Crypto investors are increasingly evaluating tokens based on revenue, usage, and value capture over longer investment horizons, according to industry executives at Bitwise, Wintermute, and the Arbitrum Foundation. As reported by CoinDesk, this represents a significant departure from earlier cycles where investors valued new layer-1 networks as fractions of larger blockchains. Hyperliquid's HYPE token serves as an early example, with investors now valuing the derivatives platform's trading activity and economics rather than treating it as a smaller version of another blockchain. The token has gained approximately 20% over the past year. This fundamental-driven approach is now being validated by broader market trends, as investors increasingly look beyond Bitcoin to alternative cryptocurrencies that offer higher potential returns and sector rotation opportunities.
According to Wintermute OTC trader Jasper De Maere, institutional counterparties now account for roughly 72% of spot over-the-counter flow in the first half of 2026, up from around 59% a year earlier. As reported by CoinDesk, these flows have concentrated in major cryptocurrencies and a shortlist of revenue-generating tokens, with tokenized real-world assets emerging as the main new category. De Maere noted that fundamentals set the floor and the shortlist, while flows set the price, with revenue and usage determining which tokens survive drawdowns or make it onto allocator shortlists. This institutional shift is particularly evident as Bitcoin ETFs remain popular with investors, continuing to dominate the U.S. crypto market despite broader diversification trends.
The shift is reflected in stark market performance differences, with cryptocurrencies falling 36% in the first half while crypto stocks rose 23%, according to a Bitwise market review cited by CoinDesk. This divergence demonstrates the two groups are drifting apart, though it doesn't necessarily mean stocks will continue outperforming tokens. The performance gap highlights the growing separation between traditional crypto assets and publicly listed companies tied to the industry. However, the broader crypto market is experiencing an altcoin season where smaller cryptocurrencies are delivering higher potential returns and sector rotation opportunities, with some tokens potentially increasing their value by 200% compared to Bitcoin's 2% gains.
The stablecoin market has experienced significant changes, with the stablecoin market cap shrinking from around $321B to about $305B since May 20, representing a 5% drawdown that is actually the third largest in the industry's history. According to Cumberland's Paul Kremsky, this selloff appears to be a fairly orderly off-ramping of crypto from crypto markets rather than a fundamental issue with stablecoins themselves. While stablecoin price action has not been dramatic, the current drawdown is notable as it follows the 2022 drawdown that lasted over a year and was driven by fundamental questions about the stablecoin industry. Despite overall decline, there's been widespread growth in yield-bearing onchain cash equivalents, which have grown by 101% since the start of the year, representing a move away from crypto tokens while keeping assets on digital rails.
According to Arbitrum Foundation's Brendan Ma, analysts are now focusing on credible metrics that cost something to produce and can be verified onchain. As reported by CoinDesk, these include fee revenue, fee-paying users, and capital that remains on a network, including stablecoin balances and tokenized assets. Ma pointed to Arbitrum as an example, noting the network has processed more than 2.7 billion lifetime transactions, including over 500 million in 2026. The network's Robinhood Chain is running at roughly $40 million in annual revenue, with 10% of net protocol revenue returning to the Arbitrum ecosystem under expansion programs. This focus on verifiable metrics is driving capital rotation from Bitcoin to altcoins that offer real-world utility and tokenization of traditional assets.
