Every market has its reckoning, and for cryptocurrency, the reckoning can take a while once it's in progress. The total crypto market cap peaked near $4.4 trillion in late 2025 before crashing on Oct. 10 and then falling to roughly $2.7 trillion today. The lead asset, Bitcoin (BTC +0.17%), is 36% below its all-time high. The much-awaited and highly expected rotation of capital from Bitcoin into smaller altcoins never showed up, in contrast with every other recent crypto market cycle.
Now, investors (including yours truly) are asking whether the sector is finished as a source of returns and, if it isn't, whether the asymmetric returns of yesteryear relative to other asset classes is ever coming back. The evidence in favor of pessimism is not trivial, so let's unpack it and determine whether people should look for investments elsewhere on a long-term basis.
Image source: Getty Images.
The complaints are real, and mostly correct
The wreckage of the most recent crypto market cycle is in part due to the collapse of meme coin mania of 2024, which has cast a long shadow.
The meme coin market peaked at almost $150 billion before plunging to less than $42 billion, with 90% of top meme coins losing between 30% and 70% of their value. Dogecoin, the original meme coin and leader of its segment, is still 85% below its 2021 high. Meanwhile, nearly all the altcoins launched in 2025 were trading below their opening price by the end of the year.
CRYPTO: BTC
Key Data Points
Outside of the uninvestable meme coins, the main narratives and investment theses that were supposed to drive this era of crypto, namely pertaining to decentralized finance (DeFi), decentralized physical infrastructure (DePIN), and arguably real-world asset (RWA) tokenization, have largely failed to pull in new capital in any way that benefits most common coin holders. Thus, whether cryptocurrency remains a good investment is a question that keeps getting harder to answer with a confident yes.
The deepest problem is structural. Blockchains can host useful activity and be efficient places to perform financial operations of all different sorts, but there's usually no reliable mechanism connecting that activity to returns for coinholders.
Solana (SOL +2.42%) handles far more on-chain activity than it did in 2024, yet it's still down more than 70% from its highs, and its price is far lower than where it was for most of that year. The same problem applies even more severely to Ethereum (ETH 0.61%), which now hosts more than $16.6 billion in distributable tokenized real-world assets on its chain, up from $1.2 billion in 2024, and it also (still) is home to more than half of all DeFi value, yet has lost more than 50% of its value from its peak in late 2025.
CRYPTO: SOL
Key Data Points
Network usage is not the same as value capture, and crypto, as a sector, has not bridged that gap.
Don't count crypto out just yet
Despite all of the above -- and those are some serious issues that can't be discounted -- writing the sector's obituary would be premature. The people who have predicted that crypto is dead in the past have been proven wrong, time and time again, and it's unlikely to be different this time.
The most concrete bright spot to look forward to is asset tokenization, which is the process of recording ownership of real-world assets like bonds or commodities as tokens on a blockchain. The value of all of the tradeable tokenized assets in crypto has surged from $5.4 billion at the start of 2025 to more than $30 billion in May 2026, with institutional heavyweights driving a lot of the adoption. That means there's real capital on-chain, deployed by sophisticated players seeking operational efficiency; it's not all hype.
CRYPTO: ETH
Key Data Points
But there's no guarantee that the growth of tokenized assets will translate into price appreciation for the coins you can buy on an exchange.
Today, Ethereum hosts the plurality of those assets, and XRP (XRP +0.69%) is positioning its ledger to attract institutional capital with compliance-friendly features, yet both coins have fallen during the past six months. The future of cryptocurrency may depend on how the tokenization trend plays out, but which coins will actually profit from it remains unclear.
So for those willing to be long-term holders, the takeaway here is that patience might not be enough this time around. Keep any allocations outside of Bitcoin modest, and hold whatever you buy for several years. The era of explosive, sector-wide crypto gains is likely behind us, but there are bargains to be found right now nonetheless.
