The End of the Degen Era: How Asia’s Crypto Traders Lost Their Nerve

DeFiance Capital’s Arthur Cheong says regional sentiment has ‘hit a new low’, and that this time the data agrees. 

Is he right? 

Cheong’s claim that ‘the speculative sentiment of Asian crypto-native users has hit a new low in this cycle’ is backed by fresh data. Kaiko’s latest market note shows open interest on Asia-dominant exchanges such as Binance and OKX down roughly 15% since July, with retail spot volumes trailing institutional flows for the first time in two years. Perpetual funding rates on altcoin contracts have hovered near zero, signaling indecision on both sides. 

Coinglass figures confirm the pull-back: derivatives turnover at OKX and Bybit’s Asia desk has dropped to 18-month lows, while liquidity has concentrated around Bitcoin and Ethereum. Globally, the average funding rate for major perpetuals sits near 0.01%, and open interest remains high at $220bn, suggesting an active but cautious market. 

Cheong’s post captures that reality: activity persists, but conviction is missing. 

Why is sentiment collapsing? 

A combination of regulation, macro pressure, and fatigue explains the slide. Hong Kong’s new licensing regime has narrowed the field of compliant venues. Singapore's MAS has restricted leverage and marketing for retail traders. Regulators from Japan to South Korea have expanded surveillance to detect wash-trading and coordinated positioning. 

Meanwhile, the once-hyperactive degen culture, characterized by full-time trading in the hope of outsized returns, has cooled under the weight of a strong dollar, Chinese controls, and growing risk aversion. ‘Retail participation remains muted, with most traders sidelined in stablecoins,’ Kaiko analysts wrote in May 2025. 

Asia still drives nearly half of global crypto-derivatives turnover, yet much of that flow now appears risk-neutral rather than speculative. Traders are participating, not pursuing. 

Are the US and Europe any different? 

The cooling extends westward. In the US, CME Group reported record crypto-futures volume and open interest through October 2025, underscoring institutional dominance even as retail activity remains muted. Sentiment indicators tell the same story: Bitwise’s Cryptoasset Sentiment Index turned deeply bearish in September, and the global Fear & Greed Index has hovered around neutral since early autumn. 

Europe presents a subtler picture: Chainalysis ranks the region as the world’s largest crypto economy by transaction volume, yet MiCA and regulatory frameworks are increasingly shaping activity rather than short-term speculation. Institutional adoption is broad, but the classic retail churn that once fuelled mini-bubbles has largely faded. 

Across regions, the same tone emerges: liquidity without exuberance. 

Party’s over? 

History suggests this kind of apathy often precedes recovery. In both 2019 and 2022, low funding rates and subdued retail trading were followed by spikes in onchain volumes and asset prices. Kaiko’s researchers note that ‘Asian retail sentiment often bottoms just before liquidity rotates back onchain.’ 

If that pattern repeats, the current lull could form the base of the next speculative upswing, though it may look very different. With institutional players controlling derivatives flow and regulators closing the gap on offshore risk, the next wave is likely to center on tokenized assets, structured yields, and compliant trading venues rather than meme-coin mania. 

For now, Asia’s once-feverish trading floors are quiet. The leverage is light, the volume steady, and global crypto speculation sits in neutral, waiting for the next signal of conviction.