Opinion: Retail investors can’t buy value, and there won’t be another altcoin cycle

Original Source: 51 Insights | Marc Baumann

Original Translation: TechFlow

Editor's Note: For fifteen years, the way to bet on crypto infrastructure was to buy tokens – that was the core promise of the Fat Protocol Thesis: protocols capture value, and tokens are your share. But Marc Baumann argues in this in-depth analysis that this trade is dead. In June, Solana recorded an all-time high in tokenized stock trading volume, handling 96% of on-chain stock trades, yet SOL still fell to $77, down 73% from its peak. Robinhood's chain processed $568 million in daily trading volume within two weeks, with Ethereum earning only $1,538 in settlement fees from it. Value creation has shifted from the token layer to the equity layer – Stripe acquired Bridge, Mastercard acquired BVNK, Kraken acquired Backed Finance, every value event happened on equity, not tokens. More brutally: a vast number of token projects from the past decade would never have been able to raise funds in traditional markets – the problem tokens solved was allowing early investors to exit without the company creating value.

For fifteen years, the way to bet on crypto infrastructure was to buy tokens.

This is the foundational financial promise of the industry, formally articulated in 2016 as the Fat Protocol Thesis: applications will be commoditized, protocols will capture value, and tokens are your share in the protocol. The network wins, you win.

This trade is dead. Today, I'll tell you why.

June: The Moment the Promise Should Have Been Fulfilled

In June, tokenized stocks traded a record $3.86 billion on-chain, up 145% month-over-month.

The catalyst was SpaceX's Nasdaq listing on June 12, a $7.5 billion raise, with tokenized SpaceX stock launching on Solana the same day. Tokenized SPCX alone traded $1.19 billion, accounting for roughly 31% of all tokenized stock trading volume that month. Solana handled about 96% of the volume. On June 23, tokenized assets surpassed meme coins for the first time in Solana's daily spot trading volume share. Active addresses retested yearly highs, throughput neared all-time records.

And SOL's price was around $77. Down half over the past year, 73% below its peak, hitting its lowest level since December 2023 in mid-June.

Figure: Solana price chart. Source: Google

The most used network in the fastest-growing category in crypto is being priced as a declining network.

The mainstream explanation is macro factors: bear market, ETF outflows, patient waiting.

My reading is different. What breaks this cycle is the value link itself. Value creation has left the token layer and moved to the equity layer – the companies building the infrastructure. And these companies don't have tokens. Look at where capital is actually flowing:

• Stripe acquired Bridge for $1.1 billion in February 2025
• Mastercard signed an agreement in March to acquire BVNK for up to $1.8 billion (Coinbase previously came close to acquiring it for roughly $2 billion, but the deal fell apart in November)
• Kraken agreed to acquire Backed Finance (the issuer of xStocks) in December 2025, preparing for its 2026 IPO
• Securitize is listing its common stock on the NYSE and tokenizing it on Solana on its first trading day

None of these value events happened on tokens. Every single one happened on equity.

The Reason is Simple: Equity is an Enforceable Claim on Cash Flows

The reason is mundane but legal: equity is an enforceable claim on cash flows. Most tokens are not.

When $3.86 billion in tokenized stocks traded on Solana, the network earned fractions of a cent per transaction, because near-zero fees are the product itself. Minting and redemption spreads, custody fees, market-making profits – all flow to the income statements of issuers, brokers, and exchanges. Tokens got the headlines, companies got the revenue.

Ethereum Anatomy: $1,538 vs $816,000

Robinhood launched its own chain on July 1 – an Ethereum Layer 2 built on the Arbitrum tech stack, offering tokenized stocks to customers in over 120 countries. Within a week of launch, it was processing $568 million in daily trading volume. Then ARK Invest's Lorenzo Valente released a revenue breakdown: of the roughly $816,000 in total revenue the chain has generated since launch, Robinhood retains about 89%, Arbitrum takes 10%, and Ethereum has earned just $1,538 for settlement.

Fifteen hundred dollars, or 0.15%, for securing the entire system.

The Fat Protocol Thesis says the base layer captures value. Here, the base layer captures $1,538.

And the financial instrument that captures Robinhood's chain success does exist – it trades as HOOD on the Nasdaq. There is no Robinhood chain token, and nobody misses one.

The internet has already run this experiment. TCP/IP, HTTP, and SMTP created more value than any technology in history, yet captured none of it. Value flowed to what was built on top: Google, Amazon, Netflix, Airbnb. In the late 1990s, carriers laid over 80 million miles of fiber to own the internet's growth, and the era's loudest prophet, George Gilder, promised "no losers" in a trillion-dollar market. Within a year, two carriers he promoted went bankrupt. Over $500 billion evaporated, 216 telecom companies collapsed, and 85% of the fiber was still dark in 2005. That dark fiber later made bandwidth cheap enough for YouTube to exist. The pipes created value; the companies on top captured it. Crypto's Layer 1s are replaying the telecom trade.

The Harsher Truth: The Structural Problem of Token Financing

A vast number of token projects from the past decade couldn't raise funds in traditional markets: no revenue, no enforceable claim on future revenue, no credible plan to generate either.

In equity markets, such companies wouldn't get funded. In crypto, they got funded at scale, because tokens solved a problem securities never could: they allowed early investors to exit without the company creating value.

Binance Research documented this in 2024. At token launch, only 13% of the supply was in circulation, with roughly $155 billion in locked supply scheduled to flood the market between 2024 and 2030. VCs bought at private prices, sold on unregulated secondary markets after a one-year cliff, not the 7-10 year wait equity requires. The counterparty? Retail. Even VCs admit it: Dragonfly's Haseeb Qureshi described price discovery at these launches as occurring in private markets that are "manipulated, delusional, or both."

None of this requires fraud. That's the worst part. The structure is disclosed, legal, and it pays people not to build.

Celestia and Polkadot: Fundamentals Improve, Prices Hit New Lows

Celestia (TIA) launched with an 8% annual inflation rate, peaking near $20.85 in February 2024. Then, on October 30, 2024, a cliff unlock released 176 million tokens, nearly doubling the circulating supply. Early backers sold OTC, buyers hedged with perpetuals, and roughly 409 million tokens will continue unlocking into early 2027. The token currently trades below $0.40, down about 98% from its peak. And for the usage these emissions were supposed to be tied to: in a recent 24-hour period, the entire network recorded just $89 in fees. Not $89 million. Eighty-nine dollars, with a market cap near $370 million.

Celestia is not an exception, it's a pattern. Polkadot was a top-5 asset in 2021, valued at over $50 billion, with the same pitch every cycle: one more upgrade. On June 28, it hit an all-time low of $0.7993, six years after launch. DOT currently trades below $0.90, down about 98% from its peak, even below its 2020 launch price. And this happened after the project did everything holders asked: setting a hard cap of 2.1 billion DOT in March, slashing issuance by more than half, securing a Nasdaq-listed spot ETF the same month, and still ranking high in developer activity. Fundamentals improved. Prices still hit new lows, because prices were never tied to fundamentals from the start.

Solana is the strongest counter-example, which is precisely why June is so instructive. SOL has real fee capture, real staking economics, the deepest usage in the industry, yet it still decoupled. If the best token can't translate record usage into price, weaker tokens have no argument at all.

The Asymmetric Reality: Public Investors Can't Buy the Value Layer

This leaves an uncomfortable asymmetry:

The layer public investors can buy does not capture value. The layer that captures value, most public investors cannot buy, because it resides in private companies being absorbed by Stripe, Mastercard, and Kraken, before the prospectus is even printed.

...Unless they IPO, right? Crypto companies raised $3.4 billion through IPOs in 2025, with a pipeline forming for 2026. Then public market scrutiny swept over them too: Gemini is down 89% from its opening price, BitGo down 77%, Bullish down 71%. And companies with sustained, usage-linked revenue held up: Circle still trades at roughly 110% of its offering price, Figure at about 24% above. Equity is not magic packaging – it's a claim on cash flows, and where cash flows are real, this claim held up even in the worst crypto market.

What the Bear Market is Really Doing: A Full Audit

This is what this bear market is truly doing. A downturn is an audit. It separates "a claim on something" from "a claim on attention," and it respects no asset class boundaries: it has repriced exchange stocks tied to volume leverage almost as brutally. A decade of crypto capital formation is being marked to market, and the mark lands precisely where there's a legal claim on real cash flow.

Potential Counterarguments

Tokens are programmable claims, and claims can be rewritten. Fee switches, buybacks, and revenue distribution could recouple usage and price; Solana's Alpenglow upgrade combined with a real regulatory framework might do exactly that. Dragonfly's Haseeb Qureshi also points out that 13% circulating supply at launch was normal in the last cycle too, so the structure isn't new; what may be new is that marginal buyers have stopped showing up. And this could just be Beta. Tokenized RWAs are up 40% year-to-date, while the broader crypto market is down about 20%, so the divergence might compress when macro turns. My bet is it won't compress much, because the divergence is contractual, not cyclical.

The Fat Protocol Thesis said value would accrue at the protocol layer, with tokens as your share. This cycle shows: value accrues to entities holding legal claims, and those legal claims were never in tokens – they were always on the cap table.