Blockchain Partners: Crypto Assets Are Undergoing a Major Revaluation of Value

Original Title: The Great Repricing

Original Author: Spencer Bogart

Original Compiler: 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 that we have not seen in a long time.

Jonah (@jonah_b) and Spencer (@CremeDeLaCrypto) delve into the ongoing "great repricing" happening right now.

The Industry's Judgment is Correct

The industry's judgment on on-chain payments and remittances is correct. In 2025, stablecoin transaction volume reached a record $33 trillion, a 72% year-over-year increase. In just 2025 alone, retail transaction volume skyrocketed from 314 million to 3.2 billion.

The industry's judgment that crypto-native applications will reach massive scale is correct. Polymarket has become a widely popular global event prediction tool. Phantom has become an essential wallet for millions of users, with monthly active users reaching 15 million and continuing to grow.

The industry's judgment on the effectiveness of DeFi is correct. If we consider Aave as a bank, based on deposit base, it would rank among the largest banks in the world.

The industry's judgment that almost all major fintech companies and banks will implement on-chain strategies is correct. Stripe, BlackRock, SoFi, Goldman Sachs, Citibank, JPMorgan, Visa, PayPal, Revolut, Nubank. They have all entered the space.

It seems clearer now than ever: we are building the right technology, yet the current sentiment lacks any celebratory tone.

The Disconnection Between Value and Price

Given the success, why is there no overwhelming joy? The simplest answer is price: it feels like token prices have been on a one-way decline for months.

But the crypto market has experienced multiple significant pullbacks since its inception; 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 declining. But we believe this is merely an exacerbating factor; it is salt on the wound, not the wound itself.

The real reason may lie in the market 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 is different from previous cyclical downturns; it more reflects a structural reassessment of "where value is most likely to accumulate."

In past downturns, teams could look inward, focus on product development, and firmly believe that as long as they delivered a widely used network or protocol, it would translate into token appreciation. But now it seems that this confidence is no longer valid. Protocols have launched, and adoption has scaled, yet token prices have not followed suit.

For those builders and investors expressing beliefs through token exposure, the ultimate outcome is: their logic was correct, but their asset exposure was wrong.

Where Investment Logic Went Wrong

A simplified token investment logic is primarily based on three beliefs:

• People will build products that create significant value.

• The product will capture a substantial portion of the value it creates.

• This captured value will flow to token holders.

For years, the question was simple: does it work? Can it scale? Now these big questions have been answered (yes, it works; yes, it can scale), and the market's focus has shifted to value capture. The situation has also become clearer: people are correct on point one. Absolutely correct, beyond dispute. But most of the value has not accumulated to token holders.

Value Shifting Up the Tech Stack

Most people's crypto asset exposure is achieved through tokens. And most tokens represent infrastructure: L1, L2, cross-chain bridges, oracles, middleware, protocols, DEXs, yield vaults, etc.

But now, the entities capturing the most value look entirely different: Phantom, Polymarket, Tether, Coinbase, Kraken, Circle, Yellow Card. These are all companies (currently) that have not issued tokens.

The reason is simple: the most valuable assets in crypto are user relationships.

If you control the user interface and transaction flow, you control the distribution channels. And if you control the distribution channels, you can profit from almost any on-chain product that users interact with (trading, lending, staking, minting, etc.). We have previously discussed this dynamic.

On the other hand, the substitutability of infrastructure is increasing. When block space is abundant and switching costs are low, the only remaining competitive lever is price. Cross-chain bridges, L2s, DEXs, and even liquidity can be substituted. Pricing power is being eroded.

Ultimately, in this economic interest 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 power. Routing power commoditizes infrastructure. And commoditized infrastructure pushes economic benefits toward marginal costs.

This Was Not Obvious in the Past

This inversion of value capture is shaking the entire industry because it contradicts many long-held investment logics and structural assumptions—that the underlying networks and protocols would capture most of the value.

But this uncertainty is not a peculiar anomaly of the crypto industry; it is a common theme throughout tech cycles. History shows that the most important questions about value capture and profit retention are rarely answered early on.

In the early days of the internet, some believed that telecom companies would be the biggest winners because they owned the pipes that transmitted every byte of data. The bullish rationale was that telecom companies could charge proportionally based on the value of the data transmitted—this was not without merit. However, fierce competition drove data prices down to marginal costs, completely commoditizing telecom companies, while value flowed up the tech stack.

However, not every tech cycle rewards the application layer. For semiconductors and cloud computing, infrastructure providers ultimately captured significant value. In these examples, it was scarcity, capital intensity, and high switching costs that concentrated economic power at the bottom of the tech stack.

AI currently faces the same question: will foundational models capture value? Or will open-source models commoditize them and push value up the tech 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 stand between users and the underlying infrastructure, rationally routing transaction volume to the lowest fee locations. The result is a structural decoupling: the "pipes" are more congested than ever, but value capture has shifted upward to the level that controls 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 passed through three distinctly different 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 scales, they will eventually encounter bottlenecks that require the next generation of infrastructure to solve, thus opening a new cycle of opportunities. Moreover, there are indeed excellent infrastructure products that possess genuine pricing power, but this pricing power must be earned and proven, 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 rights, shifting toward direct participation in application layer economics, and even becoming tokenized equity tools with direct claims on cash flows.

Hyperliquid is an example of an on-chain application with a real distribution strategy, and its economic model is unified around a single asset. A broader evolution in this direction is already underway: Morpho, Uniswap, and now Aave seem to be moving toward unifying protocol layer and application layer economics around their respective tokens.

Currently, the rules of the game have changed, and the market has sent a clear signal: mere utility is not enough. Mere scale is also not enough. The market demands a direct and demonstrable link between usage, revenue, and asset value.

The industry is right in its technical direction. Now the market is deciding who can reap the rewards. Those builders who not only solve value creation but also address value capture will define the next era of the industry.

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