NYDIG Says Crypto’s “Investable Universe” Is Shrinking – and That’s a Good Thing

NYDIG says the range of crypto projects capable of drawing sustained investor interest is contracting as the sector matures, arguing that this shift may clarify which assets are built to last. In a recent note, research head Greg Cipolaro wrote that the industry’s “investable universe” is narrowing to applications that “extend traditional finance products onto blockchain infrastructure”.

He identified Bitcoin, tokenised assets, stablecoins, certain decentralised finance infrastructure and a small group of general-purpose blockchains such as Ethereum as the areas still attracting meaningful capital. Beyond these categories, he said “the probability of large-scale blockchain applications appears lower than previously assumed”.

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Blockchain’s Limits Become Clearer

Earlier expectations that blockchain would underpin a wide range of industries have not materialised, with sectors such as gaming, social networking and the metaverse losing momentum against centralised competitors. Cipolaro argued that centralised systems “will always be faster, cheaper, and operationally more efficient for the vast majority of enterprise and consumer applications”.

He added that the “space for economically viable blockchain applications is narrower than early narratives hoped”, with only use cases where blockchain’s advantages exceed its costs likely to endure. 

“The core attributes of open blockchains, trustlessness, permissionlessness, and censorship resistance, are uniquely suited to money and money-like (financial) applications.”

Market trends reflect this consolidation, as Bitcoin’s dominance has increased amid a “limited emergence of durable new narratives” in alternative tokens. Cipolaro said a “more sober market, anchored in monetary and financial utility rather than broad ‘web3’ ambition, may ultimately strengthen core assets”, while also implying a smaller overall addressable market.

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