Author: Matti Translation: Shan Oppa, Golden Finance

This is an article based on myths, legends and historical analogies, avoiding the first principles. I often apply René Giral’s scapegoat theory in my writing to analyze the crypto market, suggesting familiarity with his mythology before delving into it. As a rational investor, I think using traditional cycles to understand the crypto market is outdated because the industry is maturing. But as a believer of Giral, I can’t ignore the mythical pattern that has been staged again in the crypto market. To a person holding a hammer, everything is like a nail.

In this short article, I explore how the crypto bull market is divided into two stages: the first act, followed by the interlude of the "imitation crisis", and then the second act, ending with the "scapegoat crisis."

The first act begins with rising prices, imitating sexual desires to gather the community. The subsequent collapse triggered a chaotic mutual attack—a symbolic “Everyone is an enemy”—internal conflicts devour the community.

The second act calmed the chaos with a new round of rise, pushed the cycle to an end, and finally selected the scapegoat. Each cycle ends with an over-expansion of its own principles, and each cycle requires a scapegoat.

This reveals both periodicity—nothing is different this time, but also showing linear evolution—it is indeed different this time. Ultimately, we will always enter a new stage.

ICO collapse has left Ethereum desolate, and DeFi Summer has revived it. DeFi Summer calls into question Bitcoin’s financial potential, and Microstrategy and BlackRock reshaped it.

The 2017 bull market was an ICO-driven ETH fanatic. Ethereum's "world computer" has become a slot machine. ICO cashed out ETH, the computer collapsed and eventually resurrected in the 2020 DeFi frenzy, followed by over-leverage players - Do, 3AC and SBF - all fell. Although the scapegoat of 2017 is not individually specific, it does exist.

In 2017, Ethereum's ICO was both a source of prosperity and a cause of decline; in 2021, the heroes of DeFi Summer embarked on the same trajectory. The best scapegoats are often those who first bring wealth and carnival - the huge wealth of Ethereum ICO. DeFi's uncontrollable lending and token issuance have made participants rich overnight, and eventually became the root cause of market collapse.

Bubbles are side effects of imitation enterprises

2017 and 2021 The bull markets of 2017 were divided into two distinct stages, with a surprising similarity between: Summer's sharp decline in 2017 and 2021. These intervals—short but violent periods of adjustment—interrupted the initial rise, but then the market reignited, driving the second act of frenzy with new leading assets.

In these intervals, as the scapegoat has not yet appeared, mimicry began to explode inward. Gillar's followers knew that this "everyone is an enemy" chaos was unsustainable and ultimately needed to be purified through the scapegoat. But first, violence must be released.

In 2017, ICO The craze and Bitcoin expansion dispute triggered a plunge in early summer—Bitcoin fell from $2,700 to below $2,000, and Ethereum fell from $400 to $150—a collective conflict erupted. The SegWit battle split the Bitcoin community due to block size issues, and the Bitcoin Cash (BCH) fork deepened the crack.

Ethereum's ICO bubble burst, and users, developers and foundations blamed each other for network congestion and scams. The battle between Ethereum Classic (ETC) and ETH escalated—ETC under the banner of "pure"—between June and 8 Tenfold surges in the month—at the same time, the dispute over fee allocation between miners and users exacerbated social confrontation.

In 2021, a similar pattern repeated after the May crash—Bitcoin fell from $64,000 to $30,000, and Ethereum fell from more than $4,000 to $1,700—the fuse was Elon Musk’s criticism and suppression of Bitcoin.

The market was in a more complex conflict: Ethereum’s Gas FeesThe issue sparked a debate on the expansion of Layer 1 and Layer 2; the Bitcoin Mining Committee confronted extremists and pragmatists; the collapse of DeFi production mining (such as Iron Finance) allowed speculators to attack each other; Tether's FUD exacerbated competition for stablecoins.

From Gillal's perspective, these interludes are inflection points: the dominant actors in Act 1 collapsed due to unsustainable fanaticism, triggering internal ruptures until Act 2 turns market enthusiasm to new assets, delaying the final scapegoat.

In 2017, the first act was led by Ethereum and ICO—ETH soared from $8 to $400, with sales of tokens such as Bancor and Tezos fueling—Bitcoin is just a supporting role. After the interlude, the second act opened, and Bitcoin soared to $20,000 under the FOMO sentiment of retail investors, while BCH (up to $4,000) and EOS made their mark as "Ethereum killers."

The first act belongs to ETH and ICO, and the second act is dominated by Bitcoin.

In 2021, the protagonists of the first act are Bitcoin, Ethereum, and DeFi leaders such as Aave, Uniswap, which gradually mature into "institutional" assets. After the intermittent period, the second act changed to a new face: LUNA is rising wildly, OlympusDAO's (3,3) pledge craze, Solana once rushed to $260, and other tokens such as AVAX, DOT, Dogecoin (DOGE), Shiba Inu (SHIB) followed suit.

The first act belongs to the BTC, ETH and DeFi leader, while the second act belongs to the LUNA, Olympus forks, SOL and the broader wave of altcoins.

The cornerstone of this cycle is institutionalization, not ICO technology innovation in 2017 or DeFi change in 2021. This is a top-down shift driven by ETF and MicroStrategy (MSTR) capital. But all cycles have a common theme of financial engineering: 2017 is global capital coordination, 2020 is on-chain gains, and 2024 is institutional access.

While the meme coin's fanaticism may distract bystanders, it onlyIt's the bait (as in the last cycle NFT). This is a small cycle in a larger cycle. But it reveals the market's rejection of grand narratives: price is both a means and an end, arbitrage game that will make the last move before institutions completely control the market, and speculation has officially become the exclusive field of Wall Street white-collar workers.

Institutions have arrived - it is no longer an empty talk of the "Enterprise Ethereum Alliance" in 2017, but the reality of spot Bitcoin ETFs on January 11, 2024. Donald Trump's election, promising to make the United States a crypto superpower, marks a leap. In November 2024, the crypto market soared in a feverish mood - Wall Street entered the market, strategic reserves were about to emerge, and the stablecoin bill hints at a new form of dollarization.

But when Trump took office in January 2025, the market began to worry. The "miracle" that people are expecting has not appeared, and the trade war FUD and macro turmoil have shattered hope. The community realized that Trump, the S-level internet celebrity, actually used his meme coin to "Rug" the entire market, and the meme coin super cycle came to an abrupt end. The first act has come to an end, and the community hopes for institutions to save it—but the scapegoat has not yet appeared.

It is now March 2025, we are in the intermittent period, Bitcoin fell from its highs, and the entire altcoin market is in ruins. The intermission period unfolds because people really believe that it is over. The community is in chaos and violence is raging, but the scapegoat has not yet appeared.

History whispers, the second act is often ignited with price fanaticism, diverting market desires and postponing the final sacrificial crisis. However, that doesn’t mean prices will soar wildly – ​​the key to the question is, who will we turn our anger to when the institutionalized fanaticism eventually collapses?

The scapegoat must come from the institution that nurtures this round of prosperity. Will it be a vague, collective cry—“institutions destroy crypto markets”—pointing the finger at BlackRock’s ETF empire, or those suits who completely dollarize crypto rebellion?

Or will it condense into sharper accusations and more personal liquidation? Will MicroStrategy crash? Will its $40 billion Bitcoin bet collapse due to leverage liquidation, and Michael Sailer went from prophet to the ultimate gambler and was sacrificed to repay our sins? againOr, Trump, the S-class internet celebrity, was also thrown into the fire due to a meme coin scam?

This is not the bottom yet-far not. The imitative chaos is still stirring, and the shadow of Act Two is approaching. Whether it will open up like before, with a fanatical surge and then fall into a deeper abyss is still unknown.

But one thing is certain: the scapegoat will come, perhaps in a suit. If he doesn't wear a suit, it might be his sin—but he will still be forced to make his debut in the French Riviera peak season.