Crypto should not be viewed merely as a single "industry" like quantum computing or space technology, but rather as a completely new asset class and foundational technology. Much like electricity in the last century and the internet over the past few decades, it will permeate and fundamentally transform many existing business sectors, while also creating entirely new industries.
For both entrepreneurs and investors, those who understand this technology and also have deep insight into existing markets—that is, those who understand how crypto technology will reshape these markets and spawn new crypto-enabled giants—will have a significant advantage, regardless of whether the crypto layer is eventually abstracted away (made invisible) on the user end.
If the internet is a protocol for transferring information from one person to another at zero marginal cost, then crypto technology is a protocol for transferring value from one person to another at (almost) zero marginal cost. The internet has disrupted about 20% of global GDP and created many new business models. Crypto technology has the potential to disrupt a larger proportion of global GDP, especially in areas where transactions require trusted third-party participation (such as finance, law, auditing, etc.), while also enabling entirely new business models (like prediction markets, DePIN, etc.).
Much of the current widespread discussion about the field (and the recent view held by some that high returns are a thing of the past) largely stems from semantic misunderstandings. People often use the single word "Crypto" to describe three distinct things:
1. CryptoMoney
2. CryptoTech
3. CryptoApplications
1. CryptoMoney
We define this as the "hard money / store of value" narrative, which is what initially attracted many people to the BTC/Crypto space. While we don't know how much more upside remains or how long it will take, even after the recent decline, we are only about 20 times away from parity with gold's market capitalization.
2. CryptoTech
This category primarily refers to infrastructure like Layer-1s. While innovation still occurs in this area, most application developers we speak with believe that existing technology is "good enough" for the products they want to build. Certain verticals may still require specific middleware, but overall, the next 1000x returns are unlikely to be found here.
3. CryptoApplications
Refers to user-facing B2C and B2B applications—adopted because the crypto solution is superior or lower cost than existing alternatives; also includes new business models built on CryptoTech.
Many early application builders were more focused on token launches than on building the applications themselves. Furthermore, the entire "GameFi" space has so far fallen short of expectations. But now—with the emergence of stablecoin businesses, prediction markets, etc.—we are indeed seeing more high-quality developers realizing they can build real (and even revenue-generating) applications on top of crypto technology.
The combination of AI and Crypto seems very promising to us. We are witnessing AI Agents evolve from single agents focused solely on productivity enhancement to networks of agents participating in large-scale economic behavior, thereby forming an economy of collaboration between agents and humans. This "agent-human collaborative economy" will form a closed loop of value creation and consumption on-chain.
The recent "Token Letter" published by Ribbit Capital paints a picture of the future: an explosion in the number of tokens, and we believe these tokens will ultimately be issued and traded on-chain. Overall, we observe that builders in the Web 3 + AI space are different from the earlier generation of crypto application builders who were primarily focused on the tokens themselves. Developer communities in Asia are emerging with many new talents in AI agent applications, many of whom will build token-enabled companies. Furthermore, market structure bills (especially similar regulatory frameworks outside the US) will act as catalysts, allowing developers to build on crypto infrastructure (crypto rails) with regulatory clarity.
Although we use the term "Crypto" for all three, it is very important to distinguish between 1, 2, and 3 in terms of return potential.
Perhaps as an industry, we should come up with a new word; or perhaps we can specifically use the term "Web 3" to focus on the CryptoApplication category. We believe that the third category is where most future wealth will be created, and it is the area where many 1000x opportunities will be built in the coming years.
We don't know how the market will perform in the short term, but it's always darkest before the dawn. The internet restructured information; crypto will restructure value. Entire industries will not just be changed—they will be reinvented from the ground up.
Original link:A Tale of Three Cryptos: Fixing the Semantics to See the Opportunity
This content is compiled from the article "A Tale of Three Cryptos" published by Panga Capital, intended for information sharing and conveying institutional perspectives, and does not constitute any investment advice, offer, or recommendation for any product. Mentions of "thousand-fold returns," "hundred-fold opportunities," and similar expressions in the text are the original author's personal judgments based on specific market conditions, possessing extremely high subjectivity and uncertainty.
Cryptocurrency assets are highly volatile, and market risks are significant. Readers must maintain independent thinking, strictly comply with local laws and regulations, invest rationally, and bear the risks themselves. The compilation work strives for accuracy, but if there are any discrepancies with the English original, please refer to the English original published by Panga Capital.
