Why Did Market Sentiment Completely Collapse in 2025? Decoding Messari's Ten-Thousand-Word Annual Report

By: blockbeats|2025/12/23 10:30:01

Original Title: "Why Did Market Sentiment Completely Collapse in 2025? | Interpreting the Messari Ten-Thousand-Word Annual Report (Part One)"

Original Source: Merkle3s Capital

This article is based on Messari's annual report released in December 2025 The Crypto Theses 2026. The report is over ten thousand words long, with an official estimated reading time of 401 minutes. The information in this article is for reference only, does not constitute any investment advice or invitation, we do not take responsibility for the accuracy of the content, nor do we bear any consequences arising from it.

Introduction | This Is the Worst Year for Sentiment, But Not the Most Fragile Year for the System

If we only look at sentiment indicators, the crypto market in 2025 could almost be sentenced to "death penalty".

Why Did Market Sentiment Completely Collapse in 2025? Decoding Messari's Ten-Thousand-Word Annual Report

In November 2025, the Crypto Fear & Greed Index dropped to 10, entering the "extreme fear" zone.

In history, there have been few moments when sentiment has dropped to this level:

- March 2020, liquidity stampede triggered by the global pandemic

- May 2021, cascading liquidations due to leverage

- May-June 2022, systemic collapse of Luna and 3AC

- 2018-2019, industry-level bear market

These periods all have one thing in common: the industry itself is failing, and the future is highly uncertain.

But 2025 does not fit this description. There was no top exchange misappropriating user funds, no Ponzi projects with multi-billion dollar market caps dominating the narrative, the total market cap did not fall below the previous cycle high, stablecoin volumes instead hit a historical high, and the regulatory and institutionalization processes continued to advance.

On a "factual level," this was not a year in which the industry was collapsing. However, on a "perception level," it may have been the most painful year for many practitioners, investors, and longstanding users.

Why Did Sentiment Collapse?

Messari started its report with a highly impactful comparison:

If you were allocating crypto assets in a Wall Street office, 2025 might have been the best year since you entered this industry. But if you were staying up late watching charts on Telegram or Discord, searching for Alpha, this was probably the year you most missed the "old days."

Same market, two almost completely opposite experiences. This is not just a random emotional swing, nor a simple bull-to-bear transition, but a deeper structural misalignment: the market is changing participants, yet most people are still using old identities to engage with the new system.

This Is Not a Market Recap

This article is not intended to discuss short-term price trends or attempt to answer "will it go up next."

It is more like a structural explanation:

· Why, as institutions, funds, and infrastructure continue to strengthen,

· has market sentiment slid to historic lows?

· Why do many feel they've "picked the wrong track," yet the system itself has not failed?

In this hundred-thousand-word report, Messari chooses to start from an extremely basic question: If crypto assets ultimately are a form of "money," then who truly deserves to be treated as money?

Understanding this is key to understanding the full-scale meltdown of market sentiment in 2025.

Chapter One | Why Is Sentiment Abnormally Low?

Looking only at the outcome, the sentiment collapse in 2025 is nearly "incomprehensible."

In a scenario where there was no exchange platform rug pull, no systemic credit collapse, and no core narrative bankruptcy, the market provided feedback close to historic lows in sentiment.

Messari's assessment is very straightforward: this is an extreme case of "decoupling of emotion from reality."

1. Sentiment Indicators Have Entered "Historic Anomaly Territory"

The Crypto Fear & Greed Index dropping to 10 is not a normal pullback signal.

Over the past decade, this value has only appeared in very few moments, and each time it did, it was accompanied by a real and profound industry-level crisis:

· Financial System Breakdown

· Credit Chain Collapse

· Market Doubt About the "Existence of the Future"

However, none of these issues arose in 2025.

There was no core infrastructure failure, no mainstream assets liquidated to zero, and no systemic event significant enough to shake the industry's legitimacy. From a statistical standpoint, this sentiment reading does not match any known historical template.

2. The Market Did Not Fail; It Was the "Individual Experience" That Failed

The collapse of sentiment did not come from the market itself but from the subjective experiences of participants. Messari repeatedly emphasized in the report a fact that had been overlooked: 2025 was a year in which institutional experiences far surpassed retail experiences.

For institutions, this was an extremely clear and even comfortable environment:

· ETFs provided a low-friction, low-risk allocation channel

· Digital Asset Treasuries (DAT) became stable, predictable long-term buyers

· Regulatory frameworks started to clarify, and compliance boundaries gradually became visible

But for a large number of participants under old structures, this year was unusually harsh:

· Alpha significantly decreased

· Narrative rotation failed

· Most assets long-term underperformed BTC

· The relationship between "effort" and "result" was completely broken

The market did not reject people; it just changed its reward mechanism.

3. "Not Making Money" Was Misinterpreted as "Industry Decline"

The true trigger of sentiment was not the price drop but a cognitive gap. In multiple past cycles, the implicit assumption in crypto was: as long as you were diligent enough, early enough, and aggressive enough, you could achieve outsized returns.

However, in 2025, this assumption was systematically shattered for the first time.

· Most assets no longer received a premium for their "storytelling"

· L1 ecosystem growth no longer automatically translated into token returns

· High volatility no longer meant high returns

As a result, many participants began to fall into a misconception: if I didn't make money, then the entire industry must be in trouble. Yet, Messari's conclusion was precisely the opposite: the industry is becoming more like a mature financial system rather than a machine that continues to generate speculative returns.

4. The Essence of Emotional Breakdown is Identity Misalignment

Considering all phenomena, the implicit answer given by Messari is only one: The emotional breakdown in 2025 is fundamentally an identity misalignment.

· The market is tilting towards "asset allocators," "long-term holders," and "institutional participants"

· However, a large number of participants still exist in the identity of "short-term Alpha seekers"

When the incentive logic of the system changes, and participation does not adjust synchronously, emotions will inevitably collapse first. This is not a matter of individual capability but the friction cost of role transition in the era.

Summary | Emotions Do Not Tell You the Truth

The market sentiment in 2025 truly reflects the participants' pain but does not accurately reflect the state of the system.

· Emotional breakdown ≠ Industry failure

· Intensified pain ≠ Value disappearance

It simply indicates one thing: the old way of participation is rapidly becoming obsolete. Understanding this point is a prerequisite for entering the next chapter.

Chapter 2 | The True Root of Emotional Breakdown: The Monetary System is Failing

If we only stay at the market structure level, the explanation of the emotional breakdown in 2025 is still incomplete. The real problem is not:

· Alpha diminishing

· BTC being too strong

· Institutions coming in

These are all superficial phenomena. A deeper judgment given by Messari in the report is: The collapse of market sentiment fundamentally stems from a long-overlooked fact—the monetary system we are in is continually pressuring savers.

A Must-Be-Confronted Chart: Global Government Debt Out of Control

This chart is not a decorative macro background but the logical starting point of the entire Cryptomoney argument.

Over the past 50 years, the government debt-to-GDP ratio of major global economies has shown a highly consistent and almost irreversible upward trend:

· US: 120.8%

· Japan: 236.7%

· France: 113.1%

· UK: 101.3%

· China: 88.3%

· India: 81.3%

· Germany: 63.9%

This is not the result of governance failure in any one country, but a common outcome spanning institutions, political structures, and stages of development. Whether in democratic countries, authoritarian states, advanced economies, or emerging markets, government debt has outpaced economic growth in the long run.

What this chart truly illustrates is not "high debt," but "savings being systematically sacrificed"

When government debt grows faster than economic output over the long term, the system can only maintain stability through three means:

1. Inflation

2. Long-term low real interest rates

3. Financial repression (capital controls, withdrawal restrictions, regulatory intervention)

Regardless of which path is taken, the ultimate cost will be borne by the same group of people: savers. Messari used a highly restrained but weighty phrase in the report: When debt grows faster than economic output, the costs fall most heavily on savers. In other words, when debt outpaces growth, savers are destined to be the sacrificed party.

Why will sentiment collapse in 2025?

Because in 2025, an increasing number of participants will clearly realize this for the first time.

Prior to this:

· "Inflation is just temporary"

· "Cash is always safe"

· "In the long run, fiat is stable"

And reality is continuously refuting these assumptions.

When people realize:

· Hard work ≠ Wealth preservation

· Saving behavior itself is continually eroding

· Asset allocation difficulty has significantly increased

The collapse of sentiment is not from Crypto, but from a shaken confidence in the entire financial system. Crypto is just the first place where this impact is perceived.

The significance of Cryptomoney is not in "higher returns"

This is also a point that Messari emphasizes repeatedly but is easily misinterpreted. Cryptomoney does not exist to promise higher returns.

Its core value lies in:

· Predictable rules

· Monetary policy not subject to arbitrary changes by a single entity

· Assets that can be self-custodied

· Value that can be transferred across borders without permission

In other words, it doesn't provide a "get-rich-quick scheme," but rather: a reempowerment of individual currency choice in a high-debt, low-certainty world.

Emotional Collapse is Actually a Form of "Awakening"

When you juxtapose this debt chart with the market sentiment of 2025, you'll arrive at a counterintuitive conclusion: Extreme emotional pessimism doesn't signify industry failure but instead signals an increasing realization that the issues in the old system are indeed real.

Crypto's issue has never been "uselessness." The real issue is: It no longer creates effortless outsized returns for everyone.

Summary | From Emotion, to Structure, to the Currency Itself

This chapter tackles a fundamental question: Why, in the absence of a systemic collapse, did market sentiment plummet to historic lows? The answer isn't in the candlestick charts but in the currency's structure.

· Emotional collapse is a symptom

· Paradigm rupture is a process

· Monetary system imbalance is the root cause

And this is precisely why Messari chose to start this entire report from "money" rather than from "applications."

Chapter Three | Why Only BTC Is Regarded as "Real Money"

If you've read this far, you might easily raise a question: If the issue lies within the monetary system, why is BTC the answer and not something else?

Messari's judgment in the report is exceptionally clear: BTC is no longer on the same competitive plane as other crypto assets.

1. Money is Not a Technical Issue, but a Consensus Issue

This is the first key to understanding BTC. Messari repeatedly emphasizes in the original text a fact that engineers easily overlook: Money is a social consensus, not a technical optimization problem. In other words:

· Money isn't about being the "fastest"

· Not about being the "cheapest"

· Nor is it about being the "most feature-rich"

It's about being perceived as a long-term, stable store of value. From this perspective, Bitcoin's triumph is not mysterious.

2. Three Years of Data, and the Answer is Already Clear

From December 1, 2022, to November 30, 2025:

· BTC has appreciated by 429%

· Market cap has grown from $318 billion to $1.81 trillion

· Entered the top ten global asset ranking

More importantly, the relative performance: BTC.D has grown from 36.6% to 57.3%. In a period that theoretically should have seen an altcoin frenzy, funds have continued to flow back to BTC. This is not a fluke of a market cycle; this is a market reclassifying assets.

3. ETFs and Corporate Treasury Strategies are Essentially Formalizing Consensus

Messari's assessment of ETFs is very restrained, yet the conclusion is profound. A Bitcoin ETF is not merely about "new buying pressure"; what it truly changes is: who is buying + why they are buying + how long they can hold

· An ETF transforms BTC into a compliant asset

· A Corporate Treasury Strategy makes BTC a part of a company's balance sheet

· National reserves elevate BTC to a "strategic asset" level

When BTC is held by these actors, it is no longer seen as: a high volatility asset that can be dumped at any time, but rather as: a currency asset that must be held long term and cannot be easily mismanaged. Once money is treated this way, it's hard to revert.

4. Why the More "Boring" BTC Gets, the More It Resembles Money

This might be the most counterintuitive point of 2025:

· BTC has no use case

· No narrative shift

· No ecosystem story

· There is not even any "new thing"

But precisely because of this, it meets all the characteristics of "money":

· Does not rely on future promises

· Does not need a growth narrative

· Does not require ongoing team delivery

It just needs to not be wrong.

And in a high-debt, low-certainty world, "not being wrong" itself is a scarce asset.

5. BTC's Strength is Not a Market Failure

Many people's pain comes from a misconception: "BTC's strength means the market is not right." Messari's assessment is quite the opposite: BTC's strength is the market becoming more rational.

When the system begins to reward:

· Stability

· Predictability

· Long-term credibility

Then all strategies relying on "high volatility equals high returns" will increasingly appear painful. This is not an issue with BTC; it is an issue with the method of participation.

Summary | BTC Didn't Win, It Was Chosen

BTC did not "beat" other assets. It was simply repeatedly validated by the market in an era where the monetary system was continuously failing as:

· The least explanatory asset

· The least reliant on trust asset

· The asset least in need of future commitments

This is not the result of a single market cycle but a confirmation of a role.

Chapter 4 | When the Market Only Needs One Kind of "Money," the L1 Story Begins to Malfunction

After confirming that BTC has been chosen by the market as the "main Cryptomoney," one question cannot be avoided: if money already has an answer, what is left for Layer 1? Messari did not directly provide a conclusion, but after reading through this section, a trend is very clear: L1 valuation is being forced to transition from "future narratives" back to "real-world constraints."

1. A Harsh but True Fact: 81% of Market Value is in the "Money" Narrative

By the end of 2025, the entire crypto market cap is about $3.26T:

· BTC: $1.80T

· Other L1: ~$0.83T

· Other Assets: <$0.63T

Overall, approximately 81% of the cryptocurrency asset market cap is considered "money" or "potential money" by the market in terms of pricing. What does this mean? It means that the valuation of L1 is no longer based on the pricing logic of being an "application platform" but rather on the pricing logic of "whether it qualifies as money."

2. The Issue Is: Most L1s Are Not Worthy

The data provided by Messari is very straightforward and quite stark.

After excluding outliers like TRON and Hyperliquid with unusually high revenue:

· The overall revenue of L1s is continuously declining

· But the valuation multiple is continuously increasing

The adjusted P/S ratios are as follows:

· 2021: 40x

· 2022: 212x

· 2023: 137x

· 2024: 205x

· 2025: 536x

Meanwhile, the total L1 revenue during the same period is:

· 2021: $12.3B

· 2022: $4.9B

· 2023: $2.7B

· 2024: $3.6B

· 2025 (annualized): $1.7B

This is a discrepancy that cannot be reasonably explained by "future growth."

3. L1s Are Not "Undervalued" but "Reclassified"

Many people's anguish stems from a misunderstanding: "Has the market mistakenly underestimated L1s?" Messari's assessment is quite the opposite: the market has not underestimated L1s but has reduced their 'monetary imagination space.'

If an asset:

· Cannot function as a stable store of value

· Cannot be held long term

· And cannot provide a predictable cash flow

Then it ultimately only has one way to be priced: as a high-beta risk asset.

4. The Example of Solana Actually Says It All

SOL is one of the few L1s that outperformed BTC in 2025. However, Messari pointed out a highly impactful fact:

· SOL's ecosystem data grew 20–30 times

· Price only outperformed BTC by 87%

In other words: in order to achieve "significant alpha" against BTC, an L1 needs a order-of-magnitude ecosystem explosion. This is not due to "not trying hard enough," but because the reward function has been rewritten.

5. When BTC Becomes "Money," the Burden on L1s Becomes Heavier

This is a structural change that many people have not realized. Before BTC had a clear monetary status:

· L1s could tell a story of "becoming money in the future"

· The market was willing to prepay for this possibility

And now:

· BTC has solidified its position

· The market is no longer willing to pay the same premium for "second money"

Therefore, L1s face a tougher question: If you are not money, then what are you?

Conclusion｜The Issue with L1s is Not Competition, But Positioning

L1s did not "lose to BTC." What they lost in is:

· In the monetary dimension

· The market no longer needs more answers

And once the protection of the "money narrative" is lost, all valuations must realign with reality.

This is the direct source of the emotional breakdown of many participants in 2025.

Original Article Link

Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:

To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:

Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:

I. Clarify the essential attributes of virtual currency, Real-World Assets tokenization, and related business activities

(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.

The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.

A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.

（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.

Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.

II. Sound Work Mechanism

(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.

The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.

(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.

III. Strengthened Risk Monitoring, Prevention, and Disposal

(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.

(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.

(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.

(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.

（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.

（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.

（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.

（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.

IV. Strict Supervision of Domestic Entities Engaging in Overseas Business Activities

（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.

（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.

(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.

V. Strengthen Organizational Implementation

(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.

(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.

VI. Legal Responsibility

(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.

(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.

This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.

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This time there is no single triggering factor, but rather market anxiety about asset valuation, with many already skeptical of these valuations being too high, leading to investors choosing to retreat almost simultaneously.

Vitalik Discusses Ethereum Scaling Path, Circle Announces Partnership with Polymarket, What's the Overseas Crypto Community Talking About Today?

What was the most talked-about topic among foreigners in the last 24 hours?

Believing in the Capital Markets - The Essence and Core Value of Cryptocurrency

The core questions that make cryptocurrency truly interesting have yet to be answered at all

Polymarket's 'Weatherman': Predict Temperature, Win Million-Dollar Payout

They made a fortune by predicting the weather temperature. One made $1.11 million in a single trade, while another consistently earned tens of thousands of dollars.

$15K+ Profits: The 4 AI Trading Secrets WEEX Hackathon Prelim Winners Used to Dominate Volatile Crypto Markets

How WEEX Hackathon's top AI trading strategies made $15K+ in crypto markets: 4 proven rules for ETH/BTC trading, market structure analysis, and risk management in volatile conditions.

A nearly 20% one-day plunge, how long has it been since you last saw a $60,000 Bitcoin?

Over 580,000 traders were liquidated in this recent crash.

Raoul Pal: I've seen every single panic, and they are never the end.

Volatility is the price we pay for long-term compounding returns

Key Market Information Discrepancy on February 6th - A Must-Read! | Alpha Morning Report

1. Top News: Global Risk Markets Plunge Again, Bitcoin Drops to $60,000 Support Level, Silver Crashes 9.00% Intraday 2. Token Unlock: $W, $BERA, $AXS

2026 Crypto Industry's First Snowfall

When the compass of capital has clearly shifted, belief has become the cheapest and most extravagant thing.

The Harsh Reality Behind the $26 Billion Crypto Liquidation: Liquidity Is Killing the Market

The AI mega-capex cycle itself is transitioning from "liquidity injection" to "liquidity extraction," leading to a significant shortage of global financial capital.

Why Is Gold, US Stocks, Bitcoin All Falling?

Trust Crisis in Tech Stocks

Key Market Intelligence for February 5th, how much did you miss out on?

1. On-chain Funds: N/A 2. 24h Price Range: $HOLY MOLY, $WARD 3. Top News: After Multicoin Co-Founder Kyle Announced His Departure, the Crypto Community Sounded the Talent Drain Alarm

Wintermute: By 2026, crypto had gradually become the settlement layer of the Internet economy

The Internet has enabled information to flow freely across borders, platforms, and systems, but value has lagged behind.

Token Cannot Compound, Where Is the Real Investment Opportunity?

The next chapter in the crypto industry will undoubtedly be written by Crypto-empowered Stocks.

February 6th Market Key Intelligence, How Much Did You Miss?

China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk