The Road to Recovery After the Crypto "Great Purge": A 2026 Overview of the Four Major Tracks

Bubble Burst Is Inevitable, But Opportunities Are Emerging

This cycle has been described by industry insiders as the “Crime Era,” and not without reason. Overvalued projects with low utility have drained the market’s last liquidity, while the proliferation of meme coins has tarnished crypto’s image in the eyes of the public. Even more frustrating is that almost no capital is flowing back into genuine ecosystem development.

Airdrops have turned from promises into traps, and Token Generation Events (TGE) have become escape pods for early participants and teams—who have long since left, leaving token holders and long-term investors to lick their wounds in the bear market. Most altcoins have never regained their former glory.

This may look like the end of the world, but in reality, it’s a necessary “surgery.”

2025 is not entirely dark. The rise of Hyperliquid, MetaDAO, Pump.fun, Pendle, and FomoApp proves one thing: Real builders are still committed and are driving the industry forward with actual products. The market is self-healing, and bad actors are being pushed out.

The clear question now is: What does crypto need? Real applications, sustainable business models, and projects that can generate actual cash flow for tokens.

This is the direction the crypto industry will focus on in 2026.

The Three Pillars of 2025: Stablecoins, Sustainable DEXs, and Institutional Holders

Systemic Breakthroughs in Stablecoins

In July 2025, the signing of the “Genius Act” marked a watershed moment—this was the first clear legal framework regulating payment stablecoins, requiring them to be backed 100% by cash or short-term government bonds.

What signals does this policy send? Traditional finance is finally no longer on the sidelines but is entering the space in force.

Just this year, net inflows into stablecoins exceeded $100 billion, setting a record high. Stripe’s acquisition of Bridge and Privy, Circle’s oversubscribed IPO, and top banks rushing to launch their own stablecoins—all are not coincidences but systemic signals of a shift.

The application scenarios for stablecoins are also expanding. Beyond payments, yield-bearing stablecoins (YBS) are emerging as a new growth point. Products like BlackRock BUIDL, Ethena, and sUSDs have doubled YBS supply to $12.5 billion. Despite recent market volatility and events like Stream Finance temporarily affecting yields, stablecoins remain one of the few truly sustainable businesses in crypto.

Monthly trading volume of stablecoins has surged to nearly $3 trillion, with Visa, Mastercard, and Stripe embracing this asset class. Merchants are beginning to accept stablecoin payments—an indication of the mainstream adoption driven by Web2 giants.

The Great Migration of Volume in Perpetual Contract DEXs

According to DeFiLlama data, open interest in perpetual contract DEXs has skyrocketed from $3 billion to $11 billion (peak at $23 billion), a 3-4x increase. Weekly trading volume has jumped from $80 billion to over $300 billion, making it one of the fastest-growing sectors in crypto.

Hyperliquid’s perpetual contract trading volume has reached 10% of Binance’s, and it’s still rising. This isn’t luck; it’s because DEXs offer advantages that CEXs cannot match: no KYC, ample liquidity, and expectations of airdrops.

Competitors are flooding in. Lighter, Aster, supported by VCs and CEXs, and Egdex, Variational, which seek differentiation through mobile applications and loss compensation. High FDV expectations and airdrop rewards have sparked a “token war.”

But the game-changer is the value anchoring mechanism. Hyperliquid has chosen to buy back $HYPE through an “Assistance Fund,” which has accumulated 3.6% of the total supply. This move has ushered in a “buyback era,” encouraging investors to pursue real value rather than illusory governance tokens.

The Rise and Fall of the DAT Boom

Trump’s pro-crypto stance attracted institutional capital, leading to the emergence of Digital Asset Reserves (DAT). Over the past year, 76 new DATs have been created, with treasuries holding $137 billion in crypto assets, over 82% of which is Bitcoin, and 13% Ethereum.

Bitmine (BMNR) has become a flagship case, emerging as the largest ETH buyer. However, idealism is always abundant—most DAT stocks experienced a “pump and dump” in the first 10 days, and after October, inflows plummeted by 90%, with most DATs’ net asset value (mNAV) falling below 1. The DAT craze is essentially over.

What We’ve Learned in 2025

The painful lessons include:

• Blockchain desperately needs real-world applications
• Trading, yields, and payments are the current core use cases
• Investors now favor protocols with cash flow over mere decentralization promises
• Tokens must have genuine value anchors, not just paper valuations
• Mature regulatory frameworks are crucial for attracting builders and talent
• Information itself has become a tradable asset (see platforms like Kaito)
• Non-differentiated new Layer 1/2 projects are being phased out

The Four Tracks of 2026

From Election Predictions to Daily Use

Prediction markets have become the hottest sector in crypto. “Bet on anything,” “90% accurate forecasts of reality,” “users assume risk”—these headlines are highly attractive.

Weekly trading volume has surpassed the peak during election periods, even after removing wash trading. Polymarket and Kalshi dominate distribution and liquidity; competitors lacking differentiation face extinction (except Opinion Lab).

Institutional players are pouring in: Polymarket received investment from ICE, with valuations soaring to $12-15 billion; Kalshi completed Series E funding at a $11 billion valuation.

In 2026, the launch of $POLY tokens, IPOs, and distribution via Robinhood and Google Search are likely to make prediction markets the main narrative. But challenges remain—analysis of outcomes, dispute resolution, anti-wash mechanisms, and long-term retention are still unresolved.

Personalized prediction markets (like @BentoDotFun) will also emerge.

The Full Deployment of Stablecoin Payment Networks

The “Genius Act” and Europe’s MiCA framework have alleviated institutional concerns. Etherfi’s daily transaction volume has stabilized above $1 million and continues to grow. New crypto banking services are offering card products enabling direct stablecoin spending.

Platforms like Tempo and Plasma are poised for explosive growth, with distribution power from Stripe and Paradigm fueling this expansion.

However, high CAC (Customer Acquisition Cost) and the profitability dilemma of self-custodied assets remain. In-app token swap features and re-packaged yield products may be the solutions.

The Era of Mobile dApps Has Arrived

Nearly 10% of daily transactions worldwide are now conducted via mobile devices, led by Southeast Asia’s “mobile-first” wave. This is a fundamental shift in payment behavior, naturally extending into crypto.

Account abstraction, unified interfaces, and mobile SDKs have matured. A16z Crypto research shows a 23% annual increase in crypto mobile wallet users, with no signs of slowing.

Fomo App reached an average daily transaction volume of $3 million (peak at $13 million) in just six months, proving that smooth UX attracts newcomers. Aave and Polymarket are prioritizing mobile experiences, and new entrants like Sproutfi are focusing on mobile-first.

As Generation Z’s habits evolve, mobile dApps will be the fastest-growing sector in 2026.

Real Revenue Is the Endgame

The fundamental reason people find this cycle hard to believe is: Most listed tokens generate little to no revenue, and even when they do, it’s often disconnected from the token’s value. After narratives fade, the price tends to decline.

The crypto industry relies heavily on speculation, neglecting real business fundamentals. DeFi projects often resemble Ponzi schemes, attracting early adopters, but after TGE, it becomes a selling race rather than product development.

To date, only 60 protocols have generated over $1 million in revenue in 30 days. Compared to Web2, which has 5,000–7,000 IT companies with monthly revenues at this level—clear disparity.

But a turning point is emerging. Trump’s pro-crypto policies make profit sharing possible. Hyperliquid, Pump, Uniswap, and Aave are actively focusing on product and revenue growth, recognizing that the crypto ecosystem needs a positive flow of value.

Buyback mechanisms have become the most powerful value anchoring tools in 2025, signaling the clearest alignment of interests between teams and investors.

Where does the strongest revenue come from? Despite an expected 40% decline in chain-level revenue, DEXs, trading platforms, wallets, trading terminals, and applications are the big winners, growing 113%!

According to 1kx research, the proportion of value flowing to token holders in crypto is at its highest point in history.

Conclusion: Evolution, Not End

Crypto has not died; it is evolving. Market “purification” will make the ecosystem stronger, potentially increasing tenfold.

Projects that survive must meet three conditions: achieve real-world applications, generate genuine revenue, and create tokens with actual utility or value flow.

These projects will be the biggest winners. And 2026 is the critical moment for this transformation.