The Most Uncomfortable Phase of Crypto Has Begun

Adoption is accelerating. Prices are lagging and this phase may last for years

The Price–Adoption Paradox

Adoption will continue. Prices may not recover for a long time.

That tension between accelerating real-world use and lagging market prices is not a bug. It is the defining feature of this phase of crypto’s evolution.

If you hold a ten-year view on the industry, the odds are attractive. Holding that view, however, will be psychologically difficult. You should be prepared to watch adoption expand while prices stagnate or drift lower. You should also be prepared to watch others make money elsewhere (AI, equities, whatever the market decides to celebrate next) while crypto looks forgotten.

This will feel unfair. It will feel like a slog. But prices should lag. Many of these assets never deserved their prior valuations in the first place.

The market does not care about adoption…until it does again.

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Adoption Can Expose Overvaluation

Adoption will initially make things worse.

As crypto infrastructure gets used at scale, it will become clearer how much capital was deployed ahead of sustainable demand. Adoption will stress-test business models, not validate them. Some will fail quietly. Others will survive, but at far lower valuations than their peak narratives implied.

Crypto is graduating from being the main character to being invisible. From being exciting to being boring.

That is a good thing.

This pattern is not new. During the dot-com crash, the Nasdaq fell roughly 78%. At the same time, internet usage surged. Global users tripled. Broadband infrastructure was built. The market took many years to recover, but the internet steadily took over the world. Software ate the world while investors licked their wounds.

Foundational technologies do not reward impatience.

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Who Benefits When Infrastructure Wins?

This transition will feel uncomfortable for many participants.

Builders who poured years into open-source repositories will watch enterprises copy their work and capture much of the economic upside. Crypto-native VCs that funded early infrastructure will see Sand Hill Road VCs extract more value. Retail investors who bought tokens rather than equity may feel stranded as companies benefit from networks without transferring much value back to tokenholders.

Some of this is structural. Some of it is self-inflicted.

The industry is adapting. Open systems evolve quickly. Incentives change. Value capture mechanisms improve. But not all models will survive long enough to benefit from that evolution.

Adoption is happening in plain sight. The market simply does not care yet. It may take years for it to reconnect the dots and recognize crypto as a core operating system rather than a speculative asset class.

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Price Cycles and Adoption Cycles Are Different

Price cycles are driven by psychology and liquidity.

Adoption cycles are driven by utility and infrastructure.

They are related, but they are not the same. Historically, prices led adoption. That is common in early technological revolutions. Now, adoption is leading and prices are lagging.

The marginal buyer of crypto assets is currently elsewhere. Capital is chasing AI. That may persist. It may reverse. That is not something we control.

What we can observe is that it has become increasingly difficult to imagine a world without stablecoins, without transparent financial rails, without systems that settle instantly, globally, and continuously.

The hardest lesson of cycles is accepting that adoption and prices can remain disconnected longer than feels reasonable, and that compounding requires staying rational while others lose patience.

This is not a HODL manifesto.

Many crypto projects will never recover. Some are broken by design. Others lack moats. Some have simply been abandoned. There will be new winners. There will be fallen angels and a small number of genuine turnarounds.

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Normalization Is Healthy

We are entering a different regulatory and economic environment. That creates an opportunity to fix long-standing issues: weak value accrual, poor disclosure, misaligned equity-token structures, and opaque incentives.

If crypto wants to become the industry it aspires to be, it must start acting like it.

I think in probabilities. My highest-confidence view is that most businesses adopt crypto over the next 15 years to remain competitive. When that happens, crypto exceeds $10 trillion in aggregate value. Stablecoins, tokenization, users, and on-chain activity will grow exponentially. At the same time, valuations will reset. Large incumbents will fall. Business models that never made sense will be exposed.

This is healthy. It is necessary.

Crypto should become invisible. The more a company makes crypto the product, the more fragile it becomes. The durable winners will bury it inside workflows, payments, and balance sheets. Users should not notice crypto itself but feel the impact of faster settlement, lower costs, and fewer intermediaries.

Crypto should be boring.

The era of airdrops, subsidized demand, broken incentive loops, and hyper-financialization is ending, as it always does when capital tightens.

My base case is simple: adoption accelerates, prices reset, valuations normalize. Crypto is a secular trend. That does not mean your token goes up.

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Who Actually Captures the Value?

Foundational technologies primarily benefit consumers through lower prices and better experiences. The second-order beneficiaries are companies that upgrade their operating systems to take advantage of cheaper, faster, more programmable infrastructure.

That framing leads to uncomfortable but necessary questions:

• Visa or Circle

• Stripe or Ethereum

• Robinhood or Coinbase

• A basket of Layer 1s or user aggregators

• A basket of Layer 1s or DeFi applications

• A basket of Layer 1s or DePIN applications

• DeFi applications or traditional financial stocks

• DePIN applications or infrastructure equities

This is not about absolutes. Multiple layers can win simultaneously. The question is relative value and relative outperformance. Who captures the surplus created by blockchains?

My bias is toward legacy and hybrid businesses that can lower costs and improve margins by plugging into open settlement rails. History suggests they often benefit more than the infrastructure providers themselves.

That said, every framework has a counterexample.

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What I Believe, and What I Don’t

I do believe that networks with real demand eventually monetize. The internet proved that. Facebook waited years before monetization mattered.

I do believe some Layer 1s will grow into their valuations. I also believe most will struggle to win users and justify their existence.

I do believe the gap between winners and losers will widen. Transparency will matter. Distribution, go-to-market, user relationships, and unit economics will matter far more than first-mover advantage.

Crypto’s persistent mistake has been overestimating early technical leadership and underestimating everything that comes after.

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Positioning for Reality

My outlook over the next several years is not particularly optimistic on prices. Adoption will continue. Prices may bleed further, potentially worsened by a broader equity mean reversion and a cooling AI hype cycle.

Patience is the edge.

• I am long crypto-as-a-service

• I am long crypto-enabled businesses

• I am short hyper-financialization

• I am short broken unit economics

• I am short inflated infrastructure built for demand curves that haven’t arrived

Capital preservation matters. Cash is underrated: not for returns, but for psychological immunity. It allows you to act when others cannot.

Markets have become faster and more impatient. Simply having a longer time horizon than most participants is now a material edge. Professional managers must rotate constantly to justify their existence. Retail investors increasingly chase momentum amid a growing affordability crisis. Institutions, once again, will declare crypto dead.

Quietly, more companies will adopt these systems. More balance sheets will plug into always-on financial rails.

One day, this period will look obvious in hindsight. The signals were everywhere. Conviction, however, only feels easy after prices rise.

Until then: wait for pain. Wait for forced sellers. Wait for believers to break. We are not there yet.

You don’t need to act. Prices move. Life goes on. Build something. Spend time with people you care about. Don’t let a portfolio become your identity.

Crypto will keep working, whether the market is paying attention or not.

Good luck out there.