Why BTC has given back all its rise while alts are deep underwater: the truth is coming to light.

Source: Retrospectively Obvious; Compiled by Golden Finance

Everyone in the crypto community is watching the same headlines:

• ETF has been launched
• Real economy enterprises are integrating stablecoins
• Regulatory agencies' attitudes are becoming increasingly friendly.

All that we once hoped for has now come true.

Why did the price drop?

Why has Bitcoin given back all its gains, while the US stock market has risen 15%–20% this year? Why, even though “cryptocurrency is no longer a scam” has become mainstream consensus, are your favorite altcoins still stuck underwater?

Let's have a good talk about this matter.

adoption ≠ price increase

There is a deeply ingrained assumption in the crypto Twitter community:

“Once institutions enter the market, once regulations become clear, once JPMorgan issues tokens… everything will be over, and we will take off.”

Now, institutions have arrived. Headlines have also been fulfilled. Yet we still remain in place.

There is only one core issue in investment:

Have these positive factors already been reflected in the price?

This has always been the hardest thing to judge. But market behavior is sending an unsettling signal:

We got everything we wanted - yet we couldn't push the price up.

Can the market fail? Of course it can.

What is the reason? Because the pricing of most crypto assets has long been seriously disconnected from reality.

1.5 trillion dollars……what is it really worth?

Zooming out to see the bigger picture:

• Bitcoin stands alone – it is the perfect symbol of consensus, much like gold. Its market value is about $1.9 trillion, while gold's market value is approximately $29 trillion. It is less than 10% of gold's market value. As a hedge tool and potential option value, its logic is clear.
• The total market capitalization of Ethereum, Ripple, Solana, and all other cryptocurrencies combined is about $1.5 trillion, but the narrative foundation behind them is much weaker.

Today, no one seriously doubts the potential of this technology. Very few still believe that it's all a scam. That stage has passed.

But potential cannot answer the real question:

Is an industry with only about 40 million active users really worth a valuation of trillions of dollars?

Meanwhile, there are rumors that OpenAI's IPO valuation will approach 1 trillion dollars, while its user base is about 20 times that of the entire cryptocurrency ecosystem.

Take a good look at this comparison.

Moments like this force us to face the real issues:

What is the best way to gain exposure to crypto assets from now on?

Looking back at history: the answer is infrastructure. Early Ethereum, early Solana, early decentralized finance (DeFi).

That wave of trading really worked.

But what about now? The pricing of most such assets seems to assume that the future usage rate and transaction fees will increase by 100 times. Perfect pricing, with no margin of safety.

The market is not foolish, it is just greedy.

This cycle has given us all the headlines we wanted… but a few truths have also come to light:

1. The market doesn't care about your narrative—it only cares about the gap between price and fundamentals.

If this gap persists for a long time, the market will eventually stop having illusions about you. Especially when you start disclosing revenue data.

2. Cryptocurrency is no longer the hottest trade. Artificial intelligence is.

Funds chase momentum. This is how modern markets operate. Right now, artificial intelligence is the absolute main character. Cryptocurrency is not.

3. Enterprises follow business logic, not ideology.

The launch of Tempo by Stripe is a warning signal. Perhaps companies will not choose to use public chain infrastructure just because they heard on Bankless that Ethereum is the “world computer”. They will go where it best serves their interests.

So, even if Larry Fink (CEO of BlackRock) finds that cryptocurrencies are not a scam, I'm not surprised that your holdings haven't skyrocketed.

When assets are perfectly priced, a careless remark from Powell or a subtle expression from Huang Renxun could destroy the entire investment logic.

Simple Calculation: Ethereum, Solana, and Why “Revenue” ≠ Profit

Let's roughly calculate the situation of mainstream Layer 1 public chains.

First is staking (Note: this is not profit):

Solana:

Approximately 419 million SOL staked × approximately 6% yield ≈ 25 million SOL per year

Calculated at approximately 140 USD each → Annual “rewards” of about 3.5 billion USD

Ethereum:

About 33.8 million ETH staked × approximately 4% yield ≈ 1.35 million ETH per year

Based on approximately $3100 per coin → Annual “rewards” of about $4.2 billion

Someone saw the staking data and said:

“Look, stakers can earn rewards! This is value capture!”

No. Staking rewards are not value capture.

They are token issuance and dilution, which are security costs rather than profits.

Real economic value = user transaction fees + tips + maximum extractable value (MEV). This is the closest metric to “revenue” for a blockchain.

From this perspective:

Ethereum generated approximately 2.7 billion dollars in transaction fees in 2024, ranking first among all public chains.

Solana has recently been leading in network revenue, earning hundreds of millions of dollars each quarter.

So, the current situation is as follows:

• Ethereum's market capitalization is approximately 400 billion USD, and the annual transaction fees + MEV “revenue” is about 1-2 billion USD. This corresponds to a price-to-sales (P/S) ratio of up to 200-400 times when calculated based on peak cyclical “casino-like revenue.”
• The market capitalization of Solana is approximately 75-80 billion USD, with an annual revenue exceeding 1 billion USD. In optimistic estimates, the price-to-sales ratio is about 20-60 times (note: do not use peak month data to estimate annualized figures).

These data are not precise. They don't need to be precise. We are not submitting documents to the SEC; we just want to see if the valuation is absurd enough to defy common sense.

And this hasn't touched the real issue:

The core issue is: this is not recurring revenue.

These are not stable, enterprise-level revenue streams.

They are highly cyclical, speculative flows of capital.

• Perpetual Contract
• Meme Coin
• Forced liquidation
• MEV Peak
• High-risk short-term trading

In a bull market, transaction fees and MEV surge. In a bear market, they disappear without a trace.

This is not recurring revenue from Software as a Service (SaaS). This is casino revenue in the style of Las Vegas.

You wouldn't assign a valuation multiple like Shopify to a business that only makes money when the casino is full every 3-4 years.

Different business natures should have different valuation multiples.

Return to “Fundamentals”

In any reasonable logical framework:

With a market capitalization of over $400 billion, Ethereum supports highly cyclical transaction fees of $1-2 billion, which cannot be considered a “value-type” investment target.

A price-to-sales ratio of 200-400 times, coupled with slowing growth and value diversion in the Layer 2 ecosystem. Ethereum is not like a federal government that can collect national taxes; instead, it resembles a federal government that can only receive state-level taxes while allowing the states (Layer 2) to capture the majority of the revenue.

We turned Ethereum into the meme of the “world computer,” but its cash flow performance does not match this valuation at all. Ethereum feels very much like Cisco to me: it was a leader in the early days, but its valuation is mismatched, and its historical peak may never be reached again.

In contrast, Solana's relative valuation is not as outrageous - it's not cheap, but it's not absurd either.

With a market cap of 75-80 billion USD, it generates billions in annualized revenue—optimistically estimating a price-to-sales ratio of about 20-40 times.

Still relatively high, still bubble-like. But compared to Ethereum, it's considered “relatively cheap.”

“Dear Limited Partners (LPs), we outperformed Ethereum - but the fund still lost 80%.”

It turns out that we treat the casino-like cash flow as recurring software revenue for pricing. Thank you for participating.

To help everyone understand this valuation multiple more intuitively:

Nvidia, the most sought-after growth stock in the world, has a price-to-earnings ratio (P/E) of only 40-45 times (note: this is the earnings multiple, not the revenue multiple) - and it possesses:

• Real Revenue
• Real Profit Margin
• Global enterprise-level demand
• Regular contract sales

and clients outside of crypto casinos (fun fact: crypto miners were the first wave of true high-speed growth for NVIDIA)

To reiterate: the revenue from these public chains in cryptocurrency is cyclical casino income, rather than stable and predictable cash flow.

In theory, the valuation multiples of these public chains should be lower than those of technology companies—not higher.

If the entire industry's transaction fees cannot shift from speculative short-term trading to real recurring economic value, the valuation of most assets will face reassessment.

We are still in the early stages… but not that kind of early.

One day, the price will realign with the fundamentals. But that time has not come yet.

Current situation:

• There are no fundamental reasons to support the extremely high valuations of most tokens.
• Once the token issuance and airdrop mining are stripped away, the value capture capability of many networks ceases to exist.
• Most “profits” are linked to speculative activities in casino-style products.

We have built an infrastructure that can transfer funds globally instantly, around the clock, and at low cost… yet we have designated the best use case as a slot machine.

Short-term greed, long-term laziness.

Quoting Netflix co-founder Marc Randolph: “Culture is not what you say it is, but what you actually do.”

Don't talk about decentralization while making the 10x leveraged “Fartcoin” perpetual contract your main product.

We can do better.

This is the only way for us to upgrade from a “hyper-financialized niche casino” to a real long-term industry.

The End of the Beginning

I don't believe this is the end of cryptocurrency. But I do believe this is the “end of the beginning.”

We have over-invested in infrastructure—over 100 billion dollars have been投入 into public chains, cross-chain bridges, Layer 2, and infrastructure projects—yet we have severely under-invested in application deployment, product development, and real user acquisition.

We always boast:

Transactions Per Second (TPS)

Block Space

Complex Rollup architecture

But users don't care about these at all. What they care about is:

Is it cheaper,

Is it faster,

Is it easier to use,

and whether it can really solve their problems.

Return to cash flow.

Return to unit economic benefits.

Returning to the essence: Who are the users? What problems are we solving?

Where is the true growth potential?

For over a decade, I have been extremely optimistic about cryptocurrencies. This has never changed.

I still believe:

Stablecoins will become the default payment channel.

Open and neutral infrastructure will support global finance behind the scenes.

Companies will adopt this technology because it aligns with economic logic rather than ideology.

But I don't think the biggest winners of the next decade will be the current Layer 1 or Layer 2 public chains.

Looking back at history, the winners of each technological cycle have emerged at the user aggregation layer, rather than the infrastructure layer.

The internet has reduced the costs of computing/storage. However, wealth has flowed to companies like Amazon, Google, and Apple—those that leverage inexpensive infrastructure services to serve billions of users.

Cryptocurrencies will also follow a similar logic:

• Block space will eventually become a commodity.
• The marginal benefits of infrastructure upgrades are increasingly diminishing.
• Users are always willing to pay for convenience.
• User aggregators will capture most of the value.

The biggest opportunity currently is to integrate this technology into established enterprises. To dismantle the financial pipelines of the pre-Internet era and replace them with cryptographic infrastructure in places where it can truly reduce costs and improve efficiency—just as the Internet quietly upgraded all industries from retail to industrial, simply because its economic benefits were too good to ignore.

Companies adopt the internet and software because it aligns with economic logic. Cryptocurrencies are no exception.

We can wait another ten years for everything to happen naturally.

Or, let's take action now.

Update Awareness

So, where should we go from here?

• The technology is feasible.
• The potential is huge.
• We are still in the early stages of real applications.

It's time to reassess everything:

• Assess network value based on real usage rates and fee quality, rather than ideology.
• Not all fees are the same: distinguish between recurring revenue and repetitive cash flow.
• The winners of the last decade will not dominate the next decade.
• Stop treating token prices as a scorecard for technical validity.

We are still at such an early stage that we naively believe that token prices can reflect whether the technology is viable. No one would choose AWS over Azure just because Amazon or Microsoft's stock rose that week.

We can wait another ten years for companies to actively adopt this technology. Or we can take action now.

Put the real Gross Domestic Product (GDP) on the blockchain.

The mission is not yet complete.

Inverse Thinking (Invert) (Note: “Invert” originates from Charlie Munger's concept of inverse thinking, which emphasizes finding clearer answers by thinking about problems in reverse. Here, it serves to elevate the main theme of the text, stressing the importance of stepping outside conventional frameworks to re-examine the value and direction of the cryptocurrency industry from a reverse perspective.)