Wintermute CEO discusses the future of the crypto industry: If only institutions and regulations remain, we have already lost

Crypto Market Maker Wintermute CEO Evgeny Gaevoy recently published a lengthy article titled “Golden Path,” reflecting on the positioning and future direction of the crypto industry from philosophical and industry development perspectives. He points out that while the current crypto market has seen institutional adoption and technological implementation, the industry is facing a loss of soul. The true key is not price, but a fundamental question: why do we exist? Gaevoy believes that the core value of crypto is not to improve financial efficiency, but to build a sovereign system that runs parallel to, or even independent from, the existing system.

Golden Path: The Human Survival Logic of Anti-Centralization

Gaevoy uses the metaphor of the “Golden Path” from the science fiction novel Dune: the long-term survival of human civilization depends on decentralization and diversity, not centralization and stability. Throughout history, civilizations have gone through cycles of chaos, self-organization, imperialism, and collapse. Whether nations or corporations, the larger and more centralized they are, the more devastating their collapse. Therefore, he argues that when systems enter phases of integration and centralization, the real response should be to embrace diversity and resist centralized empires, even if stability and prosperity seem tempting.

In his view, the current world is developing along three “Leviathan” systems:

• Corporate-dominated anarcho-capitalism
• Fully controlled nationalist states
• Fascist alliances between government and corporations

The only true force opposing this trend of centralization is cryptocurrency. Gaevoy summarizes three possible future scenarios for the industry:

1. Traditional Finance absorbs crypto (most likely)

2. Large-scale adoption of stablecoins, KYC chains, enterprise chains, regulated “decentralized” exchanges, Bitcoin becoming ETF or government assets, CBDCs providing comprehensive financial surveillance. He bluntly states: technology has succeeded, but the ideology has lost.

3. Governments relinquish control (least likely)

   Fully permissionless chains become mainstream, free from KYC/AML restrictions, with token market caps reaching trillions of dollars. Gaevoy considers this merely an idealized imagination; governments and regulators are unlikely to voluntarily give up sovereignty.

4. Parallel systems coexist (the only worthwhile pursuit)

   A world running alongside the existing financial system, where users can freely choose to enter or exit either system. The crypto system is designed to be isolated from governments, forming a “Network State” or digital tribe. He believes this is the only truly victorious scenario.

Don’t chase after people who don’t need cryptocurrencies

Gaevoy points out that the crypto industry has learned the wrong lessons over the past few years. Facing regulatory pressure, the industry has tried to cooperate with the system—pursuing better user experience, mass-market appeal, and over-reliance on centralized infrastructure. But the real goal should be to build a system that cannot be controlled.

This includes avoiding dependence on fiat on-ramps, not relying on App Stores, DNS, centralized order books, reducing reliance on centralized stablecoins (which can be frozen), prioritizing permissionless protocols and true DAOs, establishing replaceable infrastructure (cloud, LLM, social platforms), strengthening privacy tools, re-exploring algorithmic stablecoins, and fostering real economic activity within the crypto ecosystem.

He also presents an counterintuitive view: inconvenience may be the true cost of sovereignty. Cryptocurrencies should not cater to the 50% of the world that doesn’t need them; they should be built for the 50% of sovereign individuals who truly do.

From Mainstream Adoption to Escape Routes

Gaevoy believes that in the coming years, global governments and regulators will continue to expand their power, making Leviathans even stronger. Therefore, the true mission of crypto should not be to pursue mainstream adoption and replace the existing system, but to build an exit.

These exit products should have the capability to:

• Function even if crypto falls out of favor
• Not depend on external systems
• Allow individuals to survive and trade without permission

The only worthwhile goal is to create pathways out of crises. Even if cryptocurrencies no longer remain popular, they should withstand external tests. More importantly, they will give meaning to everything. Most people will choose to coexist with the system, but a few will be responsible for building exits. This may be the only way for us to rediscover the true meaning of crypto.

This article, in which Wintermute CEO discusses the future of the crypto industry—“If only institutions and regulators remain, we have already lost”—originally appeared on Chain News ABMedia.