The cryptocurrency market is entering a period of introspection as investors and industry leaders reassess valuation models and long-term sustainability. In a recent discussion, Santiago Roel Santos, founder and CEO of Inversion Capital, shared critical insights into what he sees as a growing disconnect between cryptocurrency valuations and their underlying economic fundamentals.
Santos brings a distinct perspective to the valuation debate, arguing that Bitcoin is often miscategorized. While it is frequently treated as a commodity, Santos believes that most other cryptocurrencies should be evaluated more like technology stocks. In his view, many digital assets are priced as if they were high-growth tech companies, yet their valuations fail to reflect meaningful revenue generation.
According to Santos, the cryptocurrency industry has invested more than $100 billion into infrastructure but continues to struggle with demand. He compares today’s blockchain networks to oversized superhighways with limited traffic, suggesting that congestion and high transaction fees are not signs of maturity but indicators of an early-stage ecosystem. Ethereum serves as a prime example in his analysis. Despite a market valuation near $350 billion, the network generates roughly $1 billion in annual revenue, implying a price-to-sales ratio of approximately 350.
This disparity raises a fundamental question for investors. Is the crypto market experiencing a speculative bubble, or is value simply being misunderstood? Santos suggests the answer lies in separating infrastructure platforms from user-facing aggregators. Companies such as Binance, Coinbase, and Robinhood have succeeded in monetizing transaction activity, while base-layer protocols like Ethereum have yet to capture comparable revenue streams. This gap challenges long-held assumptions that infrastructure alone would command sustained value accumulation.
Network effects also play a central role in Santos’ assessment. He argues that meaningful network effects are not occurring at the user level for most cryptocurrencies but rather at the infrastructure layer. Comparisons to companies like Facebook or Visa underscore the distinction. Those firms justify premium valuations through predictable cash flows and sustained user engagement. In contrast, many crypto assets reflect speculative pricing rather than consistent economic output.
As the digital asset market matures, this distinction becomes increasingly important. Santos emphasizes that infrastructure platforms must evolve beyond theoretical utility and deliver tangible use cases that drive real demand. Without meaningful adoption and recurring revenue, valuations risk remaining detached from economic reality.
For investors navigating crypto markets, Santos stresses the importance of identifying where value is actually being created. As stablecoin usage expands and consumer adoption grows, understanding which segments generate reliable revenue could become a decisive factor in portfolio performance. Historical parallels with social media and e-commerce suggest that user aggregation and monetization, not infrastructure alone, ultimately dominate value creation.
In conclusion, while cryptocurrencies have undeniably reshaped financial markets, their long-term valuation frameworks remain unsettled. Santos’ analysis challenges investors to reconsider assumptions, look beyond market capitalization, and focus on revenue sustainability. As blockchain technology continues to intersect with artificial intelligence, finance, and sustainability investing, disciplined evaluation will be essential.
The perspective offered by Santiago Roel Santos adds a sobering voice to an industry defined by rapid innovation and speculation. As crypto continues to evolve, separating narrative-driven optimism from economic fundamentals may prove critical for long-term success.