Ethena Founder: Crypto-Native Capital May Be Exhausted and Unable to Boost Altcoin Market Caps, Tokens Endorsed by TradFi Will Diverge Completely from Ordinary Altcoins in the Future

BlockBeats News, July 25 — Guy Young, founder of Ethena Labs, posted on social media: “One of my major concerns is that native crypto capital may have been exhausted and is no longer able to drive altcoins past the previous cycle’s peak. If you look at the total nominal market cap peak for altcoins in Q4 2021 and Q4 2024, both stalled at around $1.2 trillion (the inflation-adjusted figures are almost identical). Perhaps this is the valuation ceiling for 99% of ‘air’ projects from global retail capital?”

“However, for tokens with real businesses, that produce tangible products and generate revenue from real users, there is a vast blue ocean in expanding access to institutional investors from the stock market. Compared to the global stock market capitalization, the entire altcoin market is just a drop in the ocean. The current NAV premium arbitrage is clearly fleeting; Saylor is the only exception, fundamentally due to the unique leverage advantage in his capital structure (quasi-irredeemable + quasi).”

“But why does Ethena still support StablecoinX’s ENA treasury strategy? The core goal is to build a channel for stock market capital to enter—these investors have a significant excess demand for hyper-growth companies in the stablecoin and digital dollar sectors. This has nothing to do with short-term NAV arbitrage; the key is to open the floodgates to untapped capital pools. Everyone knows Ethena faces the pressure of VC unlocks. I’ve made countless mistakes in fundraising and am still reflecting on them. There is a serious capital mismatch in crypto: private VC capital far exceeds the liquid capital needed to support token valuations, which is the mirror opposite of the Web2 world (where private capital is only a tiny fraction of the stock market).”

“Of course, this does not apply to all junk coins. Air projects with zero revenue are still air, even if you wrap them in an equity shell. But I firmly believe that for the few tokens that can gain traditional financial endorsement and fit long-term growth trends, this will be a major positive. Excluding mainstream coins, there are no more than 10 such tokens globally, and they will ultimately diverge completely from coins that TradFi has never touched.”