2025-12-26 12:16:05

In the past two years, a very interesting phenomenon has emerged in the crypto market—funding has clearly differentiated.

Since the approval of the spot Bitcoin ETF, a large influx of compliant capital has poured into BTC. This is a good thing, but the problem is: all the money is concentrated in BTC, and the incremental funds flowing into other sectors have significantly decreased. The data clearly shows how big this difference is—BTC has nearly a 90% increase over two years, and this performance can be considered steady growth in a bull market.

However, looking at Layer2, GameFi, and other once-hot narrative sectors, the situation is completely different. Their retracements generally exceed BTC's gains, and some projects have even experienced alarming declines. Why is this happening? Simply put, market attention and capital have been attracted to BTC, Ethereum, and their ecosystems, which are also developing but indeed haven't received as much incremental funding.

This structural differentiation phenomenon is worth noting. It reflects deeper changes in market sentiment and capital allocation strategies—compliant capital tends to prefer relatively risk-controlled large-cap assets, while risk appetite for small and medium narrative sectors has significantly decreased.

BTC0,33%

ETH1,15%

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NotFinancialAdviser

· 2025-12-29 11:34

That's why I've always said not to chase the hype, sticking to accumulating BTC is the real way. --- Layer2s have really been ruthlessly abandoned; it feels like the entire market is playing a big game. --- When compliant funds come in, this is the result. Steady does not equal profit, but it does reduce risk. --- BTC is the ultimate goal; all other narratives are just supporting roles for the main character. --- Just look at your coin list to know what it feels like to cut losses... --- The question is, can small-cap coins rebound, or will they just lie flat like this? --- The so-called capital differentiation sounds nice; in plain terms, retail investors just don't have money anymore. --- The Ethereum ecosystem has really been neglected. What about the turnaround we talked about earlier? --- It's all because ETFs broke the ecological balance, making the market too uneven. --- But to be honest, those following the trend are all leeks; risk awareness is the key.

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UnruggableChad

· 2025-12-29 01:24

It's just capital piling into BTC, other sectors are being drained. --- So, all those GameFi projects are now pretty miserable. It's because people are only looking at BTC. --- Isn't this the inevitable result after institutions entered? Conservative approach. --- Why is Layer2 so miserable? It was so popular before, now it's simply forgotten. --- Regulatory capital came in and ended up killing small coins. Irony. --- BTC siphoning mechanism, is the Altseason really about to disappear? --- I already said it, this bull market is just BTC partying alone, everything else is just a backdrop. --- Guys still daring to invest in GameFi now, truly have courage.

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OnChainArchaeologist

· 2025-12-28 22:35

That's it, BTC eats the meat, Layer2 drinks the soup, a typical Matthew effect. When ETFs arrive, institutions will all bet on BTC, how can small coins survive? Regulatory funds are all cautious, only recognizing BTC, everything else is gambling, right? GameFi projects are really miserable, no matter how good the narrative is, it can't stop the lack of funds entering the market. Ethereum ecosystem needs to think about how to save itself; relying solely on its own development is definitely not fast enough. Actually, this is still the mindset of a bear market that hasn't fully passed; it's true that institutions are hesitant. This wave of differentiation was obvious early on, so I cleared out a bunch of small coins long ago, now holding full positions in BTC makes me much more at ease. Fundamentals' differentiation is nothing new; the last bull market was the same, just a cycle issue. To put it simply, no one wants risky assets anymore; everyone is looking for stable returns. I understand, but it's also too conservative.

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MergeConflict

· 2025-12-26 12:46

BTC dominates, everything else has to go hungry, this is the current situation. Layer2 free? That will have to wait until the next cycle. Regulatory funds are like this, incredibly stable, no one cares about minor narratives. When Bitcoin takes off, other coins have to be sacrificed; this wave of divergence is truly absolute. The Ethereum ecosystem has been somewhat awkward these past two years.

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FreeMinter

· 2025-12-26 12:45

That's why I'm still holding a few Layer 2 bags... feeling like I've been completely cut off. As soon as ETFs arrive, it's all institutional players; who still cares about small coins? Is it only possible to wait for the next narrative restart? I really can't hold on anymore, BTC is eating the meat alone while others are just sipping the broth.

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AirdropHunter420

· 2025-12-26 12:45

BTC vampire, it's just outrageous. When will the altseason come? That's why I'm still holding onto small coins, betting on a narrative reversal. Regulatory funds coming in have instead suppressed the ecosystem, it's ironic. Layer 2 projects are really suffering, feeling forgotten. The divergence in funding is so severe that small and medium projects are basically out of the game.

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OnChainDetective

· 2025-12-26 12:44

nah the real story here is institutional money literally gatekeeping everything except btc... traced the flow patterns and it's textbook capital concentration, not even subtle tbh

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CryptoCross-TalkClub

· 2025-12-26 12:39

Laughing to death, this is the "wealth gap" in the crypto world. BTC is steadily growing, while small coins are dancing on the floor price. How are the brothers who bought the dip in Layer2 doing now? I dare not ask. Regulatory funds are like this, only recognizing BTC as the "big blue chip." GameFi project teams are probably crying in their white papers. I would call this move "institution-level leek cutting," where are the retail investors' incremental funds? They have already been wiped out in some limit-down boards. BTC has gained 90% in two years, while some altcoins have plummeted far beyond this number. This is called "shared prosperity," right? Regulatory capital is prudently allocated, and we retail investors are just responsible for paying tuition fees. Everyone has their own fate. Take a look at those Layer2 coins in your wallet; it really feels like participating in an endless limit-down show.

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DeFiCaffeinator

· 2025-12-26 12:25

BTC Vampire Mode activated, Layer2s can just lie flat It seems that compliant funds are only looking to bottom fish, making small and medium narratives really difficult This is probably the cost of institutional entry, so steady to the point of boredom Wait, are those GameFi projects really hopeless, or are they just being completely overlooked? Funds are so clearly divided, will there be reverse arbitrage later? Compliance is truly a double-edged sword; money flows in but the ecosystem is being squeezed out But on the other hand, a 90% increase in BTC is considered top-tier in a bear market Projects in small and medium tracks need to find new stories; old routines clearly can't attract money The Ethereum ecosystem is a bit awkward, caught between BTC and narratives It seems we have to wait for the next hot topic to emerge to break this deadlock

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