The three power shifts in the crypto market by 2025: the restructuring of KOLs, liquidity, and regulation

Summary

By 2025, the crypto market has undergone three fundamental shifts in power. KOLs have evolved from information disseminators to market “judgment nodes,” with influence surpassing traditional financial media; market liquidity has experienced unprecedented structural divergence under the pressures of institutional capital closed loops, VC unlock waves, and retail polarization; global regulation (especially US legislation) is not about restriction but systematically integrating crypto assets into the traditional financial system, rewriting pricing logic. Looking ahead to 2026, the market will enter a new era where “structural bull markets” and “deep value revaluation” coexist. Ordinary participants need to shift from “broadly casting nets for trends” to “precise deep research,” building survival strategies that can withstand volatility.

Part One: The Power Shift in the KOL Ecosystem

Phenomenon: Multidimensional Evidence of Influence Surpassing Traditional Media

In 2025, top crypto KOLs’ influence in key scenarios has already exceeded that of traditional financial media. This surpassing manifests in three core dimensions.

Speed Dimension: From Reporting Facts to Pre-judging Prices

Traditional media workflows are lengthy and cumbersome (event → journalist verification → editorial review → publication), whereas professional KOLs on Twitter can publish opinions within minutes or even seconds, directly impacting market sentiment. Especially trading and research-oriented KOLs, their speed in information acquisition and expression has become a crucial variable in market pricing. This advantage is particularly evident during breaking news and on-chain data anomalies.

Trust Dimension: From Institutional Endorsement to Result Verification

Crypto users increasingly care less about “who you are” and more about “have you made money, are your judgments accurate.” A KOL’s historical tweets, public holdings, profit/loss records are transparent within the community, making this traceable, quantifiable credit asset more persuasive than traditional media titles.

Action Dimension: From Reading and Thinking to Action Consensus

Traditional media aims to transmit information and inspire independent thinking. Crypto KOL content, however, often directly leads to action. An engaging tweet can cause a surge in trading volume of a token—an mobilization ability that traditional media cannot match.

Essence: The Scarcity Value in the Era of Information Overload

The rise of KOLs is fundamentally an inevitable result of the information age. Amid vast amounts of information, complex data, and projects of dubious authenticity, ordinary investors face enormous cognitive loads. The core value of KOLs lies in acting as “judgment nodes,” filtering information, organizing logic, and providing risk alerts.

This is not about spreading raw information but about processed “opinions” and “conclusions.” The market seems less interested in facts being confirmed and more in having influential voices make early judgments. This “judgment on behalf of others” stems from the market’s extreme pursuit of speed and widespread anxiety over complexity.

Meanwhile, official narratives from projects have decreased in credibility due to marketing motives. Independent, community-trusted KOLs’ interpretations and endorsements have become more recognized as “secondary narratives.” Prices are no longer solely determined by fundamentals but by who explains the story first.

Divergence: Internal Screening in the KOL Ecosystem

Not all KOLs benefit equally from this power transfer. The market is conducting a brutal and efficient screening process.

Three Survival Modes

• Research-Driven KOLs: Specialize in deep project analysis and industry research, monetizing through paid reports, consulting, knowledge payments, etc.
• Trading KOLs: Focus on secondary market trading, sharing strategies and real trading records, monetizing via copy-trading communities and trading courses.
• General Traffic KOLs: Gather followers through persona, entertainment content, or hot topics; monetization mainly through advertising and project promotion.

Sustainability Challenges

Signal-boosting/traffic-based KOL influence depends heavily on market conditions. During bull markets, they gain attention through emotional hype, but in bear or sideways markets, their content value rapidly diminishes, and users may “revisit old wounds” due to losses, causing trust to collapse. Their lifecycle is very short.

Persona-based KOLs have highly sticky “superfans,” with strong explosive power in bull markets, but their upper limit depends on whether they can provide judgment frameworks beyond personal charisma.

Research-oriented KOLs often “lose out” early in bull markets, but their verifiability becomes an advantage in bear markets. Their methodology and logic withstand the test of time, making them long-term reference figures.

Ultimate Screening: From “Help Me Make Money” to “Why Trust”

Early users ask, “Can you help me make another wave?” As the market matures, the question shifts to “Why should I believe you?” The market has a “memory”—it remembers judgments that led to major losses and values whether KOLs’ methodologies can stand the test of time.

In the long run, those with records, methods, experience, and a sense of responsibility for their statements will see their influence grow exponentially.

Monetization of Content Value Shifts

In the future, what is priced is not “attention” but “judgment.” Rewards will go not to content length but to whether the content changes others’ perceptions of an event.

This defines two types of creators: traffic-driven, relying on emotional resonance and platform recommendations; and cognition-driven, relying on verifiable logic. The former grows quickly but has a low ceiling; the latter grows slowly but has compounding effects.

Sincere participation and unique insights are the foundation of content creation. Deep participants often do not rely solely on traffic for results but leverage community discussions, interactions, and sharing to seize opportunities of the era.

Part Two: The Paradox of Liquidity and Market Divergence

Apparent Abundance, Actual Fragmentation

In 2025, the crypto market presents a paradox: on one hand, Bitcoin ETFs bring in massive institutional funds, making liquidity seem abundant; on the other hand, except for Bitcoin and a few assets (Ethereum, some Meme coins), most altcoins face liquidity exhaustion.

Four Drivers of Divergence

First: Institutional Capital “Closed Loop” and “Bias”

Funds entering via ETFs are fully closed loops; these funds cannot flow into altcoins on exchanges. Regulated institutional investors have strict requirements on compliance, liquidity, and market cap, making most altcoins invisible to them. New liquidity is tightly restricted to top assets, creating capital barriers between market segments.

Second: Supply-Side Crisis—VC Unlocks and High FDV Traps

The 2021 bull market fueled many projects with high valuations. By 2025, these tokens are entering unlocking phases. Project teams and early investors continue selling on secondary markets, creating persistent selling pressure. Many projects underperform, unable to absorb enough buy-in, and retail investors end up buying the cost of unlocks rather than future growth.

Third: Retail Behavior Polarization

After experiencing deep losses in the last bear or witnessing VC tokens decline steadily, retail investors polarize into two extremes: either hoarding “safest” assets like Bitcoin and Ethereum or diving into highly volatile Meme coins. Mid-tier projects driven by “fundamental narratives” are abandoned by both sides.

This is the market’s ruthless logic: rather than revive old altcoins, just launch new ones.

Fourth: Competition for Global Capital Flows

Crypto is no longer the sole destination for funds. Global liquidity is limited; capital rebalances among risk assets. When traditional equities or commodities present trend opportunities, funds flow out of crypto. The correlation between Bitcoin and Nasdaq strengthens, competing for liquidity with other risk assets.

Re-examining the Phenomenon

Generation Shift in Narrative Logic

Every cycle has its dominant narrative. 2021 was DeFi, GameFi, NFTs; 2025 is Meme and Bitcoin ecosystems. Trying to navigate this cycle with last cycle’s asset map is doomed to fail. Meme coins are the protagonists of this “altcoin season,” and old stories are not obligated to repeat.

“The Strong Get Stronger” Mathematical Model

A top asset with 10 million in assets and 100 small coins with 10,000 each—when the top absorbs all small coins’ assets via liquidity siphoning, it only grows by 10%. But that 10% means the 100 small coins are wiped out entirely.

Each cycle, the market cap of mainstream assets seems to grow little, but this often corresponds to the evaporation of many small coins’ market caps. Meanwhile, new “hard workers” keep entering the game, and the “landlords”’ dominance continues to strengthen.

Lack of Innovation Leading to “Narrative Vacuum”

In recent two or three years, there has been a lack of sufficiently innovative narratives. The innovations of 2021 (DeFi, NFTs, Layer 2) have been fully hyped, and short-term new stories of similar magnitude are unlikely. AI+Crypto and RWA are mentioned but have not yet triggered market-wide explosions. Without compelling new narratives to attract incremental capital, the market only spirals inward.

New Valuation Framework

When narratives fail and liquidity diverges, project valuation must return to fundamental dimensions.

Fundamentals: Focus on Real Revenue and Practical Value

A key metric is not FDV but whether the project has sustainable real income. Friend.tech, pump.fun, and prediction markets all share the trait of “profitable.” Also, assess whether the project has actual utility and can solve real user needs.

Mechanism: Examine Value Capture and Token Economics

High-quality projects need to pass three tests:

1. Revenue quality and retention—Is income from real user demand or just hype? Can it be retained, or does it flow out immediately after coming in?

2. Effects of scale expansion—More users mean a more stable and efficient system, or does it become increasingly slow and unusable?

3. Clarity of value feedback paths—Can income translate into token value? Are there clear buyback or consumption mechanisms?

Many protocols are making money, but their tokens hardly move. Such projects have high short-term valuations but are hard to outperform over time and the market.

Trend Aspect: Seek “Sufficiently New” and “Bottom-Up” Opportunities

Key features are novelty (from non-consensus to entirely new concepts) and bottom-up (not top-down institutional narratives). Bottom-up opportunities are more likely to generate retail wealth effects.

Systemic Risks Warning

Many assets are severely overvalued. A review of the market’s economic model is essential, and vigilance against systemic risks from over-leverage in DeFi is necessary.

Part Three: Regulatory Reshaping and Financialization

True Meaning of Regulation

In 2025, marked by events like the “21st Century Financial Innovation and Technology Act,” the implementation of stablecoin regulation frameworks, and the establishment of Bitcoin as a strategic reserve asset, global crypto regulation enters a new era of comprehensive legislation and framework building.

This is not merely about “restrictions” but a systemic process of integrating crypto assets into the modern financial system. The core feature of regulation is not restriction but definition and integration.

US Strategic Intent

The US is not regulating crypto per se but integrating it into the national financial system. This includes:

“Nationalization” of Bitcoin

Classifying Bitcoin as a strategic reserve asset, recognizing its “digital gold” status, clearing obstacles for large-scale allocations by traditional sovereign funds, pensions, and insurance funds. This fundamentally changes Bitcoin’s pricing logic—from halving cycles and community sentiment to deep ties with global liquidity, geopolitics, and macroeconomics.

“Weaponization” of Stablecoins

Regulating stablecoins (especially USD stablecoins) comprehensively to ensure safety, transparency, and compliance, enabling them to serve as legitimate global payment and settlement tools. Stablecoins will upgrade from being just trading pairs to the “digital dollar” frontiers challenging SWIFT.

Asset “Fate Stratification”

Regulation is not uniform but based on asset characteristics.

• Bitcoin/Ethereum: Defined as “commodities” or strategic reserves, with the highest compliance clearance, attracting the largest institutional capital. Path: “Nationalization / Commoditization”

• Stablecoins: Defined as “payment tools,” subject to strict reserve audits and licensing. Path: “Infrastructure / Monetization”

• Other tokens: Most may be classified as “securities,” facing the strictest regulation (IPO-like disclosure, exchange registration). Path: “Securitization / High-Risk Assets”

This leads to a market increasingly resembling the divide between traditional compliant tech stocks and high-risk speculative stocks.

ETF’s Profound Impact

Bitcoin spot ETFs are a milestone in regulatory financialization, with impacts far beyond “adding an investment channel.”

Fundamental Shift in Pricing Logic

The pricing power of Bitcoin shifts from miners, early holders, and crypto communities to Wall Street traders and macro funds. Price volatility becomes more correlated with Nasdaq, USD index, and US Treasury yields, weakening independence. Bitcoin increasingly resembles an asset with US-centric characteristics.

Hidden Risks of “Paper Bitcoin”

Although claiming 100% reserves, complex custody chains may contain opaque links. In extreme liquidity crises in traditional markets, ETFs could become assets sold to raise liquidity, exacerbating Bitcoin’s price decline. Moreover, ETF investors hold shares, not actual Bitcoin, losing direct control over the underlying asset.

DAT Model and Traditional Capital Arbitrage

Public companies like MicroStrategy issuing low-interest bonds to buy Bitcoin profit from interest spread and asset appreciation, offering a new capital allocation approach for traditional listed companies. When fiat debt costs are lower than Bitcoin’s appreciation rate, this becomes a “super printing press.”

This creates a “bridge” for traditional funds with different risk appetites to enter Bitcoin, promoting more complex capital operation evolutions.

Invisible Growth of RWA

Real-world asset tokenization (RWA) has surpassed DeFi in scale, bringing on-chain assets like government bonds, private credit, and real estate. RWA mainly serves institutional investors and ultra-high-net-worth individuals, growing rapidly in silence.

RWA changes the asset composition of the crypto market. Future crypto assets will diversify further, mostly dominated by US-led assets. Liquidity and attention will diverge.

Part Four: Outlook for 2026

Macroeconomic Background: An Atypical Structural Bull Market

Although monetary policies are easing, this will not automatically translate into a feast for all crypto assets. 2026 resembles a “structural bull market”—not all tokens will rise together; liquidity will flow selectively toward assets with solid value support.

Capital inflow pathways are clear: primarily through ETFs, with Bitcoin as the first destination, followed by Ethereum. Only after valuations reach high levels will funds spill over into other assets. This spillover is highly selective, targeting projects with understandable fundamentals, positive cash flow, actual products, and users.

New Paradigm of Asset Pricing

From “Narrative PS” to “Cash Flow PE”

The most important valuation factor in 2026 will no longer be whether there is a narrative but whether the narrative can generate stable cash flow. Revenue-generating ability, profit margins, and growth will form the valuation basis. Projects that only depict grand visions without revenue will struggle to attain high valuations.

Common Traits of Quality Assets

• Generate real cash flow (DeFi lending, prediction markets, gas fees, NFT royalties, etc.)

• Have actual utility and user stickiness (solve real needs, high switching costs)

• Healthy token economic models (strong correlation between token and protocol value, clear value accumulation mechanisms)

• Compliance or potential for compliance

• Operating in long-term growth tracks (AI+Blockchain, DePIN, privacy computing, new stablecoins, etc.)

Infrastructure Upgrading: Wallets as On-Chain Behavior Operating Systems

Wallets will evolve from mere asset containers to “on-chain behavior operating systems.” Future directions include:

• Enabling social recovery, gasless transactions, transaction bundling to improve user experience

• AI assistants to help interpret complex contracts, identify risks, and manage portfolios

• Seamless cross-chain and aggregation, so users don’t need to worry about asset location

• Deep integration with quality applications, providing secure and convenient entry points

Survival Strategies for Ordinary Participants

Strategy Adjustment: From “Trend Betting” to “Precise Allocation”

• Core holdings (80%) allocated to Bitcoin and Ethereum, acknowledging their institutional preference

• Seek stable cash flow assets, such as DeFi stablecoin staking, for certain returns

• Use smaller positions (20%) to participate in high-alpha opportunities while controlling overall risk

Cognitive Enhancement: Building “Cognitive Gap”

Information gaps are narrowing, but structural barriers are high; cognitive gaps become the biggest alpha. Understanding a sector, protocol, or new economic model earlier than others and recognizing its value will be key to profit. This requires continuous learning, deep research, and independent thinking.

Risk Control Discipline: The Most Important Is to Survive

• Reduce trading frequency; less trading can be advantageous, avoiding mistakes to outperform most

• Strict position management and stop-loss: take profits when appropriate, cut losses decisively, and avoid幻想; cash is king

• Build survival-oriented strategies: allocate most funds to low-risk, long-term positions (e.g., dollar-cost averaging into BTC), and use smaller amounts for high-risk experiments. Always stay at the table, with bullets for the next big opportunity.

Mindset Shift

• Break free from habitual reliance on past market logic

• Learn to accept “slowness”; truly valuable projects need time to grow

• Establish information firewalls to filter noise and emotional hype

Report Summary

What happened in 2025 is not just price fluctuations but a profound restructuring of underlying logic, power structures, and game rules.

Key Conclusions:

1. Paradigm Shift in Influence: KOLs move from periphery to core, with internal screening based on “judgment ability.” Content value shifts from attracting attention to delivering verifiable judgments.

2. Market Structural Divergence: Driven by institutional capital closed loops, VC sell-offs, and retail polarization. Bitcoin-centric and Meme cultures form two poles; mid-tier altcoins bleed out. Value discovery returns to fundamentals.

3. Systemic Integration of Regulation: Global regulation systematically incorporates crypto into traditional finance, leading to asset stratification. This changes pricing logic and introduces new systemic risks.

4. Evolution of Investment Paradigms: The illusion of a full bull market is shattered; a structural bull market becomes the new normal. Shift from “narrative betting” to “fundamental analysis,” from “high leverage” to “risk management.”

The crypto industry in 2026 will accelerate its differentiation and maturation. Bitcoin and compliant tracks will further integrate into mainstream finance, reducing volatility; native crypto innovations will continue to erupt in more vertical and technical fields, demanding higher professional capabilities from participants.

Past experiences may become burdens; continuous learning and evolution will be the most vital survival skills. The industry’s golden age is not over—it’s just unfolding in more complex and rational ways. Ultimately, winners will be those with insight, patience, and discipline—“long-termists.”