From Mockery to Reality: Crypto Forced to Grow Up

Author: Evanss

Compiled by: Felix, PANews (This article has been abridged)

"Have fun staying poor" was once the favorite taunt of the early crypto community. Back then, it was trendy to change your avatar to "laser eyes" and chant slogans like "Bitcoin to $100,000 before Thanksgiving." If some "boomer" old-school investor asked what actual returns these tokens generated, it was treated as a joke—how could anyone expect fundamentals from a "magic internet token"? Asking such a question meant you didn't understand the space and were destined to remain forever at the bottom.

Today, it turns out the final outcome is "buybacks." The largest on-chain exchange spends about 97% of its daily fees buying back its own token from the market, with the amount already exceeding $1 billion and still growing. The Financial Times has begun auditing crypto buyback programs, and S&P Dow Jones Indices has licensed the S&P 500 index to a perpetual DEX. The winning formula for crypto in 2026 is cash flow, growth rates, dividend policies, and the absence of equity/token conflicts. These are precisely the things that the original taunt sought to escape. Now, those who are truly "happy staying poor" are mostly the ones still clinging to "vaporware" roadmaps.

I explored this topic in an article I wrote in January of this year, "The 'Moon Generation' and the Era of Rotating Bubbles." The article pointed out that with the entry of "boomers" and TradFi forces, altcoins would be forced to compete on real fundamentals rather than relying solely on vision and dreams. I called this process the "boomerification" (or "aging") of crypto.

Eight months later, the market has reflected this trend. The "aging" investment style comes in two main forms, because their portfolios have always contained two types of assets: income-generating stocks and gold, which preserves value without generating income. Bitcoin has already completed the gold playbook (ETF, institutional allocation, inclusion in retirement portfolios), while a handful of protocols are playing out the stock playbook. But the vast majority of assets in the market fit neither.

To sort out which category a project belongs to, you need a map. This map contains three categories, two of which are smaller in scale.

The Litmus Test

How do you sort millions of tokens into these three categories? Don't trust market data websites that classify projects based solely on their promotional intentions. Instead, ask two questions:

• Does the token actually receive revenue distributions (such as fees, buybacks, or burns)?
• Are the relevant parties honest and transparent about the nature of the asset?

The second question sounds somewhat subjective, but it can be made concrete: delete the project's roadmap and see what remains.

1. If everything stays the same, you're holding a "meme coin." Dogecoin is still fun, Bitcoin is still digital gold, and Monero and Zcash are still (in some sense) privacy coins. People hold these tokens usually out of ideology, narrative, or humor, rather than relying on a roadmap—some projects don't even have one. Ironically, this makes meme coins the purest assets in crypto.
2. If nothing remains, you're holding an abandoned project/vaporware. The promise itself was the product, such as "banks will adopt it" (or similar rhetoric).
3. If cash flow remains, you're holding one of the few (perhaps only around fifteen) true business entities in crypto. To be clear, deleting the roadmap would indeed harm these projects, but it wouldn't kill them. Without future HIPs (improvement proposals) as support, HYPE would be significantly diminished. After all, HIP-3 went from a line on the roadmap to ultimately facilitating the first licensed S&P 500 perpetual contract in about a year (more on this later). While the growth premium would shrink, the trading platform would still generate profits continuously while you sleep.

A roadmap built on cash flow is fundamentally different from one built on nothing. Old-school investors have always been willing to pay a high premium for growth, provided that growth is anchored to a real business entity.

The beauty of this test is that you don't need to delve into others' intentions or argue with the "bag-holding army" about whether partnerships are real. Just strip away all the empty promises and see what's left.

In other words: in "meme coins," the price contains no promise component; in real businesses, promises account for a portion; and in "vaporware projects," the price is entirely supported by promises. These are three distinct categories, corresponding to three completely different playbooks.

Category One: Crypto Businesses

These protocols earn fees from products people actually need and return those fees to token holders. Representative projects include: Hyperliquid, Pump Fun, Lighter, Aave, Ethena, and Sky. From another angle, they are like shares of profitable public companies executing buyback programs. This is the path of crypto converging toward traditional finance.

Hyperliquid remains the exemplar of this model. Its mechanics are as follows:

• The Assistance Fund extracts approximately 97% of protocol fees and buys HYPE tokens on-chain, with cumulative purchases exceeding $1.3 billion.
• As of late August, yields generated from the platform's idle USDC reserves are also being used for the same buyback operations.

Hype Assistance Fund

• From a macro perspective, according to the Financial Times, total crypto buybacks in 2026 are expected to reach $638 million, with about 90% coming from Hyperliquid and Pump Fun alone.

When traditional investors enter, they bring discounted cash flow (DCF) models. Now, there are finally crypto assets to which such models can actually be applied for valuation.

However, there are two caveats.

First: the analogy of crypto assets to stocks can break down precisely at the most critical moment. These "earnings" typically come from trading fees, which are cyclical. During market downturns, trading volume collapses, and valuation multiples compress simultaneously; even a good business can see its token price draw down by more than 60%. HYPE was priced at $22 earlier this year. Therefore, when evaluating these assets, you should reference "cross-cycle" fee revenue rather than peak annualized earnings.

Second: beware of "pseudo-Category One" projects: those dressed in the guise of "revenue" through incentives, such as trading volume generated by point farming, or takers subsidized by token emissions. To be fair, almost all projects adopt this approach in their early stages (Hyperliquid also used a points mechanism during its cold start). Those that withstand the test and retain users will ascend to "Category One"; those that are short-lived will ultimately join the ranks of countless scams and farces.

Category Two: Honest "Memes"

No revenue, no reliance on a roadmap, no bluffing—completely fine. The value of Category Two assets depends entirely on public consensus, and the public knows it. This self-awareness is the core; ironically, if judged by "roadmap" standards, they become the purest assets in crypto. This category includes two major asset types: yes, Bitcoin and Dogecoin are in the same category. Before you object, read the next paragraph.

Non-sovereign store-of-value (SoV) tokens (such as BTC, ZEC, XMR): "meme" assets with monetary visions. Saying they have no roadmap is somewhat of an overgeneralization, but in reality, their roadmaps focus primarily on improving security and usability, not on advertising on the Las Vegas Sphere.

Money is the oldest and most successful "meme" in human history (perhaps except religion); gold has followed the "everyone agrees it has value" playbook for 5,000 years without ever being asked to hold an earnings call. Boomers hold gold not for cash flow, but as a ballast asset whose value is supported by capital flows, scarcity, and the logic of currency debasement. This is the path of gold's "aging," and Bitcoin has already completed the entire process: the establishment of the ETF system, corporate adoption into treasury reserves, and mandatory institutional allocation requirements. The asset itself hasn't changed; only the holder base has. ZEC and XMR are in a somewhat delicate position, because "privacy" is precisely what a system under full surveillance and fully penetrated by the "boomer" financial system cannot provide. This is why ZEC's astonishing rally this cycle has followed its own rhythm rather than Bitcoin's. These assets will rely more on narrative-driven demand and absorb capital spillover from major coins like BTC, ETH, and SOL, as well as fiat funds trying to escape wealth confiscation mechanisms.

To be clear, calling them "meme" assets is by no means derogatory. This is where I part ways with those who cling to "DCF valuation": an honest monetary "meme" asset, as long as it has an institutionalization path or a sufficiently strong narrative, is absolutely worth investing in.

Regarding "attention tokens" (such as DOGE, PEPE, and various "shitcoins"/meme coins): they belong to the same category but have different ambitions: some want to become money, while others aim to create fun or viral spread.

The key to positioning these assets is that they have never embarked on the path of "institutionalization/mainstreaming": they neither generate cash flow like stocks nor possess a credible monetary premium like gold. This doesn't mean they can't be traded; they are more like entertainment products. Of course, for participants willing to gamble, that's perfectly fine. Personally, I occasionally participate, but it's only a secondary focus, and position sizes are much smaller than the mainstream assets I focus on daily.

The safest strategy for trading these is to buy leading coins in the "late early stage" of a trend and hold with the trend. While this approach makes it hard to achieve thousand-fold returns, it is indeed a profitable path; however, as with many things in trading, it's easier said than done.

Within this category, there are several assets I favor. BTC and ZEC have been discussed many times. As for pure meme coins, although I have a few favorites, I won't give specific recommendations—the choice is yours to discover your preferred animal avatar coins or emerging hotspots.

Category Three: Vaporware / Fake Hype

Most projects fall into this category. They are essentially the same "nothingness" behind Dogecoin, minus the honesty and humor. Applying the "three-factor" theory mentioned earlier: their prices are entirely built on empty promises. So-called "vaporware projects" are essentially dressed in the guise of "Category One" assets but lack the self-awareness of "Category Two" assets. These projects have neither a realistic hope of gaining a monetary premium nor the ability to generate future cash flow.

However, merely identifying something as "fake hype" or a "scam" does not constitute a trading strategy. This is where most people stumble. Identifying a project as vaporware does not mean you can "short it for free money"; because in the short and medium term, price has little to do with intrinsic value and is mainly determined by market structure and positioning:

1. Only a small fraction of the total supply is actually circulating and traded. Years of "bag holders" hold large amounts of dormant chips at high costs, and they won't sell on the initial price rise.
2. Thin order books above and scarce spot borrowing resources drive shorts into perpetual contracts en masse. Short liquidations (or eventual forced closures) become prey, and "bounty hunters" always come to harvest. When positioning becomes crowded and market sentiment is blindly optimistic, short squeezes are easily triggered: negative funding rates spike, and the squeeze becomes self-reinforcing. Dormant chips tend to wake up and sell only when the trend strengthens, which is ultimately what caps the upside.
3. Catalyst events (such as ETF filings, legal victories, exchange listings) can temporarily transform vaporware into liquid trading assets. This creates a fully tradable market environment, but it is fundamentally different from holding assets long-term.

If you are not an experienced derivatives trader, I strongly recommend ignoring this category of assets. Doing so reduces unnecessary noise and trims your watchlist to just over a dozen names. If you do trade them, especially using cross-margin mode, be extremely careful. Even some larger-cap projects have seen prices multiply several times in a short period.

Cross-Category Fusion: The "Pick-and-Shovel" Strategy

This is the core logic of the entire map, and the reason "Category One" and "Category Two" are closely linked: the cash flow of "Category One" largely originates from the activity of "Category Two."

Look at where the most profitable "fee machines" sit in the meme ecosystem: Pump Fun is the upstream creation factory, charging a "toll" on every token minted; Hyperliquid and Lighter are downstream, where the winners gather, with the deepest order books, the highest trading volumes, and the highest leverage. The casino doesn't need to know which table is hottest tonight—it makes money regardless.

This leads to the most valuable perspective shift in this article: the smart way to go long memes is to hold the infrastructure. You don't need to bet on which "dog" will win to capture the overall flow revenue, and the returns are real buybacks, not ethereal hope. I still occasionally trade individual meme tokens on short cycles, but my long-term "meme"-related holdings are actually HYPE, LIT, and PUMP. Go long the "house" (infrastructure), and don't linger at the gambling table.

On ETH and SOL

Someone will surely ask: "So which 'category' do ETH and SOL belong to?" That's a good question. They are rare special cases, and the answer is "both." L1 public chains are hybrids: both "Category One" business entities and embedded "Category Two" call options.

The price of ETH or SOL = value supported by fees + the probability the market assigns to it becoming money × the value of that money.

Once you view it from this angle, those seemingly schizophrenic, self-justifying debates make sense: SOL bulls cite REV (the "Category One" argument); ETH bulls cite "ultra-sound money," treasury buying (the "Category Two" argument), and BTC's security budget problem; while BTC maximalists attack ETH's centralization issues: both sides' bears are attacking the dimension where the other coin is stronger.

ETH is caught in an identity crisis: it is priced as money, yet scrutinized by old-school investors like a business company that needs value capture capabilities. In this framework, BTC is in a state where the option has been fully exercised: pure money, with no attached business operations; frankly, precisely because it lacks this identity confusion, it has received a better reception in public opinion.

In short, don't force these hybrid assets into a single category. Price the option component, and honestly assess which part of the valuation you are paying for when buying. You can trade them like "animal pictures" (NFTs): based on attention and capital flows, rather than clinging to dogma like a religious zealot. When Tom Lee starts buying ETH, there is still an easy profit opportunity. One final point: the "non-sovereign store of value" thesis that initially drew me into this industry has been repeatedly battered over the past few years, leaving early participants increasingly apathetic or disengaged—but that's another topic.

Operational Strategy: Cyclical Holdings and Short-Term Plays

All of the above ultimately boils down to a key distinction in portfolio management, and it's the question people ask most often. There are two main types of long positions in crypto, and confusing them often leads investors through a "wealth roller coaster" (i.e., making money first, then losing it, and ending up with nothing).

"Cyclical holdings" are assets that can span complete multi-year cycles; the criterion today can be summed up in one sentence: the asset must be on one of the two paths of "mainstreaming." On the "stock path" are HYPE, LIT, and PUMP; on the "gold path" are BTC and ZEC. The "inflation hedge/fiat debasement hedge" investment logic doesn't look at the "Fear and Greed Index," nor does it care about any absurd or chaotic on-chain drama. For these assets, you either must size positions to withstand drawdowns, or you must have sharp insight into reversal timing to hedge or short appropriately (of course, easier said than done).

"Short-term plays" cover all other assets, and their holding periods are far shorter than people imagine. Historically, even the hottest meme coins often only trend for one or two quarters. The strongest counterexample is PEPE, but even so, it crashed more than 80% before making new highs. This means even such an "exception" is better suited to swing trading (in and out quickly) rather than long-term holding.

The conclusion is: for "attention-driven tokens," adopt a short-term play strategy. As for "vaporware," if you must touch it, it's best to enter near the end of the cycle, and always remember what "the bell ringing" (market top signal) means. My complete operational strategy for meme coins has only two points:

Trade the tokens themselves on a short-term basis;

Hold the "casino" (i.e., the related platforms/ecosystems) cyclically.

There is also one habit to abandon: waiting for Bitcoin's "breakout." The old market logic held that BTC leads and altcoins follow, so investors habitually timed entries based on BTC's explosive moves. In this cycle, assets with their own demand drivers no longer need to wait in line, and I have concrete evidence at hand.

Before continuing, a word of caution: remember that the market structure has not changed since October 10—one could even argue it may have gotten worse. Avoiding excessive leverage on altcoins remains critical.

Empirical Analysis

I promised to provide empirical evidence earlier, and now I'll deliver. Dispersion is no longer just a prediction; it has already happened in plain sight. HYPE was at $22; LIT was around $0.8; ZEC had already bottomed near $250 months before BTC made any move. And when BTC finally had its first real upward impulse last month, all three of these coins had already roughly tripled from their yearly lows. While it's normal for strong altcoins to bottom or show relative strength before BTC ultimately bottoms, gains of this magnitude are rare. Many people missed the entry because "BTC's chart looked bad."

To illustrate this more precisely, I want to emphasize: the lows and upward impulses are no longer as highly synchronized as they used to be. If crypto were still viewed as a single asset class, such price action would be impossible: all assets bottoming in sync, collectively waiting for the broad market (index) signal, and timing altcoin entries based on BTC's chart. The reality is that assets with independent demand drivers started moving ahead of the entire market.

Therefore, for the upcoming cycle, I offer a falsifiable prediction: correlations within "categories" will exceed correlations between "categories." "Category One" trades on fee multiples, "Category Two" on capital flows and monetary narratives, and "Category Three" on float/derivatives mechanics and late-cycle sentiment; as the market's ability to distinguish between "categories" improves, the "everything pumps" beta trade will continue to decay. There are now various revenue dashboards, and platforms like FT audit buyback data. Choose the track that suits you and adopt the corresponding strategy. You can completely ignore the "categories" that don't interest you or don't match your skill set.

The Great Unlock

I believe perpetual platforms like Hyperliquid and Lighter will be able to operate legally and compliantly in the United States and open to users by 2027 at the latest. This view is actually not as unconventional as it sounds. In fact, by August 19, it was no longer even a "non-consensus" view: at a high-level crypto industry meeting at the White House, the President personally named the exchange and stated that CFTC Chairman Mike Selig is working to "bring Hyperliquid to the U.S. market in a fully compliant and legal manner." Boosted by these remarks, the HYPE token price surged to a new all-time high. The market's reaction on the other side was even more telling: in the same trading session, Cboe (Chicago Board Options Exchange) shares fell as much as 6.1%, and CME (Chicago Mercantile Exchange) shares dropped as much as 3.4%.

• The CLARITY Act passed the House by a vote of 294 to 134, cleared the Senate Banking Committee, and is scheduled for its first procedural vote in the Senate on September 15.
• The SEC and CFTC issued joint classification guidance in March, and tokenized trading rules for Nasdaq and NYSE were also approved in the spring.
• Chairman Atkins has repeatedly indicated that an "innovation exemption" policy is forthcoming, suggesting that even if the CLARITY Act ultimately fails to pass, there remains a bullish case.

If the cloture vote fails, the bill's legislative progress will be blocked; but the exemption pathway and the CFTC's stance do not depend on Congress, so this does not mean it's completely dead. I expect CLARITY may pass during the "lame-duck" session after the midterm elections. (PANews note: refers to the session held by outgoing legislators during the transition period after new representatives have been elected but before they officially take office)

The infrastructure is ready, awaiting only regulatory approval. Before approval, some adjustments may be needed, or perhaps not. But either way, everything is within reach; I believe the progress is faster than many expect.

Summary

For better or worse, the serious side of crypto is now deliberately becoming "boring": cash flow, dividend policies, licensed indices, and even something like S&P (S&P) perpetual contracts. Crypto was born to escape a certain established framework, only for that framework to become its final destination—a deeply ironic outcome.

I neither mourn this nor can I change it. This path was chosen years ago. When market heat is high, I will still "rent a table and join in," but the assets I hold throughout the cycle all pass the same test: even if price action still carries the violent volatility and "wicks" characteristic of early crypto, traditional "boomer" investors can still underwrite and price them using the same logic they apply to stocks or gold.

Quality assets become "boomerified," meme assets remain "Gen Z-ified," and those holding "vaporware projects" continue to struggle on the long road to "doomerification."

As for the taunt at the beginning of this article, it was always right—just aimed at the wrong target. Those savvy "boomer" investors were never ignoring crypto; they were simply filtering it through their own criteria: cash flow, growth rates, dividend policies—the metrics that can actually be underwritten. For years, the screen showed nothing. "Category One" is the first time assets have appeared that meet the screening criteria. So, the truly poor were never the boomers, who make up about 20% of the population yet own more than half of U.S. household wealth; it was those holding empty "roadmaps" with no actual execution.

This time, perhaps be a little kinder to the "boomer" generation that holds the purse strings. After all, if they don't come to take over the "hot potato" (crypto assets), then it may be us who ultimately have to learn to find joy in hardship and settle for (relative) poverty.