Crypto market continues to be sluggish, where are marginal buyers

Original title:Where Are the Marginal Buyers?

Original author: Primitive Ventures

Original translation: Felix, PANews

Cryptosaturation and structural transformation

This cycle has clearly shown that the market has reached saturation not only in terms of capital, but also in terms of attention.

Global Google Trends data illustrate this. Only Solana's search popularity hit a new high. Despite the approval of ETFs, Bitcoin hit a new high, and political heated discussions caused by meme, the search popularity of Bitcoin, Ethereum and even Dogecoin has not returned to its peak level in 2021.

 Red: Ethereum Google Search Hot Blue: Solana Google Search Hot 

 Blue: Bitcoin Google Search Hot Red: Dogecoin Google Search Hot 

As attention drops, prices also fall. Most major assets still trade below the previous cycle's highs. This means: cryptocurrencies, as an asset, have reached saturation in mainstream perceptions, but as a currency, they have not been widely adopted.

This duality defines the current situation. Speculation is well known, but its practical use is still misunderstood. The next marginal buyer may not come for cryptocurrency speculation, but for infrastructure.

Player structure: The game is being cleared

To understand why even top-down narratives can’t maintain momentum, it’s necessary to understand who is still involved.

 Source: PV internal research 

Spot traders on centralized exchanges (CEX), once the pillar of retail investors' strength, have gradually faded out. As the CEX's sudden wealth effect gradually fades, the inflow of new users has stagnated. Worse, many existing users have either left or turned to more risky perpetual contract transactions. At the same time, the rise of spot ETFs quietly drew another batch of potential buyers. Centralized exchanges are no longer the default entrance.

Revenue miners who usually have a large scale of capital allocation are increasingly focusing on the chain. As on-chain earnings opportunities decrease and risk-adjusted returns decline, capital is turning to a more stable source of real-world income.

NFT and GameFi players, once a culturally driven by cryptocurrency adoption, are now basically marginalized. Some turned to memecoin, but the wave seemed to have reached its peak as the Trump craze faded, disappointing most participants.

Airdrop hunters, often seen as the most persistent group of on-chain participants, are now openly clashing with the project party over unfulfilled promises. Many people can't even cover the cost.

Looking at each user group, the trend is obvious: participation is declining, belief is weakening, and retail investors are leaving.

Critical point: Conversion stagnates

The problem is not only the fatigue of the existing user groups, but the conversion itself is also stagnant.

Top CEX serves about 400 million users (excluding duplicate users), but only about 10% of users convert into on-chain users (wallet users). Penetration has almost not changed since 2023; the industry has difficulty converting users from the custody level.

 Source: PV internal research 

Meanwhile, traffic on mainstream exchanges has continued to decline since the peak of the bull market in 2021, and even if Bitcoin hits a new high, traffic has not recovered. The conversion channels have not been expanded.

Binance traffic; data source: Semrush

 Coinbase traffic; data source: Semrush 

Worse, it may have hit the threshold for cryptocurrency perception at this time. According to a Consensys survey, 92% of respondents worldwide have heard of cryptocurrencies and 50% claim to know about it. Cognition is no longer a problem, interest is.

Moreover, the enthusiasm curve of retail investors is becoming flattened. In the last cycle, NFT and Dogecoin attracted a large number of users. In this cycle, even Trump’s memecoin cannot enter the mainstream. The curiosity that once promoted retail inflows is fading.

 Yellow: Dogecoin Google Search Hot Blue: NFT Google Search Hot Red: Trump meme Google Search Hot 

Slogan: The power of a mirage

The OM pull-up is a well-planned action: turning to the hottest RWA, forming alliances with UAE capital, reaching cooperation, promoting with the help of KOLs, and squeezing liquidity through a token economics reset.

 Source: PV internal research 

But despite the price soaring 100 times, no meaningful spot trading volumes appeared. OM lacks something that even the most perfect script cannot be fabricated: a true marginal buyer.

 OM transaction volume 

When centralized exchanges adjust perpetual contract leverage and market makers encounter internal friction, the system quickly collapses. A 95% drop followed, not due to coin spirals or loopholes, but because there was no buying at all.

OM is not an execution failure. It reflects a structural problem: In today's centralized exchanges, even if prices soar 100 times, it cannot stimulate new demand.

Fed quantitative tightening and dollar shortage

The structural change in buyer behavior cannot be understood from macro liquidity. Since 2022, the Fed has begun to significantly reduce its balance sheet, opening one of the most cautious quantitative tightening cycles in recent years.

The Fed's balance sheet peaked at nearly $9 trillion in the post-COVID-19 period, greatly stimulating global risk appetite through excess liquidity. But as inflation intensified, the Fed changed its strategy by drawing away reserves, tightening the financial environment, and curbing loose leverage that once fueled speculation in various risky assets, including cryptocurrencies.

This tightening not only slowed capital inflows, but also structurally limited the type of buyers that cryptocurrencies have always relied on: fast-moving, risk-taking speculators.

Structural Change: Where the next requirement may appear

If the next marginal buyer is not from crypto-native speculators, they may emerge from a structural shift driven by policy, necessity, and real-world demand.

The standardization of stablecoin regulation may usher in a new phase dominated by digital dollar. In an era of rising tariffs, capital controls and geopolitical fragmentation, cross-border capital needs faster and more hidden channels. Stablecoins, especially those that match U.S. interests, are expected to become a practical tool for economic influence.

Moreover, in areas that have been neglected by the industry for a long time, its adoption is also quietly emerging. In parts of Africa, Latin America and Southeast Asia, stablecoins have practical uses for remittances, savings and cross-border trade due to instability in their own currencies and large populations without bank accounts. These users are the new frontier of global dollarization.

As RWA scale expands, the purpose of more users participating will no longer be speculation, but to acquire real assets on the chain.

Barbell Age: This is not a collapse, but a rebalancing

The lack of marginal buyers is not just a cyclical low, but a structural result, a downstream effect of two forces:

Cryptocurrencies as an asset have already occupied much of the world's attention. The dream of getting rich overnight has lost its glory.

The dollar shortage is real. The Fed's quantitative tightening and macro tightening policies structurally reduce the buyer base.

After all the cycles, narratives and reshaping, cryptocurrencies are split into two completely different paths, and this division will only grow bigger and bigger.

On the one hand, the speculative system that was once driven by meme, leverage and narrative reflexivity is now dying due to liquidity withdrawal. These markets rely on sustained marginal inflows without which even the most well-designed strategies cannot sustain buying.

On the other hand, policy-oriented and practically driven adoption is slowly but undeniably emerging. Stablecoins, compliance channels, and tokenized assets are all growing. Not by hype, but out of necessity. Not bubbles, but lasting.

What we are witnessing now is not a market collapse, but a structural rebalancing.