived.

Nonetheless, the project’s realism is based on a broader premise: when this widely anticipated future arrives, the underlying technologies it is developing will be essential. This alignment with a broadly accepted developmental trajectory gives the project, despite limited current use, structural credibility.

3. Three Key Questions for Assessing Practical Feasibility

Although these three projects have different timelines, they share a common trait: real-world feasibility.

Evaluating the same project can often lead to differing opinions. Some believe it addresses genuine problems, while others see it as overhyped. To narrow this interpretive gap, at least three core questions must be addressed:

Source: Tiger Research

1. What problem does it solve? Is the problem targeted by the project real and market-demanding?
2. How does it solve? Is the proposed solution structurally reasonable and feasible?
3. Who is executing? Does the team have the capability and resources to turn the vision into reality?

Since most projects promote optimistic future narratives, answering these questions correctly requires time and effort. Filtering misleading or incomplete information is not easy. Projects that cannot confidently answer these questions may experience short-term price increases but are likely to fade away when the next downturn hits.

The current state of the crypto market is clearly unfavorable. But that doesn’t mean everything is over. New experiments will continue, and the task is to evaluate what these efforts truly represent.

What’s most important now is realism.