Crypto 2029: The Ultimate Prediction of the Crypto Industry's Four-Year Cycle

Original author: Luke

Translation: Saoirse, Foresight News

You are standing on the eve of the biggest transformation in cryptocurrency history. If you want to continue to thrive in this industry, you must keep a close eye on everything happening right now.

Currently, the entire industry faces three core problems:

• What exactly determines the value of a token?
• How can various cutting-edge technologies be implemented within the blockchain ecosystem?
• What happens to the market when cryptocurrency is no longer a standalone asset class but becomes the underlying infrastructure of traditional finance?

I could theoretically dissect these three issues one by one, and countless people do this every day, but theoretical discussions never lead to a definitive conclusion. So I plan to take a different approach: I will outline, in stages, the real changes the industry will undergo from now until 2029, specifying entities, data, and timelines. This will be concrete enough that you can verify my predictions three years from now. This is just one of many possible futures, and some inferences are bound to be wrong. But vague, abstract future predictions cannot be falsified, and unfalsifiable opinions are worthless. I would rather give clear, possibly wrong judgments than speak in ambiguous, never-fail platitudes.

The perspective of this prediction stems from my work: I have long been deeply involved in the intersection of crypto startups, industry regulation, and venture capital, and I communicate weekly with alternative asset managers and capital allocators. This doesn't mean my judgment is definitely correct, but my reasoning fully considers real-world constraints.

Mid-2026: Quality Assets Are No Longer Various Tokens

By mid-2026, before the market has uniformly defined a standard for token valuation, the perpetual contract market for non-publicly issued companies has already found product-market fit.

This transformation began with the Hyperliquid platform. The perpetual contract for SpaceX's non-public issuance on the platform was initially criticized for price manipulation during Ventuals' malicious liquidation, but later became the most-watched price reference in both primary and secondary markets. By July, major banks and hedge funds were using this contract to price their own private assets. Trading platforms for retail users, like Robinhood, also used it to predict the opening price of companies after their IPO. In the weeks leading up to a large company's IPO, the price of this perpetual contract accurately tracked the final opening price, with such precision that it embarrassed the investment bank underwriting teams charging seven-figure fees for pricing services. Open interest in perpetual contracts for OpenAI and Anthropic hit new highs. For a period, this native crypto exchange became the most reliable global channel for real-time valuations of top unlisted companies.

Meanwhile, a fundamental question arose among ordinary traders: Why should all the other types of coins on-chain continue to trade? The altcoin market had been bearish for 18 consecutive months, with project founding teams and investment institutions continuously exiting through large block trades and time-weighted algorithmic selling. In contrast, $HYPE, the only token with a complete value capture loop, outperformed all other assets in the market. The industry had introduced over a dozen token value capture mechanisms, but most failed to form a positive cycle. The root cause was that the projects these mechanisms relied on had no asset value themselves. The industry solved the technical problem of how a token captures value before finding the real assets worthy of carrying that value.

This inverted industry reality is the underlying driver behind the non-public issuance perpetual contract craze. What the market truly craves is never the perpetual contract product itself, but quality assets. And in mid-2026, the only quality assets tradable on-chain are synthetic income rights of real-world companies unrelated to the crypto industry.

Late 2026: The AI Track Doesn't Need Crypto

With technological breakthroughs by Anthropic and OpenAI, competition in the foundational large language model race intensifies, and the market begins to price Artificial General Intelligence (AGI) ahead of time. The knock-on effect is a continuous outflow of funds from all non-leading foundational model companies. Capital starts to view general AI as a core asset held on a company's balance sheet, rather than a standardized tool for universal industry adoption.

In this environment, the "AI + Crypto" track quietly declines. It's not that the logic is disproven, but the industry has no time to debate it. The x402 payment protocol officially launches but has zero paying users. The envisioned on-chain agent economy fails to achieve规模化 adoption; all existing agents settle transactions in dollars via APIs, identical to the traditional software industry. Venture capital circles reach a consensus: The AI industry itself does not need cryptocurrency as a support layer, and investors stop forcefully promoting this track.

The only "AI + Crypto" product that has truly achieved product-market fit right now is the prediction market. Trading volume around predictions on the performance of various foundational models grows rapidly, making it the most accurate financial tool for betting on the core variable that can sway massive capital flows: which company will have the best-performing model in the coming month.

Beyond the noise of the trading screens, another quiet transformation is happening: When the CLARITY Act passed the Senate in mid-2026, most traders thought it was inconsequential, and the market didn't see a price surge. But by the end of the year, asset tokenization projects accelerated their rollout. Major asset management firms transitioned fully from pilot phases to formal operations, doing so quietly and without publicity – the core job of compliance departments was to avoid project hype. Tokenized assets were concentrated in boring, intermediate balance sheet items like money market funds and private credit. These assets had no KOLs pumping them on social media, no price charts for speculation.

By the end of 2026, the crypto industry had split into two almost non-interacting independent economies: one noisy and vibrant, generating returns by betting on AI track performance; the other silent and low-key, being gradually absorbed into the traditional financial system through a series of compliance documents. The vast majority of industry participants focus on the former market.

Early 2027: Foundation Roadmaps Become Clear

General-purpose blockchains can no longer have it both ways with模糊 positioning.

For years, major foundation teams have told two completely separate stories: publicly pitching a vision for mass adoption to retail users, and privately promoting institutional-focused services. These two narratives never intersected. By early 2027, the contradictions between these two development paths become fully apparent.

The retail track is highly concentrated. The only retail product with genuine user demand sees all its trading volume funneled to a handful of trading platforms. Meanwhile, institutional business is the only track currently providing stable paying customers. One by one, the major foundations commit to a core development direction, and they overwhelmingly choose the same path: building enterprise sales teams, setting up compliant services, launching unified compliance SDKs for tokenized asset transfers and broker-dealer licensing, expanding Wall Street partnerships, and enhancing privacy transaction features.

Media and crypto social platforms interpret each of these strategic shifts as a trade-off: prioritizing institutions over retail, choosing serious financial clients over the投机 casino.

But insiders within the foundations don't see it this way. The teams are actually *increasing* their bets on retail-focused crypto services, just with a different implementation logic. The eligibility criteria for accredited investors have been loosening for years, expanding the pool of qualified individuals. The infrastructure being built by foundations for institutions will soon be opened up to the current non-accredited retail users. The infrastructure teams know this, but they don't announce it publicly. When talking to the public, the compliance infrastructure teams only discuss bank clients, because banks are the ones paying the bills now.

And the quiet institutional market formed in late 2026 is about to receive an unprecedented influx: a massive wave of future ordinary compliant investors. The two previously separate economies finally find a bridge for connection: the "Accredited Investor Verification."

Mid to Late 2027: Triple Growth Ceilings

A new wave of tech companies reignites the private market: rounds in AI-biology fusion, embodied AI, and humanoid robotics are all oversubscribed, valuations skyrocket, but they are still years away from IPOs. Perpetual contract platforms list corresponding assets within weeks. Open interest on synthetic contracts for these companies (with minimal revenue) breaks records. The market dynamics of 2026 repeat, but with larger capital: the world's most sought-after quality assets are all in the primary private market, and the only corresponding asset users can trade on-chain is a synthetic perpetual contract settling funding rates every 8 hours.

However, three types of markets hit their respective development ceilings, constraining the industry's growth rate:

The Ceiling for Non-Public Issuance Perpetual Contracts: Real private assets grow steadily through traditional private channels, compounding quarterly, but with zero presence on hyped-up crypto social platforms. The growth of perpetual contracts lags far behind real private assets. The core constraint is the prohibition on publicly soliciting investors for private securities. The traffic model the crypto industry excels at – showing price charts to attract retail – cannot be legally applied to these assets. Furthermore, perpetual contracts have a structural weakness: they need a near-term event like an IPO as a price catalyst, limiting them to late-stage mature companies. Synthetic contracts cannot be issued for mid-stage startups like AI-biology or humanoid robotics, which are far from any exit channel. For the vast majority of primary market assets, regulated real shareholding channels aren't a second-best option; they are the only legally compliant trading tool, but the law prohibits public promotion.

The Ceiling for Stablecoins: The total circulating supply of stablecoins continues its steady upward march, never stopping, but major institutions quietly scale back their expansion plans. The midterm elections changed the power dynamics in congressional committees. The candidate list for the 2028 presidential election is taking shape, with several prominent candidates publicly opposing private dollar token issuance. While the relevant bills passed in 2025 and 2026 weren't repealed, their enforcement power now lies with the new administration. Every bank treasurer, when making ten-year settlement plans, must factor in the risk scenario of a stricter regulatory stance from the next government. The industry won't completely halt stablecoin projects, but will lengthen timelines and shrink pilot sizes as everyone waits for the November 2028 election results. The velocity of on-chain dollars becomes entirely tied to policy uncertainty, which is high in mid-2027.

The Ceiling for Asset Tokenization: This conservatism spreads to the entire institutional crypto market. Tokenized private credit and fund share products continue to launch, all compliant, but institutions deliberately control project sizes. No one wants to be the cautionary tale at a Senate hearing next year.

The commonality among the three tracks is clear: the product logic is sound, market demand is validated, but external policy forces outside the industry strictly limit development speed. Setting aside crypto's own volatile boom-bust cycle standards, 2027 is actually a year of steady growth for the industry. It's just that the crypto industry, accustomed to a decade of explosive growth for a decade, only sees straight-line upward trends as success.

2028: The Scarcity of Compliance Access Ends

(From this point on, prediction accuracy decreases: previous predictions were quarter-specific; from 2028 onwards, I can only project by year, widening the margin of error. This analysis assumes one core assumption: a Democratic Party candidate wins the November 2028 general election. If the opposite outcome occurs, the timing of industry events will shift, but the overall development framework will not change.)

The speculative casino nature of the crypto market gradually fades, and almost no one can pinpoint the exact inflection point. The market's capital extraction mechanism becomes too efficient. Each subsequent liquidity cycle from 2026 to 2027 has less net new inflow than the last, and capital is siphoned off faster by a small group of top players. There is no iconic crash event. Memecoin mania will still appear intermittently, with daily pumps, but after some point in the first half of 2028, speculative trading is no longer the industry's core focus. Trading volume exists as a statistic, not as the dominant force shaping the ecosystem's culture. Some traders move to prediction markets to absorb the hype; some stay in the shrinking speculative corners; and a large number of traders spent the past year doing something no one expected in 2026: getting accredited investor certification.

Policy fears are gradually priced into the market throughout the year. Both major party candidates accept industry donations, just with different rhetoric, but a unified core position emerges: the crypto industry needs regulation, not a blanket ban. Those who treated the previous administration's lax regulation as a window for exploitation are gradually investigated. The industry slowly realizes that regulatory cleanup is actually a bullish signal: the government distinguishes between speculative extraction businesses and financial infrastructure. Only infrastructure can attract safe capital. The bank treasurers who scaled back pilots in 2027 quietly resume their expansion plans before the election. By the time the election result is clear, most of the policy risk premium has already been digested.

The most profound lesson for the industry in 2028 comes from the trading market everyone was watching. Early in the year, on a top-tier exchange, a large position capable of moving the market triggered simultaneous liquidations on several popular non-public issuance perpetual contracts. The cascading liquidation risk the market had feared since the Ventuals manipulation event fully materialized. Hundreds of billions in open interest vanished within hours. Automatic deleveraging kicked in, losses were socialized, and profits were severely discounted. Afterwards, no one could definitively determine if the volatility was malicious manipulation or a simple market accident. This ambiguity is the core conclusion: a market lacking underlying spot price discovery has no fair reference price. One cannot even define "market manipulation," let alone gather evidence. Perpetual contracts for listed companies have spot price constraints, but non-public issuance perpetual contracts have no underlying anchor. Real private shares do have compliant trading channels, but they cannot be widely marketed or broadly priced. Every perpetual contract price is just the platform's own estimation, leaving ample room for human intervention. This cascade wasn't a failure of the synthetic market itself, but the inevitable result of market mechanics operating without the support of real underlying assets.

For the past decade, the ban on public solicitation for private securities was packaged as investor protection. But this market crisis proves otherwise: this rule simply locks ordinary investors out of legally-protected trading channels, pushing them towards high-leverage, unanchored synthetic contract markets. The real dividing line has never been synthetic vs. real assets, but whether the trading rights are legally enforceable.

The new regulations following the crisis are less a reform and more a completion of the financial infrastructure. Regulators issue guidance allowing the public promotion of secondary market trading in private securities, but *only* to verified accredited investors and *only* for secondary shares (excluding primary rounds). The pool of eligible investors has been steadily expanding for years. The logic is straightforward: synthetic contract markets need an underlying price anchor. The cheapest solution is to open up a public流通渠道 for real private assets. A ninety-year-old restriction on solicitation is significantly relaxed, solely to improve the derivatives market.

The first week after the new rules is as heated as a new memecoin launch, with one difference: the asset being traded is equity in real companies. Listing, screenshot sharing, and community promotion of private secondary shares all become legal for the first time in the history of this asset class. Social media is split: half see it as a revolutionary new financial tool; the other half worry retail will become exit liquidity for VCs. The latter's intuition is correct, but their judgment is behind the times. This concern held when assets were worthless speculative tokens. But now, the traded assets are the real-world income rights of companies that the perpetual contract market proved the entire market craves over the past two years.

Capital first floods into the late-stage mature companies already validated by the perpetual contract market. Then, because real shareholding has no funding rate and no IPO deadline, capital flows further into mid-stage startups that perpetual contracts couldn't cover. Perpetual contracts don't die; they transform into a supplementary板块 for late-stage trading, no longer commanding the core traffic of the market.

By December, the industry enters a new bull market, driven by the oldest asset in finance, finally getting a legal流通渠道.

2029: The Market Becomes the Only Core Narrative

This is the first full year of the bull market, but its trajectory is entirely different from past crypto bull runs, and this difference is the core value. The assets that continuously rise are all real businesses creating tangible social value. The new basic asset class for ordinary users is private company equity: biotech firms completing multiple clinical trials, humanoid robot manufacturers everyone has seen demo videos for, and the AI labs whose perpetual contracts were traded in 2026. Now, users can directly hold real company shares.

With the gradual lowering of the accredited investor threshold over a decade, a new retail class has emerged. Assets only accessible to institutions five years ago are now tradable by ordinary compliant investors. Most people won't even categorize this type of trading as "crypto investing."

The token sector diverges completely along the lines of the core problems raised at the start of this article. L1 blockchains successful in becoming the underlying settlement and issuance infrastructure for this new market capture real business flow. Their platform tokens become equivalent to income rights certificates for that business cash flow. All other tokens will face a brutally realistic market rule: tokens lacking legally enforceable income rights and a complete value capture loop won't just slowly bleed for 18 months like in 2026; they will directly and completely lose trading liquidity. The debate over token value capture mechanisms that consumed the industry in 2026 ends without a single winner. The circulation of real private assets on-chain renders the entire debate moot.

Stablecoins follow their trajectory throughout the cycle: steady compounding growth, no explosive surges. By the end of 2029, total circulation has roughly doubled from mid-2027, an average annual growth rate of about 20%. The growth ceiling isn't a lack of market demand, but a bipartisan policy consensus: allow private dollar tokens to develop moderately to meet practical needs while avoiding competition with the sovereign monetary system. The velocity of on-chain dollars is tied to policy certainty, which is stable and long-term predictable in 2029.

The speculative sector still exists, shrunk to specific niches. It occasionally generates short-term hype, but its overall influence is no more than a sub-sector of the entertainment industry. Speculative traders分流 to prediction markets, the new private secondary market, and one path no one predicted in 2026: getting accredited investor certification.

The third core problem posed at the beginning – how cryptocurrency transforms into traditional financial infrastructure – is ultimately answered in a silent way: the question becomes completely meaningless. The details