Original title: The Great Repricing
Original author: Spencer Bogart
Original translation by: 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 frustration we haven't seen in a long time.
Jonah (@jonah_b) and Spencer (@CremeDeLaCrypto) provide an in-depth analysis of this ongoing "great revaluation".
The industry's judgment is correct.
The industry's assessment of on-chain payments and remittances is correct. Stablecoin transaction volume reached a record $33 trillion in 2025, a year-on-year increase of 72%. In 2025 alone, retail transaction volume surged from 314 million to 3.2 billion transactions.
The industry's assessment that crypto-native applications would reach enormous scale was correct. Polymarket has become a widely popular global event prediction tool. Phantom has become a wallet used daily by millions of users—with 15 million monthly active users and continuing to grow.
The industry's assessment of the effectiveness of DeFi is correct. If Aave were considered a bank, it would rank among the world's largest banks in terms of deposit base.
The industry's assessment that almost all major fintech companies and banks would implement on-chain strategies was correct. Stripe, BlackRock, SoFi, Goldman Sachs, Citigroup, JPMorgan Chase, Visa, PayPal, Revolut, and Nubank have all entered the fray.
It seems clearer now than ever: we are building the right technology, yet the current mood is far from celebratory.
The disconnect between value and price
Given the success, why isn't everyone ecstatic? The simplest answer is the price: it feels like the token price has been on a one-sided downward trend for months.
But the crypto market has experienced several significant pullbacks since its inception, so why does market sentiment feel worse this time? Some point to the fact that precious metals and stocks are hitting new highs while tokens are falling. However, we believe this is merely an exacerbating factor; it's salt in the wound, not the wound itself.
The real reason may lie in the fact that the market is forcing industry contributors to accept a harsher new reality: the divergence between business data and token prices may not automatically correct itself. The rules of the game have changed, and new data may overturn long-held investment logic.
This differs from previous cyclical declines; it reflects more of a structural reassessment of "where value is most likely to accumulate."
During past downturns, teams could look inward, focus on product development, and firmly believe that delivering a widely adopted network or protocol would translate into token appreciation. However, that confidence no longer holds true. Protocols have been released, and adoption has reached a certain scale, but the token price hasn't kept pace.
For builders and investors who express their beliefs through token exposure, the end result is that their logic is correct, but their asset exposure is wrong.
Where did the investment logic go wrong?
A simplified logic for token investment is primarily based on the following three beliefs:
People will build products that can create enormous value.
This product will capture a significant portion of the value it creates.
The value captured will flow 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. It's also become clear: people were right on point 1. Absolutely right, undeniably. But most of the value hasn't accumulated for token holders.
Value shifts to higher layers of the technology stack
Most people's exposure to crypto assets is achieved through tokens. And most tokens represent infrastructure: L1, L2, cross-chain bridges, oracles, middleware, protocols, DEXs, yield vaults, etc.
But the entities capturing the greatest value today look quite different: Phantom, Polymarket, Tether, Coinbase, Kraken, Circle, and Yellow Card. These are all companies that (currently) haven't issued their own tokens.
The reason is simple: the most valuable asset in the crypto space is user relationships.
If you control the user interface and the flow of transactions, you control the distribution channels. And if you control the distribution channels, you can profit from virtually any on-chain product a user encounters (trading, lending, staking, minting, etc.). We've discussed this dynamic in previous articles.
On the other hand, infrastructure is becoming increasingly substitutable. When block space is plentiful and switching costs are low, the only remaining competitive tool is price. Cross-chain bridges, L2, DEX, and even liquidity can be replaced. Pricing power is being eroded.
Ultimately, in this economic game between the infrastructure layer and the distribution layer, we believe the distribution layer is achieving a decisive victory. Control over distribution channels creates routing rights. Routing rights commodify infrastructure. And commodified infrastructure pushes economic benefits toward marginal cost.
This was not obvious in the past.
This inversion of value capture is shaking the entire industry because it contradicts many long-standing investment logics and architectural assumptions—that the underlying networks and protocols will capture most of the value.
However, this uncertainty is not an anomaly unique to the crypto industry, but rather a common theme throughout the technology cycle. History shows that the most important questions about value capture and profit accumulation are rarely answered in the early stages.
In the early days of the internet, some believed that telecommunications companies would be the biggest winners because they owned the pipes to transmit every single byte of data. The bullish argument was that telecommunications companies could charge proportionally to the value of the data transmitted—which wasn't entirely unreasonable. However, fierce competition pushed data prices to marginal cost, completely commoditizing telecommunications companies, while value flowed to higher layers of the technology stack.
However, not every technology cycle rewards the application layer. In semiconductors and cloud computing, infrastructure providers ultimately capture a significant amount of value. In these cases, scarcity, capital intensity, and high switching costs concentrate economic power at the bottom of the technology stack.
AI currently faces the same question: Will the basic models capture value? Or will the open-source model commoditize them and push value to higher layers of the technology stack?
In the crypto industry's version, the original assumption was that liquidity and network effects would create lasting infrastructure winners and enable meaningful value capture. Today, applications and aggregators, positioned between users and the underlying infrastructure, rationally route transaction volume to where fees are lowest. The result is a structural decoupling: the "pipeline" is more congested than ever before, but value capture has shifted upwards to the level of managing user relationships.
What will happen 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 defining where value capture will occur. The current unease stems from this final paradigm shift.
Infrastructure and applications exist in a continuous feedback loop: as applications reach new scales, they eventually encounter bottlenecks, requiring next-generation infrastructure to address them, thus ushering in a new cycle of opportunity. Furthermore, excellent infrastructure products do exist with genuine pricing power, but this power must be earned and proven through effort, not taken for granted.
Tokens will also make a comeback, but they may look different: they are gradually moving away from an overemphasis on governance and towards direct participation in application-layer economics, or even becoming tokenized equity instruments with direct claims to 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.
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 either. The market demands a direct and verifiable link between usage, revenue, and asset value.
The industry is on the right track in terms of technology. Now the market is determining who will reap the rewards. Those builders who solve not only value creation but also value capture will define the next era of the industry.
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