## Why Is the Cryptocurrency Market Crashing?

New blockchain projects like Monad, MegaETH, Tempo appear, but instead of being welcomed, they face a wave of fierce criticism. This is a completely new phenomenon in this field.

In previous years, new chains typically received two reactions: either enthusiastic applause or silent neglect. Such attacks were never seen before. But this year, especially after 2023, everything has changed.

### "Financial Skepticism" — A New Market Psychology

The dominant sentiment in the market today can be described as "financial skepticism." Not everyone is completely rejecting cryptocurrencies, but they have a more nuanced understanding: these tokens might not be entirely worthless, but they are overvalued — perhaps only one-fifth or one-tenth of their actual value.

This perspective leads to vague expectations: Wall Street will soon realize this, and when they expose the truth, everything will collapse.

Therefore, many analysts are trying to build optimistic valuation models based on P/E, gross profit margin, or DCF. Solana even proudly applies the REV (Real Economic Value) index as evidence of reasonable valuation. But almost immediately after REV was officially adopted, its value plummeted — even though SOL's performance was better than REV itself.

Later, Hyperliquid launched with a real revenue model, buyback mechanisms, and calculable P/E ratios. The community began to shout: "This is a token with real profits! Ethereum and Solana don't make real money at all."

### Fundamental Mistake: Confusing "Company" and "Network"

But this logic misses an important point: **the initial reason people invested in ETH and SOL was not for this.**

Layer 1 does not have profit margins like exchanges. If you want to profit from fees, you could have bought BNB or COIN from the start. Owners of ETH and SOL are not because they are "profit-making companies," but because they are **networks**. They are the platforms for the entire ecosystem.

When people start debating whether a blockchain has "real profits" or not, they are applying linear thinking — Wall Street's mindset — to a phenomenon that is entirely exponential.

### Lessons from Amazon: Linear Thinking vs. Exponential Growth

In the early 2000s, top e-commerce investors focused on discussing: how big could this market get? Is it only for electronic products? Is it suitable for women? What about the food industry?

These were all reasonable questions with linear thinking. And they were all completely wrong.

E-commerce eventually sells everything. The target users are the entire world. But no one believed this at the time.

Look at Amazon's net profit chart from 1995 to 2019. Over 22 years, the company hardly made a profit. Every year, there were critics, short-sellers, calling it a Ponzi scheme that would never turn a profit.

Traders argued that Amazon's P/E was wrong — but they completely missed the point. Because Amazon's growth is not linear; it is exponential. And with exponential growth, no matter what price you buy at, or when, your level of optimism is never enough.

Whether you buy Amazon stock at $100 or $1, over the next 10 years, every day you are not optimistic enough.

### Why Cryptocurrency Is Exponential

When entering the crypto industry, no one used these things. On-chain TVL was only a few million dollars. Now, tens of billions of dollars are traded on-chain every day.

I remember when Tether issued up to 1 billion dollars, The New York Times called it a Ponzi scheme about to collapse. Now, the stablecoin issuance scale has exceeded 30 billion dollars, under Fed supervision.

**I believe in exponential growth because I have experienced it.**

Ethereum just turned 10 years old. Looking back at Amazon's stock performance in its first 10 years — a decade of sideways movement. But the company persisted, and holders persisted longer than sellers.

### Openness Is the Key to Victory

Financial assets crave freedom, openness, and connectivity. Blockchain technology turns financial assets into transferable formats, making sending USD as simple as sending a PDF.

It creates a 24/7 operational global financial network, fully open. This will definitely win because **openness always wins**.

The current giants will oppose, governments will threaten, but ultimately they will concede to the speed of adoption, innovation, and efficiency that this technology brings. That’s what the Internet did to all traditional industries.

Blockchain will cause a similar trend to threaten the entire financial and monetary system. Just give it time — everything will be disrupted.

### Conclusion: Reject Skepticism, Believe in Exponential Growth

Applying P/E ratios to smart contract blockchains is a **betrayal of exponential growth**. It means you are classifying this industry as linear growth; that you believe the crypto penetration rate below 1% is the ceiling; that you think it’s just a small corner of the world.

But if you believe in exponential growth, if you look far enough ahead, all valuations are still low.

Humans always overestimate what will happen in two years but underestimate what will happen in ten.

This is your "e-commerce era." When you grow old, you will tell the next generation: "When big disruptions happen, I was there."