2026 bear market reshuffle: the collapse of native projects and the rise of Wall Street tokenization

According to Woofun AI, the 2026 cryptocurrency bear market has triggered a deep reshuffle across the industry, and Web3 startups are facing a severe crisis of bankruptcy. From trading platforms to DeFi agreements, to NFT projects and underlying infrastructure, a large number of projects have stopped operations or reduced their business. This widespread decline is not simply a fluctuation in market sentiment, but a direct reflection of the failure of the business model and the breakdown of the capital chain. Whether the price of Bitcoin can stabilize depends on multiple variables such as demand, liquidity, and market positioning. Companies often shut down before investors are fully aware of the risks. Low revenue within a few months can exhaust reserves, causing some companies to withdraw from the historical stage before the sell-off market ends.

This wave of bankruptcy revealed the fragility of the industry's internal structure. Bankruptcy, consolidation, and restructuring became passive responses to dealing with poor business environments rather than stable indicators of market trends. It is worth noting that this decline has taken various forms, including complete extinction due to unsustainable business models, strategic withdrawal of owners who actively cut product lines, and technical collapse where the network abandoned its original technical architecture. These announcements not only record the end point of the enterprise, but also reflect the difficult survival situation of the entire industry without stable cash flow support. Although Bitcoin's price trend changes with the market, it is impossible to cover up the collective pain of native projects in the cold economic winter.

The breadth of this recession has far exceeded expectations, covering almost every segment from DeFi platforms and the NFT market to gaming and infrastructure. According to data compiled by Woofun AI, the bankruptcy list includes Odos Protocol, Moonbeam, Exchange Art, Ctrl Wallet, Cypher, ICON Network, NFTFi, Loopring DEX, Radiant Capital, Dmail, DL News, Tally, Step Finance, Swellchain, RedStone, JPG Store, Well-known projects such as ZeroLend, Goldfinch, Ionic, Everclear, and Arkham Exchange.

Furthermore, cryptocurrency games and consumer products such as Pirate Nation, Nyan Heroes, Ember Sword, Wildcard, Fantasytop, and Bloktopia have not been spared, and infrastructure or data analysis service providers such as Blocknative, Parsec, TapTools, and DataHaven have also been impacted.

Although not all projects have completely ceased operations, this broad coverage indicates that the industry decline has spread from trading platforms to all levels. This large-scale shutdown reflects the lack of endogenous motivation in the native cryptographic ecosystem in the absence of external blood transfusions. Many projects are unable to maintain basic operating expenses in a bear market environment, leading to the abandonment of technical structures or drastic cuts in product lines.

From a structural point of view, the collapse of these projects was not an isolated incident, but rather a systemic risk release for the entire industry in the context of tight liquidity. The decentralized vision of DeFi platforms was particularly weak under actual economic pressure. After the speculative popularity of the NFT market subsided, what was left was a waste of money, and infrastructure providers were unable to sustain themselves due to loss of customers.

This overall recession has forced industry participants to re-examine their own business models and find ways to survive in a low liquidity environment. However, most companies apparently failed to find effective solutions and ultimately chose to withdraw from the market.

The difficult judgment at the bottom of the market has further exacerbated the industry's anxiety. Comparing historical declines show significant differences in the current cycle. BitMEX said it is conducting a strategic assessment of its business and industry conditions, while BitMart mentioned operating conditions, market environment and future direction, but neither of them linked the schedule to digital asset price predictions. The decline in 2014-2015 was about 87%, 2017-2018 was close to 84%, and 2021-2022 was around 77%, while the current decline is significantly lighter.

This difference is due to increased market maturity, including the introduction of regulated exchange-traded funds and increased institutional participation, which has made the market more liquid and more resilient to risk. However, this does not mean that the market has bottomed out; the board of directors, founders, and creditors usually decide to close a business after facing insufficient revenue, financing difficulties, or legal pressure. These announcements record the limit of the company's ability to withstand, not a sign of the bottom of the market. Bitcoin prices continue to fluctuate under the influence of new macroeconomic data, liquidity conditions, and market positioning information, making it extremely difficult to determine the bottom in real time.

The more critical variable is that the current structural changes in the market have gradually penetrated traditional financial logic. The behavior pattern of institutional participants is very different from retail investors. When facing a decline, they prefer to hold rather than panic selling. This has cushioned the decline to a certain extent, but it has also extended the adjustment cycle. Therefore, it is impossible to determine the exact time of the bottom of the market based on the wave of bankruptcies alone. Investors need to be wary of cognitive biases that simply link the collapse of a company to the bottom of the market, and thoroughly analyze macro-liquidity changes and institutional position dynamics in order to more accurately grasp the market rhythm.

This complexity requires market participants to be more professional, no longer rely on simple historical analogies, but conduct multi-dimensional risk assessments based on current market structures.

The trend of differentiation between traditional finance and native encryption is becoming more and more obvious. Blockchain functionality is being adopted by Wall Street, while the native vision gradually fades away. Banks, asset managers, and settlement networks are accelerating the adoption of tokenization technology to build parallel financial systems. This process weakens the rationality of the “cryptocurrency is dead” argument. The actual application of blockchain has created a demand for its functionality, yet existing technical architectures often retain the core position of traditional financial institutions rather than completely replace them. In contrast, many crypto-native companies are still struggling to prove their revenue models or token value creation capabilities, and this difference explains why the current recession is different from simple technological exclusion.

If pressure continues to spread to more trading platforms, protocols, and infrastructure providers, and demand for Bitcoin remains weak, these bankruptcies may only be an early sign of industry consolidation. Cryptocurrency is losing more and more companies, products, and the vision of building a parallel financial system, while blockchain is gaining more institutional recognition under traditional financial rules.

This differentiation shows that the industry is undergoing profound structural restructuring. The elimination of native projects is a process of self-purification of the market, aimed at making room for more sustainable business models. In the future, with the deep integration of traditional finance and blockchain technology, the industry will form a new ecological pattern. Companies that cannot adapt to this change will be completely eliminated, and projects that can be integrated into the mainstream financial system are expected to gain long-term development opportunities.