Bitcoin was once seen as the starting point of a financial revolution, a symbol of rebellion, a weapon against regulation, and a global trillion-dollar asset. However, as countries open up to tokenization of assets and financial infrastructure is fully upgraded, capital is quietly leaving Bitcoin.
Researcher @PillageCapital, in “The Great Cryptocurrency Exodus: Why Funds Are Leaving Bitcoin,” believes that Bitcoin has completed its historical mission. It is no longer the ultimate solution but rather a “battering ram” of the previous era. The next wave of truly mainstream narratives has already shifted towards the tokenization of physical assets.
The Former Torch of Rebellion: How Bitcoin Became the “Financial Siege Engine”?
@PillageCapital Starting from the birth of Bitcoin, it points out that its emergence is not for efficiency, but for survival.
From the 1990s to the 2000s, many digital currencies were easily destroyed by governments due to their centralization weaknesses. A typical example is E-gold, which was popular for its anonymity, convenience, and cross-regional characteristics. However, this platform, which had 5 million users and an annual trading volume of 2 billion dollars, vanished after regulatory enforcement actions in 2005.
Satoshi Nakamoto saw the fatal flaw, so he created a decentralized system that cannot be destroyed and cannot be terminated by law enforcement:
Bitcoin has never been the future of currency, but rather a weapon against national blockades, a battering ram to break financial monopolies.
Necessary Illusion: How Bitcoin Emerged as a Revolution for Everyone?
The early use of Bitcoin was a political action; by downloading a wallet and scanning a QR code, one could make instant payments without banks or regulation. This was the first time people felt the shock of “free currency.” This rebellious narrative, combined with network effects and a self-reinforcing value cycle, drove the continuous expansion of Bitcoin.
From heated discussions in the Reddit community to live fundraising at major exhibitions, and the forced involvement of institutions and regulators, including BlackRock applying for an ETF, companies purchasing BTC with corporate bonds, and the president proposing to use Bitcoin as national reserves:
This startup mechanism can be called perfect. By investing in a project, posting, promoting, debating, and guiding new users, it directly increases the value of the tokens in your wallet and your friends' wallets. This rebellion can earn you rewards.
However, the author believes that this is all an illusion, as Bitcoin continues to grow after each regulatory crackdown and negative report, and everyone seems to believe that this “magical internet currency” is the true destination.
The End of the Monopoly Era: Bitcoin is No Longer the Only Choice
The biggest moat of Bitcoin has never been efficiency, but “monopoly”. In an era of strict financial regulation and outdated payment channels, the only way to digitize value or achieve true financial freedom is through Bitcoin.
The situation is now different: financial products such as US stocks, US bonds, and gold are beginning to move towards tokenization, tokenized fiat ( stablecoins ) with a market value of hundreds of billions, banks integrating stablecoins, and exchanges like Coinbase incorporating banking services.
The author uses the migration of USDT as an example: “USDT was initially issued on Bitcoin, but later shifted to Ethereum for transaction fees and usability, and then moved to Tron.”
Stablecoin companies have no loyalty to any chain; they view blockchains as expendable conduits, with assets and issuers being what matters.
Therefore, when more available and competitive channels emerge, Bitcoin will lose its monopoly and pricing power.
(No one cares about your chain: After enterprise-level L1 vertical integration, is there still a place for Ethereum and L2? )
Technical reality: Bitcoin has never been a good payment system.
At the same time, Bitcoin has many technical flaws over the years, including:
Hard to remember addresses,容易轉錯遺失
The transaction fees are unstable, having soared to several hundred dollars.
Wallet often experiences transaction lag and does not display balance.
Transfer and cross-chain operations are complex and prone to errors.
The most ironic thing is that it is not decentralized protocols that improve the user experience, but centralized institutions like Coinbase and Binance, which rely on Web2 mechanisms such as passwords, account recovery, and customer service to expand the availability of BTC. It is hard to imagine that Bitcoin ultimately failed to deliver the financial services it claimed to replace.
No more outpacing rewards: High risks did not bring high rewards, but rather a comprehensive lag.
Looking back at this four-year cycle, Bitcoin's returns have been surpassed by many traditional financial products.
Investors have endured regulatory pressure, hacker attacks, various scams and phishing websites, exchange crashes, and extreme volatility, only to underperform against a technology stock index.
In terms of supply and demand, the old whales need to cash out every month to sustain their lives, while the conservative new funds from ETFs only invest 1% to 2%: “These meager funds must fight against the ruthless sell-off by early holders, exchange transaction fees, fraudulent tokens, and hacking attacks to barely maintain the price from falling.”
The era of gaining large profits by circumventing regulations has passed.
Stagnation in the crypto ecosystem: developers turning to AI, lack of innovation
In terms of technological advancement, developers seem to have sensed that the aura of cutting-edge technology is no longer, and prices are stagnant. Activity has dropped back to 2017 levels, with many young engineers moving towards fields like AI and robotics.
Number of developer proposals per ecosystem each week
Nowadays, the Bitcoin code is difficult to upgrade, and the core development speed has slowed down. Without new applications, no technological iterations, and no incremental demand, the value naturally struggles to rise.
Human Nature and Institutional Choice: What the World Truly Needs is “Correctable” Finance
The cryptocurrency led by Bitcoin advocates the irreversible reality of “code is law (Code is law)”, which is exactly opposite to the logic of human social systems.
He cited the reasons why Tether can be widely used globally, including that hacked assets can be frozen, erroneous transfers can be blacklisted and reissued, and there is a complaint process and KYC verification:
Obviously, no one really wants a completely unregulated financial system; these “remedial” mechanisms are what provide most users with a sense of security.
In this era where cryptocurrencies are moving towards compliance, the extreme decentralization of Bitcoin has become rather untimely.
The new era has arrived: Capital flows into the tokenization of real assets
The author clarifies that Bitcoin has not failed; rather, it has successfully accomplished its mission: “It has broken the state’s blockade on digital assets, forcing the world to accept tokenization finance.”
Now a new protagonist has emerged, from tokenization of gold, US stocks to the explosion of various infrastructures, these assets have real value, have yield, have regulation, and have channels for complaints, and are expected to gradually become the foundation of a new global financial system:
The era of Bitcoin is coming to an end, and the door to the tokenization of physical assets is opening. Instead of worshipping the tools that break through the door, it's better to start paying attention to the truly important assets and transactions on the other side.
This article looks at the future prospects from the positioning of Bitcoin: the BTC revolution mission has ended, and capital has retreated towards tokenization assets. It first appeared on Chain News ABMedia.
