Crypto Assets, why can't they grow long-term value?

Written by: rosie

Compiled by: Luffy, Foresight News

Most of the cryptocurrency founders I know have gone through three transformations.

The group of people who built the NFT platform in 2021 shifted to DeFi yield projects in 2022, and from 2023 to 2024, they followed the trend to create AI agents. Now they are busy pursuing the current popular tracks (perhaps predicting markets?).

Their transformation itself is not wrong; in many ways, this is a choice that conforms to the rules of the game. But the problem is that the structure of these rules determines that any long-term construction is out of the question.

18-month product cycle

Narrative rise → Capital influx → Everyone follows the trend to transform → Invest 6-9 months in development → Narrative cools down → Transform again.

This cycle used to be 3-4 years (during the ICO era), then shortened to 2 years, and now, if lucky, it's only 18 months.

In the second quarter of 2025, the scale of cryptocurrency venture capital plunged nearly 60% in a single quarter, and founders have increasingly limited time and funds before the next trend forces them to pivot again.

The key issue is that 18 months is simply not enough to build anything meaningful. Real infrastructure takes at least 3-5 years to establish, and true product-market fit requires years of iterative optimization, not just a few quarters.

But if you are still attached to last year's narrative, you will become an “ineffective asset.” Investors will avoid you, users will churn, and some investors may even force you to follow the current popular trends. Meanwhile, your team members will start interviewing projects that have just raised funds based on the current hot narratives.

The sunk cost fallacy has become a survival mechanism.

Traditional business advice is: do not fall into the sunk cost fallacy, and if something is not working, pivot in a timely manner.

The crypto industry has taken this to the extreme, turning it into “maximizing sunk costs.” No one will stick with something long enough to verify whether it is truly feasible.

When there is a bit of resistance, pivot; when user growth slows down, pivot; when financing encounters obstacles, pivot.

Every founder makes such trade-offs:

Continue to develop the current product, it may take 2-3 years to see results, and if lucky, perhaps another round of funding can be raised.

Transforming into a popular narrative, able to secure financing immediately, generating book profits, and withdrawing before anyone realizes the project is unfeasible.

Most of the time, the latter is the better choice.

the dilemma of giving up halfway

Very few cryptocurrency projects can truly achieve their established development goals. Most projects are forever in a state of “coming soon,” always just one feature away from achieving product-market fit.

But they can never truly be completed, because halfway through development, the narrative changes. Suddenly, the DeFi protocol you're wrapping up becomes meaningless, as everyone is talking about AI agents.

The market will punish “completion”: finished products have clear limitations, while products that are about to be completed have limitless potential for imagination.

Capital chases attention, not results.

The actual financing situation is clear at a glance:

All-new narrative + no product: raised 50 million USD;

Established narrative of mature products: Struggling to raise 5 million dollars;

Old narrative + products + real users: completely unable to raise funds.

Venture capital does not invest in products, but in attention. And attention always flows to new narratives, not to completed old projects. Today, most teams are “maximizing narrative value,” optimizing purely for stories that can attract funding, completely indifferent to what they are actually building. Completion means self-limitation, while being unfinished retains all possibilities.

Team retention challenges

Your best developer received a double salary offer from a popular narrative project; your market leader was poached by a project that just raised $100 million.

You are completely powerless to compete because six months ago you decided to stick to the project at hand and gave up on the popular narrative at that time.

No one is willing to work on dull and stable projects; they prefer those chaotic and disorderly projects that have excess funds, which might collapse at any moment but could also yield 10 times the return.

User attention is scarce

Cryptocurrency users use your product just because it's new, everyone is talking about it, or there is an opportunity to get an airdrop.

Once the narrative shifts, they will leave immediately, regardless of whether your product has improved or whether you have added the features they requested.

You cannot create sustainable products for “unsustainable users.”

I know some founders who have pivoted too many times and have long forgotten what they originally wanted to create.

Decentralized social network → NFT platform → DeFi aggregator → Gaming infrastructure → AI agents → Prediction markets. Transformation is no longer a strategy, but has become the entire business model itself.

Infrastructure Paradox

Most things that can truly exist long-term in the cryptocurrency industry were born in an era when no one paid attention to cryptocurrencies.

When Bitcoin was born, it was ignored, with no venture capital and no token issuance; Ethereum was born before the ICO craze, when no one knew that smart contracts would develop into what they are today.

Most things born during a hype cycle ultimately fade away with the cycle; however, those created in the gaps between cycles have a higher survival rate.

But no one will build during the weekends, as there is no funding, no attention, and no exit liquidity at that time.

Why is it difficult to change the current situation?

The token-based incentive mechanism provides flexible exit channels. As long as the founders and investors can exit before the product matures, they will definitely do so.

The speed of information dissemination far exceeds the speed of product development. By the time you finally complete the development, everyone already knows whether it is feasible. The core value proposition of the crypto industry is “quick action”; asking it to slow down in building is equivalent to detaching it from its essence.

This means that if you spend 3 years building a product, others can copy your idea, launch a more rudimentary version with better marketing in just 3 months, and then beat you.

So, where should we go in the future?

The cryptocurrency industry finds it difficult to create long-term value because it is structurally at odds with long-term thinking.

You can be a principled founder: refuse to follow trends, stick to the original vision, and spend years rather than months refining the product. But you are likely to eventually run out of funds, be forgotten, and be replaced by those who have pivoted three times during the time it took you to launch your first version of the product.

The market does not reward “completion”, only “innovation” — creating again and again. Perhaps the true innovation in the crypto industry is not the technology itself; perhaps its real innovation lies in finding ways to extract maximum value with the lowest level of completion. Or perhaps the transformation itself is its product.