Post-Crypto Era Outlook: Asset Valuation Normalization, What to Watch in the Next Decade?

Original article by Syncracy Capital Co-founder Ryan Watkins

Compiled by Odaily (@QinXiaofeng 888 )

Editor's Note: Syncracy Capital Co-founder Ryan Watkins recently published an article titled "The Twilight Zone: A Look Ahead at the Crypto Economy in 2026 and Beyond." He argues that crypto assets overextended expectations in 2021, and valuations have been steadily reverting to rationality ever since, with quality assets now fairly priced. The growth of the entire crypto economy is shifting from cyclical drivers to long-term secular trends, and beyond Bitcoin, the industry has spawned several application use cases with real value. "There is no force more powerful than an idea whose time has come, and the crypto economy has never seemed more unstoppable than it does now."

The following is the original article, compiled by Odaily. Enjoy~

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The crypto economy is in the midst of its greatest transformation since I entered this industry eight years ago.

Institutions are steadily accumulating digital assets, while early cypherpunk pioneers are diversifying their wealth and cashing out. Corporations are positioning for S-curve growth, while disillusioned native players are running on fumes. Governments are pushing the global financial system toward blockchain rails, while day traders fret over a few candlesticks on their charts. Emerging markets are celebrating financial democratization, while cynics born in America lament that it's all just a giant casino.

Recently, much has been written about which historical period the current crypto economy most resembles.

Optimists draw parallels to the post-dot-com-bubble recovery, arguing that the industry's speculative era is over and long-term winners akin to Google and Amazon will emerge and climb the S-curve. Pessimists, meanwhile, compare it to emerging markets, like China in the 2010s, suggesting that weak investor protections and a lack of patient, long-term, buy-and-hold capital could lead to poor asset price performance even as the industry thrives.

Both views have merit. After all, history is an investor's best guide aside from lived experience. Yet, analogies have their limits. We must also understand the crypto economy within its unique macroeconomic and technological context. Markets are not monolithic—they are composed of countless characters and stories, interwoven yet distinct.

Here is my best assessment of how we got here and where we're headed.

"The Red Queen's Race"

In British author Lewis Carroll's "Alice in Wonderland," the Red Queen tells Alice: "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!" Evolutionary biologist L. van Valen used this in 1973 to propose the "Red Queen hypothesis," aptly describing the fierce survival competition in nature: not advancing is retreating, and stagnation equals extinction.

In many ways, the only thing that matters in financial markets is expectations. Exceed them, prices rise; miss them, prices fall. Over time, as expectations swing like a pendulum, forward returns often correlate inversely with them.

In 2021, the crypto economy overextended expectations far more than most people realize. It was obvious in some ways—like DeFi blue chips trading at 500x price-to-sales ratios, or eight smart contract platforms each valued at over $100 billion. Not to mention the dizzying metaverse and NFT absurdities. But nothing illustrated the point more soberly than the Bitcoin-to-gold ratio chart.

Despite all our progress, Bitcoin's price relative to gold hasn't made new highs since 2021—in fact, it's down since then. Who would have thought that in "Crypto Capital" under Trump, after the most successful ETF launch in history, amid systematic dollar devaluation, Bitcoin as digital gold would perform worse than it did four years ago?

For other assets, it's far worse. Most projects entered this cycle saddled with structural issues, compounded by the challenge of addressing extreme expectations—a perfect storm:

• Most projects have highly cyclical revenue that presupposes continuously rising asset prices
• Regulatory uncertainty has hindered institutional and enterprise participation
• Dual ownership structures have created misaligned incentives between equity insiders and public market token investors
• Weak disclosure practices have created information asymmetry between project teams and communities
• A lack of common valuation frameworks has led to excessive volatility with no fundamental price floor

The intersection of these issues has caused most tokens to bleed persistently, with only a precious few sniffing anywhere near their 2021 highs. The psychological impact has been immense—few things in life are more discouraging than sustained effort yielding no returns.

For the speculators and opportunists who thought crypto assets were a shortcut to wealth, this disappointment runs especially deep. Over time, this struggle has bred widespread burnout across the industry.

This is, of course, a healthy development. Minimal effort should never have continued to yield extraordinary returns as it once did. The era before 2022, where immense fortunes could be amassed on the back of mere conceptual veneer, was clearly unsustainable.

That said, the silver lining is that these problems are now well understood, and prices reflect them. Today, aside from Bitcoin, few crypto-native players are willing to seriously entertain long-term fundamental narratives for any other asset. And after four years of煎熬, the asset class now possesses the necessary conditions to once again deliver upside surprises.

The Awakening Crypto Economy

As discussed in the previous section, the crypto economy entered this cycle with numerous structural issues. The good news is that everyone now recognizes this, and many of these issues are becoming relics of the past.

First, beyond digital gold, a number of use cases are demonstrating compounding growth, with more in transition. Over the past few years, the crypto economy has spawned:

• Peer-to-peer internet platforms that enable users to execute transactions and enforce contractual relationships without government or corporate intermediaries
• Digital dollars that can be stored and transferred anywhere in the world with internet access, providing cheap and reliable money to billions of people
• Permissionless exchanges that allow anyone, anywhere, to trade top global assets across any asset class 24/7 in a single, transparent venue
• Novel derivative instruments, such as event contracts and perpetual swaps, offering society valuable predictive insights and more efficient price discovery mechanisms, respectively
• Global collateral markets that grant users permissionless access to credit through transparent, automated infrastructure, significantly reducing counterparty risk
• Democratized asset creation platforms that allow any individual and institution to issue publicly tradable assets at minimal cost
• Open fundraising platforms that enable anyone in the world to raise capital for their ventures, breaking free from the constraints of local economies
• Physical infrastructure networks that build more scalable and resilient infrastructure by crowdfunding capital and distributing operations across independent operators

This is not an exhaustive list of all the valuable use cases the industry has built to date. The key point is that many of these use cases are demonstrating real value and continuing to grow regardless of crypto asset price fluctuations.

Meanwhile, as regulatory pressure eases and founders realize the costs of misaligned incentives, the dual equity-and-token models are being corrected. Many existing projects are consolidating assets and revenue into a single token, while others are clearly delineating: on-chain revenue belongs to token holders, off-chain revenue belongs to equity holders. Additionally, as third-party data providers mature, disclosure practices are improving, reducing information asymmetry and enabling more reliable analysis.

In parallel, a consensus is forming around a time-tested simple principle: 99.9% of assets need to generate cash flow, with only store-of-value assets like BTC and ETH being the rare exceptions. As more fundamentals-driven investors enter the asset class, these frameworks will only strengthen, and rationality will gradually increase.

In fact, given enough time, self-sovereign ownership of on-chain cash flows may come to be understood as a unlock of the same magnitude as self-sovereign digital store of value. Ask yourself: has there ever been a time in history when you could hold a digital bearer asset that autonomously pays you whenever a program is invoked anywhere in the world?

In this context, winning blockchains are becoming the monetary and financial base layer of the internet. Day by day, the network effects of Ethereum, Solana, and Hyperliquid are deepening through their ever-expanding ecosystems of assets, applications, enterprises, and users. Their permissionless design and global distribution place their applications among the fastest-growing enterprises in the world, with unparalleled capital efficiency and revenue velocity. In the long run, these platforms are likely to underpin the total addressable market of the "super apps" that nearly every leading fintech company aspires to capture a share of.

In this context, incumbent giants on Wall Street and in Silicon Valley are unsurprisingly accelerating their blockchain-related initiatives at full speed. Not a week goes by without a new wave of product launches, from tokenization to stablecoins. Notably, unlike previous eras of the crypto economy, these efforts are no longer experiments. They are production-grade products, mostly built on public blockchains rather than isolated, closed private systems.

As the lagged effects of regulatory changes continue to permeate the system over the coming quarters, this activity will only accelerate. With clearer rules, corporations and institutions can finally shift their focus from "Is this legal?" to how blockchain can expand revenue opportunities, reduce costs, and unlock new business models.

Perhaps one of the most telling signs of the current situation is that few analysts in the industry are modeling for exponential growth. From what I can sense, many of my peers on both the sell-side and buy-side are reluctant to even assume growth rates above 20% annually, for fear of appearing overly optimistic.

With valuations reset after four years of pain, it's crucial at this moment to ask ourselves: What if this truly heads toward exponential growth? What if daring to dream once again ultimately pays off?

The Twilight Zone

"Light a candle, and a shadow will be cast." — Ursula LeGuin.

On a cool autumn day in 2018, before another exhausting day at an investment bank, I stopped by an old professor's office to talk about everything related to blockchain. After I sat down, he recounted a conversation he'd had with a skeptical equity hedge fund manager who proclaimed crypto assets were entering a nuclear winter—"a solution still searching for a problem to solve."

After giving me a quick lesson on unsustainable sovereign debt burdens and the erosion of institutional trust, he finally told me what he'd said to that skeptic: "In ten years, the world will be grateful we built this parallel system."

It's been less than ten years since then, but with crypto assets increasingly looking like an idea whose time has come every day, his prophecy seems prescient.

In that same spirit—and this is the entire thesis of this article—I aim to illustrate that the world is still underestimating what is being built here. And for all of us investors, what matters most practically is that multi-year opportunities in top projects are now mispriced to the downside.

This last point is crucial, because while the arrival of the crypto world may be unstoppable, your favorite coin might genuinely go to zero. The flip side of crypto's unstoppable rise is that it's attracting more intense competition, and the pressure to deliver on promises has never been greater. As the institutional and corporate giants I mentioned earlier enter the fray, they will likely wash out many of the weaker players. This isn't to say they will win outright and co-opt the technology. But it does mean that only a handful of native players will emerge as the big winners around which the world re-anchors its order.

This isn't meant to induce cynicism. In all emerging technology sectors, 90% of startups fail. The fact that more failures may become public in the coming years shouldn't distract you from the bigger picture.

Perhaps no single technology is more aligned with the zeitgeist of our times than crypto assets. The decline of trust in institutions across developed societies, unsustainable government spending in G7 nations, blatant currency debasement by the world's largest fiat issuer, deglobalization and the fragmentation of the international order, and a growing desire for a new system fairer than the old—all of these are tailwinds. As software continues to eat the world, driven by AI as the latest accelerant, and as younger generations inherit wealth from aging baby boomers, this is the perfect moment for the crypto economy to emerge from its own small bubble.

Many analysts frame the present through classic frameworks, such as the Gartner Hype Cycle and Carlota Perez's "post-frenzy" phase, suggesting the best return period is over, followed by a more mundane utility phase. However, the truth is far more interesting.

The crypto economy is not a monolithic market neatly marching toward maturity, but a collection of products and enterprises at different points on their own adoption curves, each evolving independently. Perhaps more importantly, when a technology enters its growth phase, speculation doesn't disappear; it merely ebbs and flows with shifts in sentiment and the rhythm of innovation. Anyone telling you the speculative era is over is probably just disillusioned or ignorant of history.

Maintaining skepticism is reasonable, but don't succumb to cynicism. We are reimagining money, finance, and how our most important economic institutions are governed. This should be as fascinating and exciting as it is challenging.

Going forward, your task is to figure out how to best capitalize on this emerging reality, rather than endlessly arguing on X threads about why everything is doomed.

Because behind the fog of disillusionment and uncertainty lies a once-in-a-generation opportunity for those willing to bet on the dawn of a new era, rather than mourn the sunset of the old one.