Web3 2025: A repeat of the Y2K dot-com bubble

In 2000, China.com, leveraging its portal website and the concept of "China Internet," saw its market capitalization soar to $5 billion on its first day of listing on the Nasdaq. They lacked a clear profit model, core technological advantages, and even limited stable user growth. But that didn't matter—investors weren't buying the business; they were buying a ticket to "don't miss out on the China Internet." Also that year, AOL acquired Time Warner for $164 billion, creating the "merger of the century." The market capitalization of a dial-up internet service provider surpassed that of a media empire with physical assets like CNN and Warner Bros. The logic behind the deal was simple: the internet represented the future, and traditional media must embrace change. As for how to make money? That was a matter for the future. Both cases shared a common script: first tell a compelling story, secure massive funding, and then quickly go public to cash out. China.com relied on the "China concept," while AOL relied on the "internet portal." Were the businesses actually profitable? That's not the point. The key is to convince investors that missing this opportunity means missing out on the next era. Twenty-five years later, Web3 is precisely reproducing this scenario. A typical Web3 project begins like this: the team builds a website, releases a white paper filled with technical jargon, and creates a few conceptual demos to showcase the possibilities of "decentralization" or "on-chain governance." Then, they embark on a roadshow, painting a grand vision for investors—perhaps "reshaping the internet's value system," "giving users true data sovereignty," or "disrupting traditional finance." These narratives sound beautiful, just like the inspiring promise of "the internet will change everything." Driven by FOMO (fear of missing out), investors pour money in. Through Series A, B, and C, valuations soar. After receiving the funding, the project continues to refine its narrative, expand its community, and generate buzz. The next crucial step is listing the token on a cryptocurrency exchange. This is the equivalent of an IPO back in the day, the ultimate cash-out phase of the entire game. On the day of token issuance, early investors and project owners sell their shares for a profit, leaving retail investors to buy in. Market capitalizations can quickly soar to billions of dollars, but there's still no real profit to support them. It's hard to argue that these projects are outright scams. China.com did operate a portal, and AOL did offer dial-up services, but these businesses simply couldn't justify their valuations. Similarly, many Web3 projects are indeed developing technology, but they're still a long way from achieving true commercial value. But in a bubble, no one cares—everyone cares about when the next buyer will arrive. Ironically, even the methods of failure are identical. When the dot-com bubble burst in 2001, China.com's stock price plummeted to a few cents, ultimately leading to its delisting. The merger of AOL and Time Warner has been called "the worst merger in history," wiping out $200 billion in market capitalization. These companies' downfall wasn't due to poor technology, but rather to flawed business models from the outset. When the tide recedes, all those grandiose concepts become a joke. Web3 is undergoing a similar cycle. During a bull market, every project boasts a story of world-changing success, commanding valuations of hundreds of millions of dollars. Then, when a bear market arrives, token prices plummet 90%, teams disband, and communities vanish. Once-revolutionary innovations become unmaintained code repositories on GitHub. Most projects have never generated real revenue, and never will. This isn't to say that Web3 technology lacks value. Just as the internet undoubtedly changed the world, technologies like blockchain, smart contracts, and decentralization have the potential to create real business value in the future. The problem, however, is that the current Web3 industry is obsessed with repeating the millennial fundraising game rather than solidly solving real problems. While technology may innovate, the essence of the business model remains unchanged: storytelling, fundraising, and IPOs. It was just called the "Internet concept" back then, and now it's the "Web3 narrative"; it was listed on Nasdaq back then, and now it's listed on Binance and Coinbase. The form has changed, but the core remains. History doesn't simply repeat itself, but it always repeats itself with striking similarities. Investors in 2000 believed "the Internet equals the future," while investors in 2025 believed "Web3 equals the future." They were both half right—the technology does represent the future, but the vast majority of companies chasing the hype are destined to become victims of the bubble. But to be fair, Web3 does leave behind some real legacy. Blockchain networks process millions of real transactions every day, and while much of this is speculative, the underlying technology is truly functional. Smart contracts allow strangers to execute agreements without trust, which theoretically has value. Some DeFi protocols do provide decentralized financial services, although their users are primarily cryptocurrency enthusiasts. NFTs allow the ownership of digital assets to be verified and traded, even though 99% of NFT projects have been devalued. These technological innovations are real, but the problems they currently solve are not truly needed by most people. Until the real world begins to create real demand in a brutal way. The world in 2025 is experiencing unprecedented turmoil. Geopolitical conflicts are frequent, and trade and financial wars have become the norm in state-to-state competition. After Russia was kicked out of the SWIFT system in 2022, the cross-border payments and savings of millions of ordinary people were instantly frozen. The currencies of countries like Argentina, Turkey, and Lebanon have depreciated significantly, and the life savings of citizens have been wiped out by inflation. Some countries have been subject to financial sanctions for geopolitical reasons, their banking systems have been disconnected from the global market, and businesses are unable to conduct normal international trade settlements. These disasters reveal a harsh reality: in the traditional financial system, individual wealth and transactional freedom are completely dependent on national credit and international political relations. When conflict breaks out between countries, ordinary people are the first to suffer. Your deposits may be inaccessible due to sanctions, your cross-border remittances may be rejected for political reasons, and your local currency assets may be wiped out overnight due to currency wars. These are not theoretical speculations but real-world events. And it is precisely these disasters that have fueled the most essential demand for Web3: borderless, permissionless, decentralized financial services. This demand is completely different from the speculative hype within the Web3 community of the past few years. It's not about "getting rich overnight by trading contracts with 100x leverage" or "buying a meme coin and waiting for a price pump." Instead, it stems from the most simple real-world desire: to protect one's wealth, to ensure the free flow of money, and not become a victim of international disputes. A small business owner in Argentina wants to convert his income into a stablecoin to avoid peso devaluation. A freelancer in a sanctioned country wants to receive payments from overseas clients in cryptocurrency. A migrant worker wants to send remittances to family back home at a lower cost, without the high fees charged by traditional remittance agencies. These needs are simple, real, and urgent, yet they are difficult to meet within the traditional financial system. Web3's decentralized financial services can circumvent these obstacles. They require no bank approval, no national license, and are unaffected by geopolitical influences. As long as there's a network, value can be transferred and stored. This isn't a hyped-up demand, but a real need driven by the real world. Ironically, while all Web3 projects have been talking about "inclusive finance" over the past few years, the real users aren't speculators chasing financial freedom in developed countries, but ordinary people seeking basic financial services in unstable regions. The former cares about how much the token's value can increase, while the latter cares about whether tomorrow's meal money will disappear due to a currency collapse.

If Web3 truly has a future, it may not come from the star projects in Silicon Valley that raise hundreds of millions of dollars, but from applications quietly providing services in Argentina, Turkey, Lebanon, and Nigeria. These don't need flashy white papers or headlines on Binance; they simply need to enable ordinary people to safely store $100 or smoothly transfer $50 to family in another country.

This is the true growth point of Web3's decentralized inclusive financial services—not by providing more speculative tools for the wealthy, but by providing basic financial services to those left behind or harmed by the traditional financial system. The more turbulent the global situation, the stronger this demand becomes.

Perhaps in another decade, when the infrastructure matures, when real demand continues to grow, and when down-to-earth problem-solving projects gradually grow, we will discover that Web3 has indeed left a valuable legacy. Just like after the dot-com bubble, e-commerce, social networks, and cloud computing ultimately changed the world.

But that value won't come from the current frantic fundraising and hyped coin listings. It will come from the few survivors who persevere through the bear market, quietly building when no one is paying attention. And before that happens, we'll have to witness more collapses of China.com and AOL before we can truly embrace the Web3 era—if it ever arrives.