Give up illusions and prepare for the most torturous moments in the crypto market

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Author: Santiago Roel Santos

Translation: Tim, PANews

Price and Adoption Paradox

Crypto adoption will continue, but market prices may remain stagnant for a long time.

This contradiction between accelerating real-world adoption and lagging market prices is not a flaw but a necessary feature of the current stage of crypto market evolution.

If you view the crypto market from a ten-year perspective, its prospects are highly attractive. However, maintaining this long-term view is psychologically challenging. You should be prepared for: adoption rates expanding while prices stagnate or slowly decline; also, be ready to witness others profiting in other sectors (artificial intelligence, stocks, or the next hot trend), while crypto seems to be forgotten.

This feeling can seem unfair, and the process may be painful. But price lag is inevitable. Fundamentally, many crypto assets no longer deserve their previous valuations.

The market is indifferent to actual adoption until prices collapse and it re-engages.

Application Adoption Fuels Bubble

In the early stages of application adoption, bubbles may form. This is a painful phase of value discovery: when real usage demand cannot support inflated valuations, the market will recalibrate, which is a necessary step for long-term healthy development.

When crypto infrastructure reaches scale, it becomes clear that external funding far exceeds actual demand. The proliferation of applications will test business models rather than validate value. Some projects will fade away in silence; others will survive but at valuations far below their peak visions.

Cryptocurrencies are gradually fading from the spotlight, becoming background players. From exciting to mundane, this is the inevitable path from chaos to maturity.

This is a good thing.

This scenario is not new. During the dot-com bubble burst, the Nasdaq plunged about 78%, while internet users tripled, and broadband infrastructure was fully deployed. It took years for the market to recover, and now the internet has quietly reshaped the world. While investors still lick their wounds, software has “consumed” the entire world.

Infrastructure technology does not reward those who seek quick gains.

When infrastructure wins, who will be the real winners?

Market stage transitions can be uncomfortable. Builders who have dedicated years to open-source projects will see others copy their work and capture most of the economic benefits; early investors in infrastructure-focused crypto VCs will see traditional VCs gain more value; retail investors buying tokens instead of equity may feel marginalized—companies benefit from the ecosystem but do not return corresponding value to token holders.

Some issues are structural; others are self-inflicted dilemmas.

The market is self-correcting. Open networks will develop rapidly, incentives will change, value capture mechanisms will improve, but not all models will survive to benefit.

Crypto adoption is quietly progressing, but the market has yet to truly recognize it. It may take years for the market to re-establish value correlations, recognizing crypto as a core operating system rather than just speculative assets.

Price Cycles vs. Application Cycles

Price cycles are driven by market psychology and liquidity.

Application cycles are driven by utility value and infrastructure.

Both are related but not synchronized. Historically, prices often lead applications, common in early technological revolutions. Today, applications are beginning to dominate, while prices lag behind.

Currently, marginal buyers of crypto assets are elsewhere—they are chasing the AI wave. This phenomenon may persist or reverse, beyond our control.

What we can see is a world without stablecoins, transparent funding channels, or 24/7 global real-time settlement—becoming increasingly unimaginable.

The deepest lesson from cycles is: we must accept that the time lag between application and price may far exceed expectations. And if you want sustained compound growth, you need to stay rational even when patience wears thin.

This is not a rallying cry to HODL.

Many crypto projects will never turn around. Some have fundamental flaws from the start; some lack moats; others have been completely abandoned. New winners will emerge, stars will fall, and a few true dark horses will rise.

Pullbacks are healthy

We are entering a different regulatory and economic environment. This creates opportunities to address long-standing issues: weak product revenue, insufficient asset disclosures, mismatched equity and token structures, and opaque team incentives.

If the crypto industry truly wants to become what it aspires to be, it must first present itself properly.

I believe anything is possible. My most confident view is that within the next 15 years, most companies will adopt crypto technology to stay competitive. By then, the total market cap of cryptocurrencies will surpass ten trillion dollars. Stablecoins, tokenization, user scale, and on-chain activity will grow exponentially. Meanwhile, valuation standards will be redefined, existing giants may decline, and unreasonable business models will be eliminated.

This is healthy and necessary.

Cryptocurrencies will eventually become intangible. The more a company centers its business around crypto, the more fragile its business model often becomes. True long-term winners will embed crypto deeply into their workflows, payment systems, and balance sheets. Users should not notice the presence of crypto technology but should feel its benefits—faster settlements, lower costs, and fewer intermediaries.

Crypto should be pure and “boring.”

When capital tightens, airdrops, demand driven by subsidies, unreasonable incentives, and excessive financialization will come to an end—this is just another inevitable cycle in history.

My basic judgment is simple: crypto applications will accelerate adoption, prices will readjust, and valuations will become rational again. Crypto is a long-term trend, but that does not guarantee your tokens will necessarily increase in value.

Who truly captures the value of crypto technology?

Core technology benefits consumers mainly by lowering prices and improving experience. Secondary beneficiaries are companies upgrading their systems to leverage cheaper, faster, and more programmable infrastructure.

This framework raises some uncomfortable but necessary questions:

Visa or Circle?

Stripe or Ethereum?

Robinhood or Coinbase?

A basket of Layer 1 protocols or user aggregators?

A basket of Layer 1 protocols or DeFi?

A basket of Layer 1 protocols or DePIN?

DeFi or traditional financial stocks?

DePIN or infrastructure stocks?

It’s not necessarily an either/or choice; diversification strategies are also viable. The question is about relative value and performance—who will capture the residual value created by blockchain?

I lean toward those traditional and hybrid companies that connect to open settlement channels to reduce costs and increase margins. History shows they often benefit more than infrastructure itself.

But it’s important to emphasize that every framework has exceptions.

What I believe in, and what I don’t

I do believe that networks with real demand will eventually monetize, as the internet has proven. Facebook took years to monetize before becoming a giant.

I am confident that the value of some Layer 1s will be validated as they develop, eventually matching their valuations. But I also believe most will struggle to attract users and find enough value to support their valuations.

I believe the gap between winners and losers will widen further. Distribution, market entry strategies, user relationships, and unit economics will matter far more than first-mover advantage.

A common misconception in crypto is overestimating early technological advantages and underestimating the other factors needed for subsequent development.

Back to Reality

My outlook for the next few years is not particularly optimistic. Adoption will continue to rise, but prices may further decline—possibly exacerbated by broader mean reversion in stocks and a cooling AI hype cycle.

But patience is a major advantage.

I am bullish on crypto-as-a-service models.

I am bullish on crypto-enabled companies.

I am bearish on excessive financialization.

I am bearish on failed unit economics.

I am bearish on overbuilding infrastructure.

Protecting capital becomes crucial. The value of cash is underestimated—not for its yield, but for the psychological immunity it provides. It allows you to act decisively when others cannot.

The market has entered an era of rapid pace and growing impatience. Today, having a longer-term perspective than most participants is a real advantage. Professional managers must frequently rebalance to prove their worth. Facing increasing life pressures, retail investors chase short-term hot spots. Institutional investors will also once again declare that crypto is dead.

Gradually, more traditional companies will adopt crypto technology, and more balance sheets will connect to blockchain.

One day, when we look back, everything will seem so clear. Signals are everywhere; only firm conviction makes it seem effortless—often only after prices rise.

Until then: endure the pain.

Wait for sellers to capitulate, wait for faith to collapse—but we are not there yet.

No need to rush. Markets will continue to fluctuate, life goes on, spend more time with those you care about. Don’t let your portfolio become your entire life.

The crypto world will operate silently, whether the market is in the shadows or shining brightly.

Good luck to all.