The crypto market is maturing, and fundamentals are more critical than a hundred times bet

The latest cycle of the crypto market repeatedly presents a familiar pattern: attention and narrative momentum often come before fundamentals.

Behavioral finance researchers point out that this phenomenon is not unique to the digital asset space-it is only amplified in a market where new themes are spreading rapidly and investors may regard the pursuit of wealth change as their main goal.

In a comment shared to Magazine, Samar Sen, head of international business at Talos, believes that in younger markets,"price discovery... tends to be driven first by attention rather than analysis." This development helps explain why new tokens built around new stories can grab the headlines, while some more mature, revenue-generating agreements can be ignored even if their underlying businesses continue to improve.

Core Points

Behavioral research shows that many investors allocate funds to goals that will bring "life-changing" results, rather than just pursuing maximizing risk-adjusted returns. Cryptographic narratives may spread faster than the fundamentals of the agreement, leading to price coming first. A comparison of research conducted by MarketWise combined with behavioral theory showed that speculative winners and "lottery-style" behavior may dominate the performance of various asset classes. Institutional investors often prioritize assessing liquidity, custody and operational resilience over upside potential, which puts them in a different position than retail investors in a fast-rotating cycle.

Why narratives can outperform fundamentals

In behavioral finance terms, the problem of "attention first" arises when investors are more likely to believe an easy-to-understand story than take deeper effort to evaluate a mature project. Sen told Magazine that evaluating a mature agreement requires understanding its actual usage, revenue generation, token design, and competitive positioning-tasks that are much more difficult than quickly absorbing a new narrative.

The broader implications are that the crypto cycle may be more like a narrative cycle than a steady assessment of economic fundamentals. Even as the industry matures-institutional participation increases, revenue-generating agreements emerge, and real-world application scenarios increase-the market still tends to chase the next theme that promises to deliver excess returns.

From playing cards to "transformed" portfolios

Why do investors chase the next cycle repeatedly? Meir Statman, a pioneer in behavioral finance and a professor at Santa Clara University, points out that people's motivations to invest often go beyond the traditional assumption of maximizing returns. Statman believes that investors psychologically divide wealth into two levels: a "not poor" level, which is used to maintain living standards and avoid falling into poverty; and a "getting rich" level, which is used to achieve transformative goals such as buying a house or financial independence.

Under this framework, concentrated betting is not irrational. Diversification is statistically reasonable, but for investors with limited capital, diversification may provide slim chances of achieving transformative goals-especially when alternative candidates seem unlikely to lead to "getting rich" results.

James Royal, a senior writer at MarketWise, agrees. He told Magazine that investor loyalty is usually not tied to a particular asset class-whether it's crypto, stocks or collectibles. Instead, investors will move to the next area that promises high returns. Royal also said that while investors are not simply seeking risk, the "fear of missing" surrounding potential "life-changing" returns may lead them to underestimate downside risks.

MarketWise Comparative Study: Attention and Results

A recent study by MarketWise compared hypothetical investments of $10,000 each in multiple categories, including cryptocurrencies, stocks, exchange-traded funds, and collectibles, from January 2021 to April 2026. Research found that a box of sealed Pokémon cards outperformed Bitcoin in terms of performance, while limited edition sneakers gave almost equal returns to dogcoin.

During the same time period, research also found that some popular AI-themed funds, despite dominating the headlines, lagged behind the overall stock market. The conclusion is not simply that some assets are better than others, but that the dynamic of "better stories" may outweigh fundamentals in capital allocation, especially when investors are looking for transformative results.

Statman concluded that investors don't always buy the "best" assets strictly. Instead, they may be buying a lottery ticket designed to change lives-an approach that works for both digital assets and collectibles and even certain stocks.

The contrast between DeFi fundamentals and token popularity

The tension between the fundamentals of the agreement and the popularity of tokens is particularly evident in the decentralized finance field. Even if large platforms generate considerable revenue and attract large amounts of capital, their tokens may not receive the same attention as new narratives.

The article illustrates that the trading price of Aave tokens at the time of writing was approximately US$98, down approximately 85% from the 2021 peak; while Aave's total locked value is described as more than US$14 billion, reaching more than US$37 billion at the peak of the bull market in October 2025. The core view is that on-chain activity and locked value may perform strongly, but token price performance does not match the same speculative enthusiasm.

Kaiko research analyst Thomas Probst emphasized that in the long run, fundamentals remain important, especially resilience, liquidity, volatility and the robustness of market structures. However, the article points out that tokens linked to a mature agreement may have difficulty competing in attracting investors 'attention when faced with extreme, albeit remote, upside possibilities.

Royal summed up this mismatch by saying that investors may confuse "a great technological breakthrough with a great investment opportunity." In other words, innovation itself may still have value, but the price the market is willing to pay for upside will shift as the narrative changes.

Institutional investors have different evaluation methods-entry timings are also different

Sen said institutional investors are constrained and find it difficult to pursue purely narrative. He believes that institutional investment instructions usually do not allow investors to focus only on speculative excess returns. Instead, institutions tend to assess risk-adjusted performance, liquidity, custody arrangements and operational resilience before assessing upside potential.

This difference may affect the timing of institutions 'entry during the cycle. Sen describes a recurring pattern: themes often start with something real-technological breakthroughs or new application scenarios. But once speculative money starts pouring in, prices may move faster than fundamentals. According to Sen, investors entering later may be responding more to the narrative itself than to the fundamentals that spawned the narrative in the first place. At the same time, institutional capital, often subject to process and discipline, may be one step slower than the first wave of narrative impulses, but one step faster than subsequent adjustments.

Timing risk: Buying during the cycle versus buying at the peak

MarketWise's report highlights how entry timing dominates the final outcome in narratives driven markets. The report shows that assuming an investment of US$10,000 in Bitcoin in January 2021, it will grow to more than US$24,000 by April 2026, an increase of +141%. However, if the same investment enters the market at Bitcoin's peak cycle in October 2025, it will fall to just over $6000 by April, with a return of-38%. In the context of the article, the "today" valuation is about $5000.

The article further pointed out that if investors chase another hot target late in the same cycle, investors will face huge losses. The article provides an example of buying AAVE-related assets in a similar period of time, with a decline of approximately 85% as of the time of writing. While individual outcomes vary widely, the larger lesson is consistent with the behavioral framework: narratives can temporarily override fundamentals, and buying after the story has gained momentum can dramatically change risk characteristics.

For market participants, the immediate question is not whether the "next hundredfold" will continue to be chased-it is likely to continue to be chased-but how investors can distinguish a truly new breakthrough from a narrative that is already priced. As the narrative of the next cycle takes shape, focusing on liquidity conditions, agreement-level usage and revenue trends, and whether price movements continue to exceed fundamentals may provide a practical way to distinguish the two.