Institutions drain liquidity, Meme coins distort the market: why is this round of "false bull run" so torturous? Only Bitcoin survives!

Many market participants believe that the current cycle of the bull run in crypto assets is the most difficult and frustrating in history. Although Bitcoin (BTC) has set a historical high, its upward momentum is lackluster, and the pullback has been exceptionally brutal, with alts generally falling by 90% or more, and retail investors have almost disappeared. Crypto trader “Crypto Birb” summarized three main reasons: Wall Street institutions getting on board and focusing on infrastructure and RWA, draining speculative liquidity; the excessive hype of Meme coins turning the market into a “casino with no exit,” distorting market value; and President Trump’s trade war and the ongoing high Interest Rate macro environment, choking off the hope for speculative capital and retail investor return.

The Truth of the “Hollow Bull Market”: Institutional Entry and Changes in Market Nature

In this bull run, although Bitcoin has doubled from its 2023 low in terms of price, the market's “soul” feels empty and exhausted. This is in stark contrast to the previous cycle's scene of nationwide revelry and alts soaring.

Institutional Vampire: Speculative Liquidity is Being Drained

The deep involvement of Wall Street institutions (such as BlackRock, Fidelity, and Goldman) did not bring about the speculative frenzy that retail investors expected, but rather resulted in large-scale extraction and the occupation of infrastructure.

• Acquiring infrastructure: Institutions are not here to speculate on meme coins or airdrops; they have purchased custody networks, liquidity rails, and compliance channels, which are now being used to “rent” to other participants.
• Fundamental rather than speculative: As noted by Telcoin Magazine and Fortune, institutional adoption in early 2025 is “fundamental rather than speculative.” This is good for Bitcoin's long-term legitimacy, but bad for crypto culture and short-term speculators.

Trader Crypto Birb commented: “Smart money has taken away valuable things - it's good for them.” Market liquidity is being absorbed by institutional funds focused on real-world assets (RWA) and infrastructure, causing alts to lose the “air” for a rise.

The Catastrophic Distortion of Meme Coins: Casinos and Self-Destruction

If the entry of institutions has made the market “professionalized,” then the frenzy of Meme coins has made it “unrecognizable.” Originally born as a satire, Meme coins have become the dominant narrative in 2024 and 2025.

The Perfect Storm of Greed and Irony

Every week, new community tokens, animal themes, and political memes emerge, accompanied by waves of holders getting burned.

• No-exit casino: Meme coins have turned Crypto Assets into a “no-exit casino”. One token purely relies on viral spread to rise dramatically, then quickly collapses.
• Self-destruction: This storm is a combination of the greed of retail investors and the irony of Web3, both ultimately suffering heavy losses. Even industry veterans who should have known better have been caught up in the chase for hype rather than substance.

This excessive pursuit of Meme coins has greatly dispersed retail investor funds, depleted market energy, and diluted the industry's focus on practical projects.

Macroeconomic Pressure: High Interest Rates and Trade Wars Stifle Risk Appetite

The macroeconomic background has also become a stumbling block for the crypto market to achieve a retail recovery.

• Trade war impact: Trump's trade war and tariff policies triggered a 20% pullback in the stock market and drained liquidity from global markets.
• High Interest Rate Effect: Persistently high interest rates have resulted in high capital costs, leading to a depletion of speculative liquidity, causing risk assets such as Crypto Assets to stagnate.

Ironically, this government, considered “pro-encryption”, ultimately froze the retail investor's return through high interest rates and macro policies. Consumer spending has slowed, and the average investor's appetite for 100x speculative returns has vanished. What could have been an era of wealth explosion has ultimately turned into a test of patience.

Bitcoin: A Sovereign Asset Surviving Amidst the Ruins

Amidst all the “wreckage” of these markets, Bitcoin (BTC) continues to exist slowly, steadily, and sovereignly. The entry of institutional capital has solidified Bitcoin's legitimacy at a time when everything is burning to the ground.

The maturity and lessons of Bitcoin

As pointed out in a16z's “State of Crypto Report”, the power of Bitcoin is supported by macro forces and regulatory acceptance.

• Signs of Maturity: The current market has less frenzy, fewer parabolic charts, and resembles a financial system rather than an amusement park.
• A painful lesson: For those who came for the “digital pump,” this may feel like a punishment. Crypto Birb summarized, “We were played by ourselves. This is our punishment for choosing hype over practicality.”

Conclusion

The lesson from this “hollow bull run” is profound. Bitcoin's resilience proves that Crypto Assets can persist, but the creativity, retail energy, and wild optimism in the market have become collateral casualties. This may be the cost of progress; the market is maturing in the process of institutionalization, but it reminds all participants: not every cycle is meant to make you rich. Some cycles exist to make you reassess the original intention of your investments.

Disclaimer: This article is for informational purposes only and does not constitute any investment advice. The crypto market is highly volatile, and investors should make decisions with caution.