The Ownership Cycle

There's a shift happening in crypto right now that most people outside the industry aren't paying attention to. If you understand it before the next wave hits, you'll be ahead of almost everyone.

For decades, the playbook in stocks has been simple: find great companies, buy shares, and hold. Ownership means something. You're entitled to a cut of earnings, buybacks, dividends - the whole value creation machine. The longer you hold, the more you're rewarded. It's not glamorous, but it works.

Crypto flipped that script entirely, and not in a good way.

With rare exceptions, the dominant strategy in crypto has been to trade. Get in early, ride the narrative, get out before the music stops. The entire culture is built around it. And honestly? For most tokens, this is rational behavior. If holding a token doesn't entitle you to anything real, then the only reason to hold is the belief that someone else will pay more for it later. That's not investing. That's a momentum game.

It goes deeper than just the traders, though. There's a well-worn cycle at this point: a team launches a project, creates a token, waits for their allocation to unlock, cashes out, and moves on to build the next thing. The token holders are left holding the bag while the founders are already pitching their next venture. It's become so predictable that people barely even get mad about it anymore. It's just how things work.

Part of this is understandable, even worth celebrating. Crypto is a young asset class sitting on a technological frontier that's gone from a steady jog to a full sprint. Ideas that felt groundbreaking eighteen months ago already feel outdated. That pace of innovation is genuinely exciting; it means the space is alive, evolving, attracting talent and ambition. You don't get that kind of energy in a stagnant industry.

But the other part (the more avoidable part) is how rewards and incentives are designed. Too often, teams retain full ownership of the actual technology and intellectual property, then slap a token on the side whose only real function is letting holders vote on proposals. Think about that for a second. Imagine buying Apple shares, except you have zero legal claim to the company's assets, revenue, or profits. All you get is the ability to cast a vote at the annual shareholder meeting. Those shares would be worthless. That's what a lot of token holders are sitting on right now.

There's another layer to this too. For years, most of the economic value in crypto has flowed to the underlying networks (the base layer infrastructure) while the apps that actually bring users and activity to those networks have been left to fend for themselves. Ethereum is a textbook example. The apps built on Ethereum generate enormous amounts of activity, but the value from that activity has largely gone to Ethereum itself, not to the builders creating the experiences people actually use. That's forced app developers to launch their own tokens just to survive, and while I sympathize with why they do it, it's unfortunate. It fragments the ecosystem and turns every app into a mini token project when it should just be focused on building a great product. Newer networks like Canton are starting to address this by rethinking how value gets shared between the infrastructure and the applications on top of it, which is a step in the right direction.

But here's the thing about bear markets: they tell you what to buy next. When the hype drains out and speculation disappears, what's left is a clear picture of where real value was sitting all along. And what's becoming obvious is that we're entering an ownership cycle. Projects with real revenue, real users, and (most importantly) token designs that actually capture and return that value to holders are going to be rewarded handsomely. We're already seeing it. Hyperliquid is a prime example: a project where the token's value is tied directly to the platform's success, and holders benefit when the platform grows. That's what real ownership looks like.

The projects that don't figure this out? They're bleeding toward zero, and the bleed is only going to accelerate. The gap between tokens that represent genuine ownership of something valuable and tokens that are just along for the ride is about to get very, very wide.

Crypto's ownership problem isn't fatal. But solving it means the industry has to accept something traditional finance figured out a long time ago: if you want people to hold, you have to give them a reason to.

Cheers,

Louis Sykes
Senior Crypto Analyst, All Star Charts