Original Title:The Great Repricing
Original Author:Spencer Bogart
Original Compilation:Ken,ChainCatcher
The current state of the cryptocurrency industry is a paradox: as an industry, we have achieved success beyond our wildest imaginations, yet the prevailing sentiment is one of extreme despondency that we haven't seen in a long time.
Jonah (@jonah_b) and Spencer (@CremeDeLaCrypto) delve deep here into the ongoing "Great Repricing."
The Industry Was Right
The industry was right about on-chain payments and remittances. Stablecoin transaction volume reached a record $33 trillion in 2025, a 72% year-over-year increase. In 2025 alone, retail transaction volume skyrocketed from 314 million to 3.2 billion transactions.
The industry was right that crypto-native applications would reach massive adoption. Polymarket became a widely popular global event prediction tool. Phantom became an essential daily wallet for millions of users—15 million monthly active users and growing.
The industry was right that DeFi works. If Aave were considered a bank, it would rank among the world's largest banks by deposit base.
The industry was right that almost all major fintech companies and banks would implement on-chain strategies. Stripe, BlackRock, SoFi, Goldman Sachs, Citi, JPMorgan, Visa, PayPal, Revolut, Nubank. They are all in.
It seems clearer than ever that we are building the right technology, yet the current sentiment is far from celebratory.
The Decoupling of Value and Price
Given the success, why isn't everyone ecstatic? The simplest answer is price: it feels like token prices have been falling in one direction for months.
But crypto markets have experienced significant pullbacks since their inception, why does this market sentiment feel worse? Some point out that precious metals and stock markets are hitting new highs while tokens are falling. But we believe this is merely an aggravating factor; it's salt in the wound, not the wound itself.
The real reason may be that the market is forcing industry contributors to accept a harsher new reality: the divergence between business metrics and token prices may not automatically correct itself. The rules of the game have changed, and new data may overturn long-held investment theses.
Unlike previous cyclically driven declines, this reflects more of a structural repricing 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 have launched, adoption has 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 largely based on three core 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 accrue to token holders.
For years, the questions were simple: Does it work? Can it scale? Now those big questions have been answered (yes, it works; yes, it scales), and the market's focus has shifted to value capture. And it's become clear: people were right about point 1. Absolutely right, indisputably. But most of the value is not accruing to token holders.
Value Shifting Up the Stack
Most people's crypto asset exposure is 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 control the distribution channel, you can profit from almost any on-chain product the user touches (trading, lending, staking, minting, etc.). We've written about this dynamic before.
On the other hand, infrastructure is becoming more commoditized. 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 substituted. 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 power. Routing power commoditizes infrastructure. And commoditized infrastructure pushes economics toward marginal cost.
This Wasn't Apparent 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 pool formation are rarely answered early.
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 bull case: telecoms could charge proportionally to the value of the data transmitted—not an unreasonable assumption. However, fierce competition drove data prices to marginal cost,彻底 commoditizing telecoms, and value flowed up the stack.
Yet, not every tech cycle rewards the application layer. For semiconductors and cloud computing, the infrastructure providers ended up capturing significant value. In these examples, it was scarcity, capital intensity, and high switching costs that concentrated economic power at the bottom of the stack.
AI currently faces the same question: will the foundational 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 durable infrastructure winners with meaningful value capture. Today, applications and aggregators sit between users and the underlying infrastructure, rationally routing volume to wherever fees are lowest. The result is a structural decoupling: the "pipes" are more congested than ever, but value capture has shifted upwards, to the layer that controls the user relationship.
What Happens Next
This is not a eulogy for tokens, nor is it the end of infrastructure investment.
The crypto industry has now moved through three distinct phases: first speculation, then validation, and now we are establishing where value capture will occur. The current discomfort stems 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, there are excellent infrastructure products with genuine pricing power, 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 over-emphasis 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 and application-layer economics onto their respective tokens.
For now, the rules 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 on the technology direction. Now the market is deciding who gets rewarded. The builders who solve not just for value creation, but also for value capture, will define the next era.
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