Wintermute's reflections after attending the conference in Hong Kong: Beyond mainstream assets, tokens face an identity crisis

Author | Wintermute Ventures

Translation | DeepSea TechFlow

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The Wintermute Ventures team attended Hong Kong Consensus and wrote this observation report, providing a market sentiment scan from a market maker perspective.

The cooling of the market is now a consensus, but the value of this article lies in explaining why — — narrative failure, token identity crisis, capital rotation into AI stocks. These signals, when combined, point not to a short-term bear market but to a recalibration of industry paradigms.

After returning from Hong Kong Consensus, the Wintermute Ventures team observed that the most consistent signal from the conference was: market sentiment is becoming cautious, and almost no one is willing to pretend they know where the next obvious wave will come from. The good news is that conversations are becoming more concrete, and it’s easier to distinguish between genuine signals and cyclical narratives.

What did we hear?

Sentiment is declining, clear catalysts are hard to find

Most people do not see obvious near-term catalysts capable of reversing the sentiment, and many investors find it difficult to identify the next major wave native to crypto — — aside from a few obvious sectors. Founders are feeling this shift. Several founders expressed a wish to raise funds earlier because the current thresholds are higher, and investors need to see more traction before committing.

Signs of capital rotation into AI stocks are evident, especially in Asia

Many “liquid funds” are actually family offices and proprietary capital, not strictly regulated funds. These types of capital have shifted momentum into AI, using publicly traded AI stocks as the default new trading targets. But this appears more like momentum trading rather than a fundamental change in crypto investment logic.

Outside mainstream assets, tokens are facing an identity crisis

Beyond major assets, almost no one is excited about altcoins. The deeper issue is that tokens have lost their clear identity as credible value accumulators and incentive alignment mechanisms. Token issuance is increasingly seen as disruptive, as mercenary-like farmers’ voices are noisy and quickly dissipating, making it difficult for issuers to convey lasting value or alignment signals. A common discussion among founders is to stop copying old scripts and instead design for genuine users and long-term alignment.

Opportunities are focused on fundamentals and defensiveness

The market is clearly leaning toward businesses with revenue, licenses, and distribution moats. There is still a belief that crypto startups can deliver ten times better returns than traditional tech because traditional tech has become slower and more consensus-driven. Meanwhile, standing out in crowded sectors is becoming more difficult: yield packaging products are considered saturated and hard to differentiate; prediction markets still have new entrants but lack innovation; options markets remain interesting, but many believe infrastructure and edge dynamics are not yet ready.

Latin America is repeatedly mentioned as an attractive region

Latin America has shown clear product-market fit and is moving toward stricter regulation. The winners will be teams capable of crossing regulatory boundaries country by country and replacing traditional banking tracks. This sector is already crowded, and differentiation is no longer just about stablecoins but a comprehensive reflection of regulatory ability, connectivity, and execution.

Despite weakening sentiment, people have not given up on crypto. Expectations have simply increased. Investors now demand real evidence (which naturally involves self-healing). Founders face pressure to focus on distribution and acquiring genuine users. Tokens face stricter scrutiny on value capture and incentive alignment. From Wintermute Ventures’ perspective, we remain optimistic. These resets are tough, but healthy — — and this is precisely how companies led by teams with long-term conviction are forged with the greatest resilience.

Other recent views from Wintermute:

Wintermute founder Evgeny Gaevoy stated in the Crypto Playbook podcast under Fortune magazine that the crypto industry has deviated from its cypherpunk roots, shifting toward a “price appreciation” narrative; although stablecoins are the main application, they reinforce dollar dominance, diverging from the early vision of building a decentralized parallel system. He emphasized that the future of crypto should return to cypherpunk spirit rather than fully integrating into Wall Street. He also pointed out that while public chains like Ethereum have over $120 billion in locked value, real decentralized applications are still limited, and enterprise on-chain pilots are far below traditional financial economic activity.

Wintermute announced the launch of tokenized gold OTC trading services for institutional clients, supporting Pax Gold (PAXG) and Tether Gold (XAUT), providing algorithm-optimized spot execution for counterparties, and supporting bilateral quotes and hedging with USDT, USDC, fiat, and mainstream crypto assets. CEO Evgeny Gaevoy said that the on-chain gold market’s value increased from about $2.99 billion to $5.4 billion in three months, and the company expects this market to grow to approximately $15 billion by 2026.

Gaevoy also wrote that the competition between public chains like SOL and ETH is meaningless because nothing truly important is happening on-chain right now, and no one is winning. Stablecoins remain fundamentally centralized intermediaries; existing blockchains, especially perpetual swap exchanges, cannot scale to CME levels due to risk engine bottlenecks; Bitcoin and other crypto assets have lost their way in “price appreciation,” with institutions replacing idealism, and only Vitalik remains committed to the original vision; additionally, token designs (buybacks, locking, airdrops) have completely collapsed. Nonetheless, he remains optimistic about the industry, believing the market is shaking off “Trump-driven hype,” cleansing speculative tourists, and leaving behind true believers.