Author: Spencer Bogart
Compiled by: Ken, ChainCatcher
Original title: Blockchain Partner: Crypto Assets Are Undergoing a Great Value Reassessment
The current state of the cryptocurrency industry is a paradox: as an industry, we have achieved success beyond our wildest dreams, yet the prevailing sentiment is one of extreme frustration that we haven't seen in a long time.
Jonah (@jonah_b) and Spencer (@CremeDeLaCrypto) delve deep into the "Great Value Reassessment" currently underway.
The Industry's Judgment Was Correct
The industry was correct in its judgment about on-chain payments and remittances. Stablecoin transaction volume reached a record $33 trillion in 2025, a 72% year-on-year increase. In 2025 alone, retail transaction volume surged from 314 million to 3.2 billion.
The industry was correct in its judgment that crypto-native applications would reach massive scale. Polymarket has become a widely popular global event prediction tool. Phantom has become an essential daily wallet for millions of users—with 15 million monthly active users and growing.
The industry was correct in its judgment that DeFi works. If Aave were considered a bank, it would rank among the world's largest banks by deposit base.
The industry was correct in its judgment that almost all major fintech companies and banks would implement on-chain strategies. Stripe, BlackRock, SoFi, Goldman Sachs, Citi, JPMorgan Chase, Visa, PayPal, Revolut, Nubank. They are all in the game now.
It seems clearer now than ever: we are building the right technology, yet the current sentiment is far from celebratory.
The Disconnect Between Value and Price
Given the success, why isn't everyone ecstatic? The simplest answer is price: it feels like token prices have been falling unilaterally for months.
But the crypto market has experienced significant pullbacks since its inception, so why does the market sentiment feel worse this time? Some point out that precious metals and stock markets are hitting new highs while tokens are falling. But we believe this is merely an exacerbating factor; it's salt in the wound, not the wound itself.
The real reason might be that the market is forcing industry contributors to accept a harsher new reality: the divergence between business data and token prices might not automatically correct itself. The rules of the game have changed, and new data may overturn long-held investment theses.
Unlike previous cyclically driven downturns, this reflects more of a structural reassessment of "where value is most likely to accrue."
In past downturns, teams could look inward, focus on product development, and firmly believe that delivering a widely used network or protocol would translate into token appreciation. That confidence now seems misplaced. Protocols are launched, adoption is scaled, but token prices haven't followed.
For builders and investors who expressed their conviction through token exposure, the end result is: their logic was right, but their asset exposure was wrong.
Where the Investment Thesis Went Wrong
A simplified token investment thesis was primarily based on three beliefs:
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People will build products that create tremendous value.
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That product will capture a significant portion of the value it creates.
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That captured value will flow to token holders.
For years, the questions were simple: Does it work? Can it scale? Now these big questions have been answered (Yes, it works; Yes, it scales), and the market's focus has shifted to value capture. It has also become clear: people were right about point 1. Absolutely right, indisputably so. But most of the value did not accrue to token holders.
Value Shifts Up the Stack
Most crypto asset exposure is achieved through tokens. And most tokens represent infrastructure: L1s, L2s, bridges, oracles, middleware, protocols, DEXs, yield vaults, etc.
But the entities capturing the most value today look very different: Phantom, Polymarket, Tether, Coinbase, Kraken, Circle, Yellow Card. These are (currently) companies that have not issued tokens.
The reason is simple: the most valuable asset in crypto is the user relationship.
If you control the user interface and the flow of transactions, you control the distribution channel. And if you master the distribution channel, you can profit from almost any on-chain product the user touches (trading, lending, staking, minting, etc.). We have written about this dynamic before.
On the other hand, infrastructure is becoming increasingly fungible. When block space is abundant and switching costs are low, the only remaining means of competition is price. Bridges, L2s, DEXs, and even liquidity can be replaced. Pricing power is being eroded.
Ultimately, in this economic tug-of-war between the infrastructure layer and the distribution layer, we believe the distribution layer is winning decisively. Control over distribution channels creates routing rights. Routing rights commoditize infrastructure. And commoditized infrastructure pushes economic returns toward marginal cost.
This Wasn't Obvious Before
This inversion of value capture is shaking the industry because it contradicts many long-held investment theses and architectural assumptions—namely, that the underlying networks and protocols would capture most of the value.
But this uncertainty is not a crypto-specific anomaly; it's a common theme throughout technology cycles. History shows that the most important questions about value capture and profit pooling are rarely answered early on.
In the early internet days, some believed telecom companies would be the biggest winners because they owned the pipes transmitting every byte of data. The bullish rationale: telecoms could charge proportionally to the value of the data transmitted—not an unreasonable thought. However, fierce competition drove data prices to marginal cost, thoroughly commoditizing telecoms, and value flowed up the stack.
Yet, not every technology cycle rewards the application layer. For semiconductors and cloud computing, the infrastructure providers ultimately captured significant value. In these examples, scarcity, capital intensity, and high switching costs concentrated economic power at the bottom of the stack.
AI currently faces the same question: Will foundation models capture value? Or will open-source models commoditize them and push value up the stack?
In the crypto industry's version, the original assumption was: liquidity and network effects would create lasting infrastructure winners and enable meaningful value capture. Now, applications and aggregators sit between users and the underlying infrastructure, rationally routing volume to the places with the lowest fees. The result is a structural decoupling: the "pipes" are more congested than ever, but value capture has shifted upwards, to the layer that controls user relationships.
What Happens Next
This is not a eulogy for tokens, nor is it the end of infrastructure investment.
The crypto industry has now gone through three distinct phases: first speculation, then validation, and now we are establishing where value capture will occur. The current discomfort stems precisely from this final paradigm shift.
Infrastructure and applications exist in a continuous feedback loop: as applications reach new scale, they eventually hit bottlenecks requiring the next generation of infrastructure to solve, opening new cycles of opportunity. Furthermore, excellent infrastructure products with genuine pricing power do exist, but that power must be earned and proven, not assumed.
Tokens will also make a comeback, but they will likely look different: they are moving away from an overemphasis on governance rights towards direct participation in application-layer economics, or even becoming tokenized equity instruments with direct claims on cash flows.
Hyperliquid is an example of an on-chain application with a real distribution strategy and an economic model unified around a single asset. A broader evolution in this direction is already underway: Morpho, Uniswap, and now Aave, all seem to be moving towards unifying protocol-layer and application-layer economics onto their respective tokens.
For now, the rules of the game have changed, and the market is sending a clear signal: utility alone is not enough. Scale alone is not enough. The market demands a direct and provable link between usage, revenue, and asset value.
The industry was right about the technological direction. Now the market is deciding who gets rewarded. The builders who solve not just value creation, but also value capture, will define the industry's next era.
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