Crypto Industry Shifts Focus to Fundamentals Amid Market Volatility

Cryptocurrency is evolving with a focus on fundamentals, as industry leaders navigate the challenges and opportunities presented by sudden market downturns. Executives in the crypto space are making decisions that impact both short-term and long-term strategies, planning ahead despite the unpredictability of external variables. Jack O’Holleran, an executive in the industry, emphasizes the importance of building volatility and variability into planning, acknowledging the difficulty of predicting all factors that could impact the market.

O’Holleran believes that the crypto industry is on a path toward fundamentals, drawing parallels to the early days of the dot-com era. During that time, speculation swirled around technology even before products were fully developed. Similarly, in crypto, the focus is shifting towards project metrics and infrastructure, with less emphasis on economic values and more on Total Value Locked (TVL). This shift is evident in the industry's current "loss leader" mode, where the success of infrastructure projects is seen as a strong indicator of future profitability and token value capture.

The industry is at a maturity inflection point, with growing pains expected as it figures out metrics to value projects. This evolution includes gauging the value of different segments in crypto, such as DePIN or layer-2 projects. The focus on fundamentals is a net positive for the long-term health of the crypto industry, as it moves towards a more mature and stable market.

Bitcoin, for instance, is evolving towards higher scalability and stability through second-layer solutions. This evolution is not just about technological improvements but also about the growing acceptance of cryptocurrencies by major institutions. The perception of cryptocurrencies has shifted from being dismissed as abstract experiments to being recognized as viable digital solutions. The growing digitalization of daily life and increasing concerns around centralized data control have driven trust toward blockchain solutions. Blockchain technology offers transparency, speed, and security, making it a natural choice for many users. This shift is evident in the increasing acceptance of digital payments and the demand for more privacy-focused, transparent alternatives.

The consolidation of the crypto market is another key trend. More cryptocurrencies exist today than publicly traded stocks, and while many are for fun, some projects face significant gaps in expertise or complementary technologies. For example, the merger of SingularityNet, Fetch.ai, and Ocean is a perfect illustration of this trend. These projects were working on complementary technologies—AI and blockchain—but from different angles. By coming together, they can offer a more complete solution, combining data management (blockchain) and data creation (AI) to power decentralized, AI-driven systems.

AI is a central component in this evolution, especially now that large organizations are heavily investing in it. It’s becoming like the internet—something so embedded in every project that it’s no longer necessary to highlight it. Blockchain and AI are complementary. While blockchain manages the data, AI generates it. And when you combine these two technologies, you can create powerful decentralized systems. The best projects today are those that leverage AI from day one to generate value and move quickly to market.

However, the biggest hurdles for traditional institutions adopting crypto are regulatory concerns and cybersecurity risks. After the 2008 financial crisis, regulatory frameworks became stricter, and these regulations have only intensified in the digital age. Many institutions are hesitant to adopt crypto for fear of regulatory fines. Furthermore, cybersecurity remains a concern. Recent hacks have highlighted vulnerabilities in third-party providers. Banks, in particular, are reluctant to custody crypto because they fear the risks and liabilities involved.

The future of crypto is about striking that balance. It doesn’t have to be an all-or-nothing approach. By integrating crypto with traditional finance in a hybrid model, we can achieve a system that combines the strengths of both worlds. This is where Storm Partners comes in. They have developed a new corporate innovation sandbox called LightningBox, which aggregates Web3 tools and providers into three distinct layers. The first layer is service providers, such as cybersecurity companies and legal firms. The second layer consists of infrastructure providers—companies that offer tools like custody solutions, payment solutions, and compliance tools. The third layer is the actual blockchain technology itself—the backbone of the system. These three components work together to create a Web3 application. By combining them, Storm Partners has built a sandbox environment where organizations can interact with the full composability stack in one place.

In the real world, a bank or institution would struggle to connect with all these providers separately—it would take too much time, and many organizations simply don’t have the resources. Plus, the costs involved are high and there’s no economy of scale. But by aggregating all of them in one place, Storm Partners has made it easier to create proof of concepts and minimum viable products (MVPs) quickly. With minimal resources, companies can market-test these concepts, determine if they’re valuable, and present them to their board. If the board approves, the next step is to secure funding—whether it’s $1 million or $10 million—to develop the product for mass adoption. LightningBox is designed to make that process faster, easier, and more cost-effective.

Looking ahead, Storm Partners is expecting major M&A announcements from clients they’ve been working with. Additionally, they’re looking at potential acquisitions themselves, which is a very interesting development. They’re also planning an exciting expansion into new regions, particularly into the GCC area, focusing on a country that’s not widely known today but has a growing reputation for its crypto regulation. This expansion will be a strong entry point into the Arab world, and they’re really excited to announce it in Q2. Beyond that, they have more exciting projects coming from their clients, though some details are confidential. They strongly believe that 2025 will be a great year for the industry. A lot of organizations are bullish on 2025, and they’ve been setting aside budgets for that year. There’s a lot of potential for growth, and they’re eager to see what initiatives will come forward as companies start deploying their funds. They also anticipate some fantastic projects emerging from LightningBox, and they’ll be announcing some of them at their Corporate Innovation Day in Decentral House in Daytime. It’s going to be an exciting event, with some incredible enterprise-level announcements.