#加密市场观察 The current status and future of the crypto market

This article is adapted from the Twitter author - SantiagoR Santos.
Crypto ETFs are now live; stablecoins have been integrated by mainstream companies; regulatory attitudes have become friendlier. Everything we wanted has arrived! So why isn't your coin rising?
Why did Bitcoin give back all its gains, while the US stock market rose 15-20% for the year?
The mainstream opinion has now shifted to "crypto is not a scam," so why is your favorite altcoin still underwater?

01 The gap between ideals and reality
Crypto Twitter has long held a deep-rooted assumption: "As long as institutions come in, regulations become clear, and JPMorgan or BlackRock issues a token... crypto will conquer everything, and we will go 'to the moon.'"
Everything we wanted has arrived - but it hasn't driven the price. Why?
Because the entire cryptocurrency market is mostly disconnected from reality. Bitcoin is a unique existence—perfect narrative: digital gold. Its market value is about 1.9 trillion dollars, while gold is about 29 trillion dollars. Less than 10% of gold's market value, there is still room for growth in the future. This is a well-understood combination of hedge + option value. But Ethereum + Ripple + Solana + everything else combined surprisingly has a market value of about 1.5 trillion dollars, making the narrative less stable.
Despite no one questioning the potential of this technology anymore, and few claiming it to be a scam, the real question is—does an industry with only 40 million active users really worth trillions of dollars? Meanwhile, OpenAI is rumored to have an IPO valuation close to $1 trillion, with a user base approximately 20 times that of the entire crypto industry. How much real value have these chains actually created? Can such a large amount of money be supported? In the past, the answer to making money was simple: invest in infrastructure. Early holders or participants in ETH, SOL, DeFi. But now, many projects' pricing assumes that there will definitely be 100 times the usage and 100 times the revenue in the future, and after the token issuance, they become ghost chains.
This forces us to ask the real question: what is the best way to invest in cryptocurrency right now?

02 Three Cruel Facts Under Threefold Benefits
This period has seen a triple resonance of favorable policies from regulators, the industry, and companies, but the market and prices reflect three facts:
1. The market doesn't care about your story; investment returns are based on fundamentals.
No matter how a chain claims to be the "Mother of All Chains" or the "World Computer", it ultimately comes down to: How much actual profit is made each year? Is this income derived from real economic activities?
2. Crypto is no longer the "only hotspot in the whole field"
Previously: The "high Beta gambling table" of global risk capital was in Crypto.
Now: AI has become the main character, while Crypto has taken a backseat. Liquidity is selective; AI is the main character, not crypto.
3. Enterprises follow business logic, not crypto narratives.
Companies only care about: compliance costs, integration costs, operating costs, stability.
Stripe's launch of Tempo is a warning: companies will not believe that ETH is a world supercomputer just because they listened to Bankless. They will choose the option that is most beneficial to them. If private chains and consortium chains are more useful, they may not come to L1 or L2 public chains. When the price is overestimated, all it takes is a cough from Powell for the entire narrative to collapse.
03 Valuation Misconception: Treating "Casino Turnover" as "Software Revenue"
Many people use the Web2 framework to value public chains: "Public chains have revenue, transaction fees, MEV, and Staking, somewhat like SaaS, right?"
This is actually a very dangerous analogy.
🔹Staking rewards ≠ corporate profits, but rather inflation, dilution, and security costs. The real "economic value" roughly comes from: transaction fees (Fee), tips (Tips), MEV (miner extractable value), which can barely be considered as the "gross revenue" of a public chain.
In this regard:
Ethereum: Approximately $2 billion in annual revenue, a market value of about $400 billion, and a PS of about 200–400x (and it's still cyclical revenue).
Solana: Annualized over $1 billion, market cap approximately $75-80 billion, about 20-60x PS.
Moreover, there is an even scarier fact: this is not "compound income". These revenues are not stable, enterprise-level regular income, but rather highly cyclical speculative flows. This is not SaaS income; this is Las Vegas.
When is the income the highest? — At the peak of a bull market, during the explosion of perpetual contracts, during the outbreak of Meme coins, leveraging, liquidation, everyone is rushing to escape, and robots are crazily arbitraging.
When does income nearly disappear? - During the bear market vacuum period, no one is trading, no one is minting, liquidations decrease, and on-chain activity is sluggish. This is not a long-term contract or predictable income, but rather a cyclical cash flow of "not opening for three years, then making enough for three years when it does open." You cannot apply Shopify's valuation multiples to a casino that only fills up once every 3-4 years.

04 Compare NVDA, see through the bubble of Crypto
In contrast to the "gods" of the tech world—Nvidia, which has a valuation of 40–45x earnings (not revenue). Nvidia has: real revenue, real profit, global enterprise demand, predictable contract sales, and non-gambling users. If the industry's fees cannot shift from speculation to real economic value, most valuations will need to be repriced.

05 The industry is still in its early stages, but not early enough for "everything you buy goes up".
Prices will eventually return to fundamentals, but we are not there yet. Currently: Most tokens have no reason to support huge valuations, value capture is limited, and income mainly relies on the cyclical speculation of casino products. We have built the world's fastest value transfer system... but use it to play slot machines. As Netflix co-founder Marc Randolph said, "Culture is not what you say, but what you do." Industry giants keep saying: we need to decentralize, yet the most important product in the crypto industry is a 10x leveraged perpetual contract for memecoins. Only when we do better can we move from a "over-financialized niche casino" to a real industry.

06 This is the "end of the beginning", not the end.
I don't think this is the end of crypto. But I think this is the "end of the beginning."
We have over-invested in infrastructure (over $100 billion) while severely underestimating the true application layer, products, and users.
Investors focus all their energy on: TPS, block space, fancy rollup structures. But users don’t care at all. Users only care about: cheaper, faster, simpler, and whether it can solve their problems.
Back to the first principles: Who are the users? What problems are we solving?

Where are the real investment opportunities?
I still believe that open and neutral infrastructure will drive global finance and businesses to adopt encryption technology because of economic advantages, not ideology. However, I do not think that the big winners of the next decade will be today's L1 or L2.
The history of technology tells us that winners are always at the user aggregation layer, not the infrastructure layer. The internet has made computing and storage cheaper, and those who really make money are: Amazon, Google, Apple.
Cryptography will also follow the rhythm: block space is a commodity, the diminishing marginal returns of infrastructure upgrades, users are always willing to pay for convenience, and user aggregators will capture the most value.
The real big opportunity is to embed crypto technology into already large enterprises, replacing outdated financial pipelines and improving real business efficiency. This is the trillion-dollar opportunity. The internet changed every industry because the economic calculations made sense. The same will happen with crypto.
The question is: should we wait another 10 years, or start now?

08 What should we do now?
·Blockchain technology is fine·Huge potential·
The industry is still in its early stages.
What needs to be done next is to re-examine:
·Evaluate projects based on real usage and "income quality" rather than ideology.
·Distinguish between "sustainable income" and "cyclical casino income"
The winner of the last cycle may not be the king of the next cycle.
·Stop treating token prices as a technical validation metric.
No one will choose AWS over Azure just because Amazon's stock price was stronger than Microsoft's one week. We can continue to wait for businesses to adopt it, or we can start promoting it now. Let's move real GDP onto the chain.
Job’s not finished.