The People are Tired (of losing)

This article deeply explores the changes in the crypto market, particularly the fatigue felt by retail users.

Retail users are tired of losing money in the crypto market, and the market has become fast-paced and competitive, shifting from a venture capital-led market to a meme coin craze. This article deeply explores the changes in the crypto market, particularly the fatigue felt by retail users. While meme coins once provided a fairer opportunity for retail, they ultimately became overly speculative, leading to a deterioration in market conditions. This has led to a call for more attention to projects with real applications and fair distribution mechanisms.

People Feel Tired: Key Takeaways

As Kaitoai emphasized, in the last two weeks of January 2025, the mention of the word "tired" increased on crypto Twitter. This cycle is different from others, presenting more challenges and surprising even traders who have experienced two or three cycles. The market is changing: the speed of narrative shifts is faster, and attention has become the scarcest currency. Last but not least, increasing regulatory scrutiny and political intervention in the crypto space have introduced new variables.

Why do people feel tired? Retail investors have missed opportunities for too long; every time it seems the goal is within reach, the market dynamics change faster than before. In the 2021 cycle, we saw venture capitalists achieve exponential returns compared to retail investors who had no access to private investment opportunities.

This continued until around 2023, when projects like TIA and DYM emerged, marking the end of retail investors' disillusionment with these venture capital extraction techniques. What might be the most rational consequence of this? A movement seeking to change the power dynamics.

The long-known narrative of "meme coins" gained increasing attention as venture capitalists no longer had private chips to sell to ignorant buyers in the market. This was beneficial for retail investors, who managed to find a fair competitive environment. Until the narrative became overly exaggerated and saturated, further shortening users' attention spans. Let’s look at how the market landscape has evolved and where we might be heading, attempting to explain why people feel tired.

Phase One (Early 2024) - From VC Coins to Meme Coins

It almost feels like a long time ago, before the AI craze and meme coin frenzy, there was a period when the mainstream play for retail investors was airdrops. This play was initiated by Arbitrum and other Layer 2 airdrops. Retail users saw the potential of airdrops by trying new protocols and chains, turning airdrops into a business, with companies offering airdrop-as-a-service.

However, dreams turned into nightmares when these coins began to release and disclose their tokenomics, leaving users very disappointed: all the efforts resulted in almost nothing airdropped? One of the most controversial releases was Scroll, a ZK-EVM L2. After over a year of ecosystem promotion, Scroll's airdrop was disappointing, raising questions about why 5.5% of the SCR supply was allocated to Binance instead of the community.

Moreover, the circulating supply of most of these tokens was very low (circulating supply / total supply), with a large portion allocated to VCs. Another topic of discussion is TIA and DYM, which at one point had narratives on crypto Twitter revolving around staking them in exchange for expectations of future ecosystem project airdrops. You guessed it: those airdrops never happened, and the price trends of the tokens only went down (below is the chart for DYM).

Here’s an overview of the different rounds and investor unlocks for TIA: In the first unlock, over 97.5% of TIA's circulating supply was unlocked, valued at over $1.88, with daily unlock amounts reaching $10 million. Ultimately, retail investors grew tired of these types of tokens, meaning that the issuance price of most tokens only fell and eventually even dropped below their last financing valuation.

This is evident when we look at the dashboard provided below: This dashboard considers the investment returns of each VC's best-performing investments in the data sample.

Returns from venture capital in the previous cycle:

Returns from venture capital in this cycle:

The end of the venture capital era is so evident that even Hayes accurately pointed this out in his December 2024 article, where retail investors saw a glimmer of hope at the end of the dark tunnel: meme coins. Tired of the venture capital-led schemes, retail investors finally had the chance to enter the permissionless market that blockchain was supposed to open up for them.

This must be the direction of the future, right?

Phase Two - The Meme Coin Craze

After the end of the venture capital era, users had to find new plays, and they discovered this through muststopmurad and his "meme coin super cycle." For retail investors, meme coins seemed to be the closest thing to having equal opportunities in the market—until they no longer were. Prices soared, Trump was elected, and we were going to the moon.

But suddenly, the liquidity plug was pulled, market attention shifted elsewhere