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Cryptocurrency analyst Lark Davis argues that despite recent market volatility, the current crypto cycle hasn't reached the euphoric peak that typically signals a major market top. Unlike the 2021 bull run that featured widespread retail FOMO, NFT mania, and speculative excess across multiple asset classes, today's market remains characterized by skepticism and fear rather than overconfidence.
Key Points
- Current meme coin and AI token speculation remains significantly smaller than 2021's Dogecoin ($80 billion market cap) and Shiba Inu ($40 billion market cap) peaks
- Missing traditional euphoria indicators: no celebrity crypto endorsements, limited IPO activity, and subdued retail participation compared to previous cycles
- Google searches for "how to buy Bitcoin" peaked in December 2020-January 2021 at levels not approached since
- Market infrastructure has matured with ETFs and institutional custody, but investor psychology remains driven by emotion
- Approximately $2 trillion worth of IPOs scheduled for 2026, including SpaceX, Figure AI, and Perplexity
Comparing Market Cycles: 2021 vs 2024-2025
The 2021 crypto peak coincided with unprecedented speculative excess across multiple markets. NFTs reached astronomical valuations, with Beeple's "The First 5,000 Days" selling for $69.3 million and Justin Bieber purchasing a Bored Ape Yacht Club NFT for $1.3 million. Virtual real estate in platforms like Decentraland commanded prices exceeding $2.4 million for single parcels.
According to Davis, the current cycle has produced its own speculative assets, particularly in AI-focused tokens. A CoinGecko report indicates that meme coins and AI captured 46% of crypto narrative interest in 2025. The AI token ai16z achieved a $2 billion market cap within two months of launch, while the Trump-themed meme coin briefly reached a $50 billion fully diluted valuation.
However, these figures pale compared to 2021's scale. Dogecoin alone exceeded an $80 billion market cap during the previous cycle, while Shiba Inu reached $40 billion, temporarily surpassing established companies like Nissan and Deutsche Bank in market value.
Missing Euphoria Indicators
Davis identifies several absent markers that historically signal market tops. The 2021 environment featured widespread mainstream adoption of trading apps, with Robinhood and Coinbase topping App Store charts during peak speculation periods. Coinbase recorded 500,000 daily active users by April 2021.
The traditional IPO mania remains notably absent from the current cycle. 2021 witnessed nearly 400 listings raising over $140 billion, alongside more than 600 SPAC launches representing the largest wave since the dot-com bubble. Celebrity endorsements and mainstream cultural integration that characterized previous peaks have yet to materialize significantly.
When everyone's a genius, the game is done
Davis references Joseph Kennedy's famous pre-1929 crash decision to exit stocks after receiving investment advice from a shoeshine boy, suggesting current market conditions represent the inverse scenario where retail remains skeptical rather than euphoric.
Market Maturation vs. Human Psychology
The cryptocurrency market has evolved substantially since 2021, incorporating ETFs, institutional custody solutions, and regulatory frameworks. However, Davis argues that infrastructure development doesn't necessarily eliminate speculative behavior, noting that traditional stock markets possessed similar institutional features during 2021's SPAC boom.
Current market behavior suggests investors remain trauma-affected from previous bear markets, displaying heightened sensitivity to minor price movements. This psychological state contrasts sharply with the overconfidence typically observed at cycle peaks.
The analysis suggests that genuine market tops occur when skepticism disappears and risk-taking feels safe, conditions not currently present despite recent volatility. With major IPOs scheduled for 2026 and retail euphoria remaining subdued, the current cycle may extend longer than many participants anticipate, potentially creating prolonged periods of market uncertainty that challenge both bulls and bears.
