Despite years of anticipation and continuous positive news, why does the coin’s price keep falling?

Original Article Title: Why Your Coin Isn't Pumping
Original Author: Santiago R Santos, Founder of Inversion
Original Translation: Azuma, Oglobo Planet Daily

This cycle, people paying attention to cryptocurrency always see news headlines like these:

· Some ETF Has Launched

· Some Major Company is Integrating a Stablecoin

· Regulation is Becoming More Friendly

No doubt, these are all developments we used to want to see, but why is the market looking like a dumpster fire?

Why did the U.S. stock market rise 15–20% this year, while Bitcoin just went on a rollercoaster ride of "to the moon and back down"? Why is your favorite shitcoin always digging itself deeper into a hole, even when the mainstream no longer sees the cryptocurrency industry as a scam?

Let's talk about the reasons.

Adoption ≠ Price Increase

There's a deep-rooted assumption in Crypto Twitter: "As long as institutions come, regulations clarify, and giants are willing to issue coins... all problems will be solved, and the price will go to the moon."

Well, they did come, you surely saw it in the news, but you also saw where we are now...

In the investment field, there's only one real question—has the market already priced in the good news in advance?

This is always the hardest thing to judge, but market behavior is telling us a hard-to-accept fact: everything we wanted has been achieved, but the price hasn't risen.

Is the market highly inefficient? Certainly! Why is this? Because the pricing of most crypto assets is severely disconnected from reality.

A $1.5 Trillion Shitcoin Market Cap... What Does That Even Represent?

Let's zoom out a bit.

Bitcoin is a completely standalone asset class—a perfect narrative, just like gold. Bitcoin's market cap is around $1.9 trillion, while gold is around $29 trillion, with the former accounting for less than 10% of the latter's market cap, giving it a clear logic of "hedge + option" value.

With Ethereum, Ripple, Solana, and all other altcoins combined, their market capitalization is about $1.5 trillion, but their narrative foundation is much more fragile.

There are not many people now who would deny the potential of blockchain technology, and almost no one is saying that the entire industry is a scam; that phase has indeed passed.

But "potential" cannot answer the real-world question — can this industry with only around 40 million active users really be worth trillions of dollars?

At the same time, rumors suggest that OpenAI is set to IPO at nearly $1 trillion valuation, with its user base reportedly being 20 times that of the entire cryptocurrency ecosystem. You can ponder on that comparison.

At this moment, we must ask ourselves a real question: from now on, what is the best way to gain exposure to cryptocurrency?

Historically, the answer has been infrastructure, such as early ETH, early SOL, or early DeFi tokens. This strategy was effective at the time.

But what about today? Today, the pricing of most such assets is as if we have already assumed a 100x increase in usage and a 100x increase in fee revenue. The pricing is near perfect, but with no margin of safety.

The Market Is Not Stupid, Just Greedy

Within this cycle, the headlines we anticipated have become a reality... but a few facts have become clear:

• The market doesn't care about your story; it cares about the gap between price and fundamentals.

• If this gap persists long term, the market will eventually no longer give you the benefit of the doubt. Especially after you start truly demonstrating revenue.

• Cryptocurrency is no longer the hottest trade; AI is.

• Capital will always chase momentum; that's how the modern market operates.

• Right now, AI is the protagonist, not cryptocurrency.

• Companies follow business logic, not ideology.

• Stripe Launches Tempo as a Wake-Up Call. Companies will not simply use public infrastructure because they heard about Ethereum being the world's computer on Bankless; they will go where it best serves their needs.

So, I'm not surprised at all that despite Larry Fink (BlackRock CEO) getting in, your token hasn't pumped.

When asset pricing is perfect, a small move from Powell (Fed Chair) or a strange look from Huang Renxun (NVIDIA CEO) is enough to destroy the entire investment thesis.

Quick Math on ETH and SOL: Why Revenue Isn't Profit?

Let's do some rough calculations on mainstream Layer1.

First, let's look at staking—note this is not profit:

• Solana: Staking size is about 419 million SOL, with an annualized rate of about 6%, corresponding to about 25 million SOL in staking rewards per year, estimated at $140, valued at about $3.5 billion;

• Ethereum: Staking size is about 33.8 million ETH, with an annualized rate of about 4%, corresponding to about 1.35 million ETH in staking rewards per year, estimated at $3,100, valued at about $4.2 billion;

Some may point to staking rewards and say, "Look, stakers get rewards! That's value capture!"

Wrong. Staking rewards are not value capture; they are inflation, dilution, and security costs, not profits.

The true economic value comes from user fees + tips + MEV paid, which is the part of a blockchain closest to "revenue".

In this regard, Ethereum generated about $2.7 billion in transaction fees in 2024, leading all public chains; Solana, on the other hand, has recently been leading in network revenue, earning hundreds of millions of dollars per quarter.

So, let's make a rough estimate of the current situation:

• Ethereum's market cap is about $400 billion, and it can generate approximately $10 - 20 billion in "revenue" through fees + MEV per year. This is equivalent to a market to sales ratio of 200 - 400 times based on the "casino-style revenue" during market frenzy;

• When Solana's market capitalization is around $750-800 billion, its annual revenue exceeds $10 billion. Based on your broad estimate of annual revenue (without selecting peak months and extrapolating for the whole year), its Price-to-Sales ratio is approximately 20-60x.

These are not precise figures, and precision is not necessary. We are not submitting documents to the SEC; we just want to see if the same standards are applied when valuing assets of this nature.

This has not yet touched on the real issue. The most critical issue is that this revenue is not sustainable recurring revenue—it is not stable, enterprise-grade long-term revenue; it comes from highly cyclical, speculative, volatile, and unstable trading activities:

• Perpetual contracts;
• Meme tokens;
• Liquidations;
• MEV spikes;
• Various kinds of "on-chain casino-style" high-frequency speculation;

In a bull market, network fees and MEV revenue soar; but in a bear market, they vanish without a trace.

This is not SaaS "recurring revenue"; this is more like a Las Vegas casino. You wouldn't assign Shopify-like valuation multiples to a business that can only make money when the casino is packed every 3-4 years.

Different businesses should have different valuation multiples.

Returning to "Fundamentals"

In any logically consistent universe, it is difficult to explain: How Ethereum, with a market capitalization of over $400 billion, corresponds to possibly only $10 - 20 billion in highly cyclical fee revenue, can be considered a "value" investment?

That implies a Price-to-Sales ratio of 200 - 400x, even as growth slows and value is continuously siphoned off by Layer 2. Ethereum's role is akin to some kind of strange federal government that can only collect "state-level taxes," while the states (Layer 2) keep most of the value-added revenue for themselves.

We have hyped up Ethereum as the "world computer," but its cash flow situation does not at all match its price. Ethereum feels to me a lot like Cisco back in the day—early leader, wrong valuation multiples, and a historical high that may never be reached again.

On the other hand, Solana seems relatively less crazy by comparison — not cheap, but not absurd either. At a market cap level of $750 - 800 billion, it could achieve annual revenues in the billions — being generous, at a price-to-sales ratio of around 20-40x. This is still high, there is still a bubble, but it's "relatively cheap" compared to ETH.

To put these valuation multiples into perspective, let's look at NVIDIA, the most popular growth stock on Earth, which has a price-to-earnings ratio of roughly 40-45x (note that this is not a price-to-sales ratio), and it also has:

• Real revenue;
• Real profit margins;
• Global enterprise demand;
• Sustainable, contractually guaranteed revenue;
• And customers outside of the crypto casino (worth mentioning: cryptocurrency miners were NVIDIA's first truly high-growth vector).

Emphasizing again, the revenue streams of these blockchains are of a cyclical "casino-like income" nature, rather than stable, predictable cash flows. Strictly speaking, these blockchains should trade at a discount, not at a premium to tech companies.

If the industry's revenue cannot transition from speculative trading to real, recurring economic value, most valuations will be repriced.

We're Still Early… But Not THAT Early

One day, prices will revert back to fundamentals, but not now.

Currently, there are no fundamental reasons for most tokens to command high valuation multiples. Many networks have no real value capture once subsidies and airdrop incentives are removed. Most of the "profitability" is tied to speculative activities in the casino-like products. We've built rails that can transfer value globally 24/7 at low cost... only to deem their best use case as a slot machine.

This is short-term greed, long-term laziness.

Quoting Netflix co-founder Mark Randolph: "Culture is not what you say, but what you do." When your flagship product is a 10x leveraged perpetual contract on Fartcoin, don't preach decentralization to me.

We can do better. That is the only way to upgrade from an overfinancialized niche casino to a truly long-term industry.

The End of the Beginning

I don't think this is the end of the road for the crypto industry, but I believe this is the end of the "beginning."

We have over-indexed on infrastructure—pouring over a hundred billion dollars into blockchain, cross-chain bridges, Layer2, various infrastructure—but severely under-indexed on actual deployment, products, and users.

We keep boasting about:

• TPS;
• Block space;
• The rollup architecture of Layer 2;

But users don't care about these, they care about:

• Whether it's cheaper;
• Whether it's faster;
• Whether it's more convenient;
• And whether it actually solves their problem;

It's time to get back to cash flow, back to unit economics, back to the most fundamental question—who is the user? What are we solving?

Where is the real upside?

I have been bullish on cryptocurrency for the ultra long term for over a decade, and that hasn't changed.

I still believe:

• Stablecoins will become the default payment rail;

• Open, neutral infrastructure will power global finance behind the scenes;

• Companies will adopt this tech for economic, not ideological reasons;

But I don't think the biggest winner of the next decade will be today's Layer1 or Layer2.

Historically, the winner of every tech cycle has come at the user aggregation layer, not the infrastructure layer. The internet made compute/storage cheap and wealth flowed to Amazon, Google, Apple—those that leveraged cheap infrastructure to serve billions.

Crypto will be no different:

• Block space is a commodity;

• Marginal utility of infra upgrades diminishes;

• Users always pay for convenience;

• Those who can aggregate users will capture most of the value;

The biggest opportunity now is to infuse this tech into already-scaled enterprises. Dismantle the outdated financial systems pre-dating the internet era, replacing them with crypto systems, provided these new systems actually reduce costs and increase efficiency—much like the internet quietly upgraded everything from retail to industrial thanks to its undeniable economic efficiency.

People adopted the internet and software because it made economic sense, and crypto will be no different.

We could wait another decade for it to happen. Or, we could take action now.

Update Awareness

So where do we stand now?

The technology is still viable, the potential is still enormous, real-world applications are still in their infancy, and now is the perfect time to reevaluate everything:

• Revalue the network based on real-world usage and fee quality, rather than ideology;

• Not all revenue is created equal: distinguish between truly "sustainable" revenue and "cyclical" speculative income;

• The winners of the last decade will not dominate the next decade; stop using token price as a scoreboard for technological validation;

We are still in the early stages, to the point where we still behave like cavemen, using token price to judge the effectiveness of the technology. No one chooses AWS or Azure because Amazon or Microsoft stock prices went up in a week.

We could wait another ten years for companies to adopt this technology, or we could start taking action now to bring real GDP onto the chain.

The work is not yet done; we need to learn to think backwards.

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