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 unseen in a long time. Jonah (@jonah_b) and Spencer (@CremeDeLaCrypto) delve into this ongoing "great revaluation." The industry's assessments are correct. The industry's assessment of on-chain payments and remittances is correct. Stablecoin trading volume reached a record $33 trillion in 2025, a 72% year-over-year increase. Retail transactions alone surged from 314 million to 3.2 billion in 2025. The industry's assessment of the massive scale of crypto-native applications is 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 a bank, it would rank among the world's largest banks by 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, Nubank—they're all in. It seems clearer than ever now: we're building the right technology, yet the current sentiment is far from celebratory. There's a disconnect between value and price. Given the success, why isn't everyone jubilant? The simplest answer is price: it feels like token prices have been in a one-sided decline for months. But the crypto market has experienced many significant pullbacks since its inception, so why does market sentiment feel worse this time? Some point to precious metals and stocks 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 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 downturns; it 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 delivering a widely adopted network or protocol would translate into token appreciation. But now, that confidence no longer holds. Protocols have been released, adoption has scaled, but token prices haven't kept pace.For builders and investors who expressed their beliefs through token exposure, the end result was: their logic was correct, but their asset exposure was wrong. Where did their investment logic go wrong? A simplified token investment logic is based on three main beliefs: people will build products that create enormous value. This product will capture a significant portion of the value it creates. This 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. The situation has become clear: people are right on point 1. Absolutely right, undeniably. But most of the value doesn't accumulate to token holders. Value shifts to higher layers of the technology 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 the entities capturing the greatest value today look quite different: Phantom, Polymarket, Tether, Coinbase, Kraken, Circle, and Yellow Card. These are all companies that haven't yet issued their own tokens. The reason is simple: the most valuable asset in crypto 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 almost anything a user interacts with on-chain (trading, lending, staking, minting, etc.). We've discussed this dynamic before. 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, DEXs, 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 gaining a decisive victory. Control of distribution channels creates routing power. Routing power commodifies infrastructure. And commoditized infrastructure pushes economic benefits toward marginal costs. This wasn't apparent in the past. This inverted value capture is shaking the entire industry because it contradicts many long-held investment logics and architectural assumptions—that the underlying networks and protocols will capture the majority of 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 early on.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 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 costs, effectively commoditizing telecommunications companies, while value flowed upwards in the technology stack. However, not every technology cycle rewards the application layer. In semiconductors and cloud computing, infrastructure providers ultimately captured a significant amount of value. In these cases, scarcity, capital intensity, and high switching costs concentrated economic power at the bottom of the technology stack. AI now faces a similar question: will the underlying models capture value? Or will open-source models commoditize them and push value upwards in the technology stack? In the crypto 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 the costs 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 mastering user relationships. What happens next? This isn't the eulogy for tokens, nor the end of infrastructure investment. The crypto industry has now traversed three distinct phases: first speculation, then validation, and now we're establishing 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, thus initiating a new cycle of opportunity. Furthermore, there are indeed excellent infrastructure products 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, even becoming tokenized equity instruments with direct claims to cash flows. Hyperliquid is an example of an on-chain application paradigm with a genuine 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 provable link between usage, revenue, and asset value. The industry is on the right track technologically. Now the market is deciding 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. Disclaimer: The content provided here may include information about historical or current portfolio companies/investments managed by Blockchain Capital or its affiliates and is for illustrative purposes only. The views expressed in each blog post are those of the author and do not necessarily reflect the views of Blockchain Capital or its affiliates. Neither Blockchain Capital nor the author guarantees the accuracy, adequacy, or completeness of the information provided in the blog posts. Blockchain Capital, the author, or any other party makes no representation or warranty, express or implied, as to the accuracy, completeness, or fairness of the information provided in the blog posts and assumes no responsibility or liability for any such information. 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