He noted that many projects secured huge funding rounds despite minimal revenue and no clear route to profitability, forcing them to rely on reaching multibillion‑dollar valuations just to warrant another round of financing.
The fundraising culture in crypto exacerbated the problem.
Unlike most sectors, announcing a large raise can lift a project’s token price and attract retail interest, creating incentives to portray financing in the most favorable light.
The headline figure can also mask the true strength of the financing. Kirkley pointed out that Global Settlement Network saw investors back out of signed commitments, showing how announced rounds often differ from the cash actually received.
Token governance meets reality
Another experiment currently under trial is decentralized governance.
Token ownership does not automatically lead to active participation, Kirkley said, and governance votes can impede struggling protocols from pivoting quickly. “Token holders are not necessarily active participants in your ecosystem,” he added.
The outcome is a market that is increasingly determining what crypto truly requires.
Kirkley highlighted stablecoins, neobanks, and institutional‑grade wallet and settlement infrastructure as emerging winners, whereas sectors such as social tokens, memecoins, and portions of Web3 gaming are facing a tougher reckoning.
Bitcoin faces a key support test
The shakeout could intensify if bitcoin breaks its next major support zone.
Kirkley described the market as a “soft bear market,” but noted that support at $61,200 is critical.
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