2026 Will Make This Obvious

Stop forecasting the future. Study the present.

Most market outlooks try to predict the future. That approach makes less sense today - especially in crypto - because the limiting factor is no longer uncertainty about what might happen. It is a reluctance to fully process what already has.

Crypto is now old enough, large enough, and used enough that its economics are no longer theoretical. The data is no longer sparse. Consequently, the most valuable exercise is not to project stories forward, but to reconcile reality backward.

If we sit with the present long enough, the shape of 2026 becomes obvious.

The End of the Infrastructure Phase

Crypto spent its first decade optimizing supply. We built faster chains, cheaper execution, and more blockspace. That work is largely complete. The marginal cost of computation has collapsed, and settlement has become abundant. Long gone are the days of paying $1000s per transactions during peak NFT season.

From a technical perspective, the system now resembles reliable infrastructure rather than innovation. What did not follow at the same pace was demand.

This creates a central tension: tens of millions of active users support a market capitalization that rivals entire public-market sectors. In most industries, such a mismatch resolves through explosive adoption or prolonged valuation compression. I believe the latter is more likely.

For years, adoption was treated as a latent catalyst that would eventually justify prices. Now, it functions as an audit. Usage reveals revenue, fees, and value capture rather than obscuring them. The market is no longer waiting for adoption; it is examining what adoption produces. It was true for the internet, and it will be true for crypto.

The Economics of Abundance

As blockspace grew cheaper and more abundant, fees fell. Ethereum’s scaling efforts drove roughly a 95% fee decline. This outcome is only surprising if technical progress is mistaken for economic leverage. Lower costs benefit users, but they do not confer pricing power on infrastructure providers nor do they necessarily translate to more demand overnight. Abundance usually has the opposite effect - particularly when the marginal cost of creating new blockchain infrastructure continues to fall.

Unlike physical infrastructure, digital, open-source systems are easy to replicate. The result is an oversupply problem: hundreds of digital highways, and too few cars willing to pay a toll.

Crypto has effectively built massive highways ahead of demand. The consumer surplus is real, but the protocol-level economics are not. This is Jevons Paradox playing out more slowly than hoped: lower prices may eventually stimulate usage, but markets price the path, not the destination. In the meantime, margins compress.

By 2026, this reality will stop being debated. Infrastructure will begin to be valued like infrastructure.

The Great Re-Rating

What abundance has produced is not stagnation, but a growing mispricing. Today, the infrastructure layer commands the overwhelming majority of crypto’s market capitalization, even as it captures only a small fraction of the system’s economic output.

The disparity is stark:

• Blockchains: Represent >90% of aggregate market value, yet retain <12% of total fees.

• DeFi Protocols: Capture >70% of fees, yet account for <10% of market cap.

This is the pair trade of the decade. This is not a theoretical argument about where value should accrue; it is an observation about where value already does accrue.

Markets can tolerate these imbalances for extended periods, particularly in industries with strong brand and memetic power. Narratives can delay repricing and incentive-fueled liquidity can obscure fundamentals, but they do not eliminate the underlying arithmetic. Over time, valuation and economics converge.

The direction of travel is clear: infrastructure re-rates down, and apps and user aggregators re-rate up. The current state where fee capture has migrated upward while market capitalization has not cannot persist indefinitely.

Real World Adoption and Moats

We see the same pattern when crypto meets the real economy.

Stablecoins work. They reduce settlement time and cost, improving treasury efficiency. We see major entities like Klarna and Western Union adopting these rails. However, efficiency is not the same as value capture. When incumbents adopt crypto rails, most of the savings remain with the business that owns the customer relationship and the balance sheet. The rails enable change; they do not capture it.

Value disproportionately accrues where users are aggregated and where offramps are controlled. Unless crypto protocols own distribution, they merely strengthen existing businesses.

Simultaneously, the assumption that first movers build durable moats is being tested. The data is less supportive of this than many believe. Liquidity is elastic, users are incentive-driven, and switching costs remain low. As seen in the DEX markets, incumbents can lose market share quickly. Protocols retain mindshare longer than they retain pricing power.

Systematic Mean Reversion

All of this sits within a broader macro reality: crypto is a high-beta asset class, and today the market is priced well above historical norms. Gravity eventually asserts itself. From here, the probability of downside over the next year is higher than the probability of further upside.

This does not require crypto or AI to fail. When assets are priced for perfection, it takes very little to undermine the thesis. The more relevant and consequential question is how much of that future has already been priced in.

At current levels, a great deal of it is.

When assets trade persistently above historical medians, mean reversion becomes a probability, not a theory. In crypto, that adjustment tends to be faster and more severe because intrinsic anchors are weak. No forecasts about rate cuts or stimulus are required; this follows directly from positioning, flows, and market structure.

It may be true that consumers gamble more during downturns, and that the affordability crisis extends the ‘long casino’ thesis. But I am unwilling to bet on it. The volatility of fees is revealing. You don’t value casino-like flow like recurring software revenue.

Conclusion

The charts circulating in this post are not forecasting tools. They are mirrors. They reflect an ecosystem governed by a familiar set of forces.

Over the past decade, the hardest problem was building the infrastructure. That work is largely done. The harder task now is generating demand for systems that are already robust and scalable.

We have built massive highways that lack recurring traffic. Future innovation at the infrastructure layer may prove incrementally useful, but its economic value will ultimately depend on onboarding billions of users.

However, as adoption grows, it exposes overvaluation. As abundance increases, competition compresses margins. At the infrastructure layer, more participants dilute value capture.

Value predictably migrates toward user-facing aggregators. Meanwhile, demand and revenue remain tightly levered to macro conditions, making the system more cyclical than many expect.

In short, the charts reflect:

• Adoption that reveals overvaluation

• Weaker value capture at the infrastructure layer

• Value flowing to user aggregators

• Revenue and demand tied to macro cycles

In 2026, these dynamics will no longer feel novel. They will feel obvious. The surprise will not be what happened, but how long it took to accept what was already visible.

I remain long crypto-enabled businesses. Companies that use technology to improve efficiency offer a more attractive return profile than assets driven primarily by speculation. We are moving toward a system in which money moves near-instantly, continuously, and increasingly independent of traditional banking rails. Payments are being unbundled from banks.

The implications are already emerging. Incumbents like Klarna and Western Union will serve as useful case studies on how stablecoins reshape unit economics and competitive dynamics. Regulatory plumbing matters as well. Developments such as the Federal Reserve’s Skinny Master Account proposal warrant close attention.

The future is crypto-enabled, but largely invisible as durable infrastructure tends to be. Most businesses will eventually adopt crypto to remain competitive. The central challenge is no longer building the rails. It is generating sustainable demand for the commoditized, scalable blockspace that already exists.

That is a generational opportunity.