As Bitcoin approaches its all-time high, it might seem like the US cryptocurrency industry is booming. But in reality, the opposite is happening.

In recent days, major industry players have been announcing layoffs one after another. ConsenSys has cut 20% of its staff, decentralized exchange dYdX has reduced its team by 35%. Additionally, a major exchange has implemented a 15% staff reduction. During earnings reports, one large exchange reported results below expectations, creating a gloomy atmosphere across the crypto companies.

What’s really going on here?

Bitcoin’s price is definitely rising. But do you know where that money is flowing? While Wall Street giants are buying billions of dollars worth of Bitcoin through ETFs, the money isn’t reaching native crypto companies. Institutional investors like BlackRock are dominating the market with low fees and creditworthiness.

Ultimately, Bitcoin’s strength no longer necessarily translates to the overall industry’s benefit. In fact, companies related to altcoins are facing even tougher conditions.

Regulatory uncertainty is also a major factor. The SEC’s hostile stance shows no signs of easing, and leading crypto firms have already spent over $400 million on legal costs. ConsenSys CEO also explicitly stated that the recent layoffs are related to “several million dollars” spent on legal defense.

A lot of capital is still on the sidelines. Investors are cautious about entering the space until regulations become clearer. Political uncertainty persists, and overall industry activity remains subdued.

However, some experts point out that even if the government accepts cryptocurrencies, native companies will still struggle. There are too many exchanges in the market, and ultimately, many companies will either disappear or be acquired.

A true bull market requires new applications and use cases. In past cycles, NFTs and dApps helped energize the market. But this time, there’s no groundbreaking innovation inspiring people.

The situation where only Bitcoin is leading the charge may not truly constitute a healthy bull market for the entire industry.