Introduction
The world is focused on the cryptocurrency market, attracting the attention of investors, institutions and governments. But for all the technological progress and increasing adoption, crypto is still a speculative playground. Joao Wedson, a respected financial commentator, says speculation still reigns over fundamentals. In this post, we review his thesis and the supporting evidence to consider the implications 2025 and beyond for investors.
What Is Speculation in Crypto?
Speculation means buying assets to bet on their price moves rather than a function of their intrinsic value. In the traditional markets, speculation is balanced by fundamental analysis. In crypto, however, many investors chase hype, social media trends or the “greater fool theory” — buying with the belief that someone else will pay more later.
Crypto Fundamentals Defined
Fundamentals are the elements that provide a cryptocurrency something real to offer:
• Security of the blockchain (network robustness and dependability)
• Adoption (users, merchants, institutions)
• Development team (working on the project)
• Policy (legal certainty and oversight)
• Real-world utility use cases (as payments, smart contracts and DeFi)
Though these are the fundamentals that matter, they tend to be secondary to market sentiment and speculative trading.
Joao Wedson’s Perspective: Speculation vs Rationale
Wedson’s main point is that the price action of cryptos continues to be powered by speculation. Key observations include:
• Extreme volatility driven by news, rumors and social media.
• Individual investors piling in during bull runs to take advantage of fast money.
• Institutional hype around high returns instead of risks underneath.
He acknowledges that better technology combined with more and more widespread use and shifting regulations are driving solid fundamentals, but he insists price still reflects speculative forces.
Evidence of Speculation’s Dominance
Historical Price Trends
• 2017 bull run driven by ICO fever and press hype.
• 2021 rally fueled by institutional adoption, gains from celebrities’ tweets and DeFi and NFTs.
• 2024–25 mania linked to machinations re Bitcoin ETFs, regulatory developments and macro forces—not protocol upgrades.
Investor Sentiment and Market Dynamics
Crypto sentiment ebbs and flows on social media, news headlines and market narratives. Platforms such as Twitter and Reddit have the power to build up hype or foster panic in hours.
Retail Investors and Speculation
Retail traders, not surprisingly, frequently use trends and short-term price signals, contributing to a feedback loop that can magnify speculative action.
Institutional Involvement: A Double-Edged Sword
Demand was stoked by the launch of a Bitcoin ETF in 2024, but an awful lot of the buying appears to have been speculative. Companies scrambling to ride the alpha can forget about project fundamentals, amplifying price gyrations.
Signs Fundamentals Are Gaining Ground
Fundamentals remain strong, despite the grip of speculation:
• Venture funding in the first quarter of 2025 totaled $14.7 billion, or nearly 230 percent more than year-ago levels.
• There is record developer activity leading to improvements in protocols.
• Regulatory certainty is starting to advance, with governments developing well-rounded frameworks.
• There is increasing real-world adoption, from payments to remittances to decentralized applications.
Certainly these are supports for lasting gains, but they also tend to be long-term influences on price.
Gaping the Abyss Between Theory and Fundamentals
A disconnect persists. For example, news of Fidelity introducing Bitcoin in 401(k) plans and the Biden Executive Order on crypto did not result in sustained price rallies. That implies the market is in a transition — no longer solely driven by speculation, but not yet entirely determined by fundamentals.
The Road to a Fundamentals-Based Market
Experts predict a gradual shift:
• Leading on chain analytics and data will grant deeper fundamental analysis.
• There will be greater transparency, and far more scrutiny, as institutions adopt it.
• Clear regulation will ease uncertainty and draw long-term capital.
• Mass-market fusion will tether crypto value to real-world utility.
Speculation versus fundamentals will continue in force, at least until that point.
What This Means for Investors
Investors are navigatings both a speculative market and the attendant opportunities and risks:
Opportunities
• Ability to rise quickly in bull markets.
• Access to high-growth projects before fundamentals catch up.
Risks
• Sharp volatility and perhaps market corrections.
• Heavy losses for later-cycle buyers.
• A shift in sentiment and prices brought about by regulatory changes.
How to Play a Market That May Be Too Risky
• Spread your risk across a range of assets and sectors.
• Concentrate on a solid project with security, adoption and real-world use.
• Keep updated on market news, regulation changes and technology advancements.
• Control risk with specific objectives, stop-loss orders and position limits.
• Take a long view toward accumulating value as the fundamentals evolve.
Conclusion: Balancing Speculation and Fundamentals
History, behavior and market dynamics are behind Joao Wedson’s view that speculation, not value is what underpins crypto. While the fundamentals are positive, speculative forces continue to drive prices. If the market matures we might see a more fundamentals-driven world. Until it does, however, investors will need to weigh the siren call of fast money against a coldly dispassionate focus on intrinsic value. Doing so could help them better traverse one of the most dynamic investment environments in recent times.
