Bitcoin’s decline in this bear market may seem like the smallest in history on paper, but internally, the ecosystem is undergoing its most tragic collective liquidation ever. From veteran exchanges like BitMEX and AscendEX, to star DAO tools like Tally and data platforms like Zapper, down to multiple L2s and popular wallets, over a hundred projects have shut down this year. When capital and attention shift entirely toward AI, how should entrepreneurs who remain on the field position themselves? This article takes stock of Web3’s brutal wave of exits and records this major industry restructuring in the wake of the hype.
Ever since Bitcoin reached a new high last year and began its step-by-step decline, we have entered an undeniable bear market. Bitcoin hit a low of $58,410, a 52% drop from last year’s all-time high; Ethereum hit a low of $1,546, falling 65% from its 2025 peak. That said, compared to Bitcoin dropping 77% in 2022 from its 2021 peak, and 84% in 2018 from its 2017 peak, this is currently the smallest peak-to-trough decline among the major bear markets since Bitcoin’s birth in 2009—suggesting the market is entering a phase of maturity.
However, in terms of the ecosystem, 2026 is undoubtedly the most brutal, nerve-racking bear market in history. According to statistics from RootData, in the first seven months alone, over a hundred projects have announced shutdowns, bankruptcies, or indefinite suspensions. And these are only the ones that can be tallied; countless others have quietly vanished without a trace. Price fluctuations are often just investors overreacting, but the departure of industry practitioners reflects the reality of the market.
Exchanges Flash-Exit, Star Projects Say Collective Goodbyes
Let’s start with centralized exchanges. Founded in 2018 and headquartered in Singapore, AscendEX shut down on July 1 after failing to secure licenses from regulatory bodies like the Monetary Authority of Singapore (MAS) or Europe’s MiCA. Even more surprising than AscendEX was BitMEX—the pioneer of perpetual swaps founded in 2014—which announced on July 23 that it would be winding down operations by September 23. A window of just two months from announcement to closure is extraordinarily short for a major exchange. A mere three days after that, BitMart, known for its rapid token listings and vast array of altcoins and memecoins, announced on July 26 that it was halting deposits immediately and would fully shut down by January 31 next year.
If it were only exchanges closing down, the situation wouldn’t be quite as alarming. However, user-facing application projects are suffering an even worse wave of shutdowns. Among them, what I regret most is Tally, the DAO governance platform that served Arbitrum, Optimism, Uniswap, Aave, Gitcoin, ENS, and was almost chosen by LikeCoin during its v3 upgrade. Another favorite of mine, the “Web3 check-in” service POAP, while not completely shutting down, entered maintenance mode in March, ceasing new feature development and disabling the issuer distribution interface. Furthermore, decentralized storage provider Storj filed for Chapter 11 bankruptcy protection just the other day—on the very same day BitMart announced its shutdown—in an attempt to restructure its debt and keep operating.
Tally, POAP, and Storj are all services built on solid tech that genuinely met user needs, yet they still failed to evolve into sustainable businesses before their runway ran out. Products still in the exploratory phase fared even worse: Goldfinch (credit), Slingshot (trading), Nifty Gateway (NFT marketplace), Fantasy Top (card game), Dmail (decentralized email), and Yupp (AI model feedback)—all star projects that had raised massive VC funding—have all shut down one after another this year.
Beneath a Collapsing Nest, How Can Any Egg Remain Intact?
With applications on the decline, data analysis and tracking platforms naturally haven’t fared any better. This year’s closures include Parsec and the even more famous Zapper, which once boasted over two million monthly active users.
On the wallet front, at least three major wallets have shut down in 2026: Leap Wallet, Family Wallet, and Ctrl Wallet. Among them, Leap was a Cosmos ecosystem wallet that served LikeCoin v2 and is likely familiar to readers; its founder, whom I once met briefly, is a pragmatic entrepreneur. Unlike standard Web3 applications, wallets manage users’ private keys. If developers aren’t vigilant, a slight delay in patching a vulnerability can lead to disaster. If readers have ever used any of the above wallets, I strongly recommend discontinuing their use immediately and withdrawing your assets if necessary.
Finally, there are the blockchains themselves. The developer company behind Movement, the first Move-language L2 on Ethereum—MVMT Labs—filed for bankruptcy on July 15. Although assets related to Movement have been transferred, whether it can continue operating remains an open question. As for other Ethereum L2s, which were already facing existential crises due to the mainnet becoming increasingly cheap, the bear market has made survival even tougher. The first to shut down was Polynomial Chain, and more are likely to follow. On the other side, the Cosmos ecosystem, built on an app-chain design, has become a disaster zone for L1s. Beyond the confirmed shutdowns of MilkyWay (liquid staking) and UX Chain (formerly Umee), many others are effectively dead—they just haven’t made official announcements or set up exit mechanisms.
The Responsibility of Exiting, and Next Steps for Players on the Field
It’s one thing not to list them, but seeing them all laid out is terrifying—it’s like being able to digest one slice of cake a day, but suddenly having to swallow a hundred at once. No appetite is big enough for that.
What’s that? You haven’t seen news about Web3 projects shutting down? Perhaps it’s because so many projects are closing that it’s no longer considered news, or maybe the Web3 media outlets you used to follow have stopped updating or pivoted elsewhere. Speaking of media, perhaps because hosting old content costs very little, Chinese and English Web3 media rarely declare an official end. In reality, however, an exceptional number have quietly ceased updates or shifted focus to writing about AI. I’m certainly not trash-talking here—everyone has bills to pay, and stopping updates or pivoting makes complete sense from a business standpoint. It’s totally understandable.
Fortunately, even in such tough times, fellow writers like Max (Little Crow) and Astro Hsu (BlockTrend) continue to produce great articles week after week. Keeping Web3 at their core, they hold down the fort, ensuring that as I absorb industry news during the day and rush to finish my newsletter in the dead of night, I don’t feel alone.
The whole article might sound full of gloom and doom, but the survival of the fittest is simply the law of the market. I am not overly pessimistic about the current state of affairs. On the contrary, I respect projects that formally announce their shutdown, properly arrange asset withdrawals or transitions to other services, and see things through to the end. That is far more responsible than turning into a zombie project that gives no explanation, handles nothing, and acts as if it no longer exists simply by never mentioning it again.
Unlike Max and BlockTrend, I am not only a commentator but also an active player on the field. Readers naturally ask me where LikeCoin is headed in the face of such industry hardship. I won’t dodge this sharp question, nor do I want to gloss over it at the end of this article; I will address it in a separate post later.
With no end in sight for this crypto bear market, and capital, talent, users, and attention all focused on AI, the Web3 industry seems to have lost its collective voice—no matter what vision is articulated, there are no listeners. In the days ahead, projects at every level will have no choice but to keep their heads down, build good products, and actively acquire users. They will either erupt out of the silence or perish within it.
p.s. At 2:00 AM, as I was writing this draft, news broke in the bookstore group chat that Tin Yuen Bookstore was closing down. Rooted in a Mong Kok tenement building for fifty years, quietly nourishing generation after generation of readers, Tin Yuen Bookstore—which could easily be considered intangible cultural heritage—is saying goodbye to Hong Kong due to murky red lines and shifting enforcement standards. It isn’t just Web3 projects that will either erupt out of the silence or perish within it.
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