Bitcoin, Ethereum, and the Multi-Year Reset Nobody Saw Coming

Ryan Watkins, former Senior Research Analyst at Messari, believes the cryptocurrency market is undergoing its largest transition since he entered the industry eight years ago. In his latest post on X titled “The Twilight Zone: On the Cryptoeconomy in 2026 & Beyond,” Watkins said crypto valuations pulled forward unrealistic expectations during the 2021 cycle and have since spent four years rationalizing.

This has left quality assets at more reasonable levels as sentiment remains depressed following a prolonged bear market in altcoins.

Bear Markets, Burnout, and Opportunity

He noted that regulatory uncertainty in the United States has historically impeded institutional and enterprise participation. The dual equity-token ownership structures, weak disclosure practices, cyclical revenues, and the absence of shared valuation frameworks further contributed to severe token underperformance after 2021.

According to Watkins, these structural flaws compounded the impact of excessive expectations, leading to significant price drawdowns, psychological burnout among market participants, and the exit of speculative capital that viewed crypto as a “low-effort” path to wealth.

He argued that this washout has been a necessary and healthy development, as the pre-2022 era enabled weak projects to generate outsized returns, which he described as unsustainable. Watkins said many of these issues are now being addressed as regulatory pressure eases, alignment between token holders and insiders improves, and disclosure standards mature alongside third-party data providers.

The analyst also pointed to a growing set of crypto use cases that continue to show compounding growth independent of price cycles, including peer-to-peer financial platforms, digital dollars, permissionless exchanges, derivatives markets, global collateral systems, on-chain fundraising, tokenized asset issuance, and decentralized physical infrastructure networks.

He added that consensus is forming around the idea that most crypto assets must ultimately generate cash flows, while Bitcoin and Ethereum stand out as rare store-of-value exceptions, and that self-sovereign ownership of on-chain cash flows represents a major innovation.

Top Blockchains Turning Into Fastest-Growing Businesses

Watkins said leading blockchains such as Ethereum, Solana, and Hyperliquid are solidifying their positions as foundational standards for startups and enterprises, as they host some of the fastest-growing businesses globally due to their permissionless design, capital efficiency, and global distribution. He observed that Wall Street and Silicon Valley firms are increasingly launching production-grade blockchain products, particularly in tokenization and stablecoins. These efforts are accelerating as regulatory clarity allows enterprises to shift focus toward revenue expansion and cost reduction.

Despite this, Watkins said few analysts are modeling exponential growth, and many predict annual growth rates below 20%, leaving what he described as a mispriced multi-year opportunity for top projects. He went on to add that crypto is becoming more inevitable as trust in institutions falls, sovereign debt rises, and currencies weaken.

However, stronger competition and higher expectations will likely push weaker projects out and leave only a few native winners.

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