ARKInvest Digital Assets: The Next Bull Market Will Be The Biggest Ever (What We Expect)

ARK Invest's Lorenzo Valente recorded this episode during a roughly ten-month bear market he described as producing a record number of company and product shutdowns. He flagged that market consensus around which tokens will outperform is unusually high, which he views as a warning sign because consensus positioning historically precedes dispersion in actual outperformers. The pockets of growth he identified are concentrated in stablecoins and orchestration, real-world assets and tokenization, and meme coin launchpads like Pump.fun. Long-term L1 assets including Ethereum, Bitcoin, Zcash, and Solana are down 50 to 70 percent from highs but he considers their fundamentals still strong.

A structural gap between off-chain and on-chain businesses is a central theme. Off-chain centralized companies generate roughly 8 to 10 times more revenue than on-chain protocols, with on-chain crypto revenue in 2025 estimated at approximately 8 billion dollars. Centralized companies sit closer to the user, move faster without DAO governance, and command a premium for certainty. Open-source protocols allow competitors to copy mechanics and execute vampire attacks like the Sushi-Uniswap episode, compressing margins industry-wide. Token equity structures often do not accrue value to end users, and some protocols were effectively forced to launch tokens during the Gensler era when they may not have needed one, creating misalignment between business quality and token performance.

The Robinhood chain launch was cited as a structural shift where apps now pay Robinhood in tokens for distribution access, reversing the prior dynamic where L1s paid apps to build on them. This reflects a broader view that distribution is now more valuable in crypto than protocol infrastructure. Regulatory path dependency under Gensler forced what speakers called fugitive decentralization and shaped which business models are investable and which moats have formed. The FIT21 clarity act has approximately 10 percent or below probability of passing according to prediction markets.

The buyback debate produced genuine disagreement. The top-performing tokens over the last 12 months outside of Zcash and Monero are concentrated in stablecoin, perpetuals, and on-chain trading verticals and all have buyback programs. Lorenzo pushed back, arguing this is circular logic because only protocols with revenue can afford buybacks, so they would outperform non-revenue protocols regardless. He cited data showing little statistical difference in performance between protocols doing buybacks and those not, and argued that buybacks signal a protocol has no better use for capital and is out of growth ideas. Paul, CEO of Morpho, was cited as targeting 10x to 1000x returns and refusing buybacks because the industry is too small to sacrifice growth for 5 to 10 percent gains. Andy predicted the pendulum will shift back toward a middle ground rather than buybacks being a binary requirement for investability.

Solana is hitting all-time highs in on-chain transaction count but its revenue is at a multi-year low because low block space contention means little bidding for block space. Speakers noted that L1s relying on base fees rather than priority fees and MEV would need 10 to 100 million TPS to generate meaningful revenue, and that three trillion dollars of assets on Solana and Ethereum could coexist with very little fee revenue accruing to ETH or SOL. Hyperliquid monetizes the application layer directly, generating 500 thousand to one million dollars per day in revenue, and is valued at approximately 59 billion dollars fully diluted. Sky is valued at approximately 1.5 to 2 billion dollars fully diluted and did more 24-hour revenue than Hyperliquid on the day speakers fact-checked it. Pump.fun did more 30-day revenue than Hyperliquid in a recent period, burned 36 percent of its token supply around June, and turned on a 50 percent programmatic buyback of all revenue in a smart contract, after which its token rose approximately three times from its lows. Whether L1s need to generate revenue at all was described as the trillion-dollar question with no settled answer.

The Zcash debate produced the sharpest disagreement. Lorenzo argues Zcash is second only to Bitcoin as a store of value, describing it as thermodynamic, post-quantum, and private hard money, and claims OG Bitcoin holders with 500 or more coins are allocating into it. A second speaker counters that Zcash does not compete with Bitcoin on liquidity, exchange acceptance, decentralization, node count, or hash rate. Lorenzo acknowledges that Zcash held on an exchange cannot access shielded pools, limiting utility to price exposure, and that only approximately 25 percent of coins worth roughly 2 to 3 billion dollars out of an 8 billion dollar total are currently shielded. The second speaker notes that if Ethereum or Solana implement L1 privacy, that would become the preferred choice over Zcash at that future point. A third speaker adds that storing USDC privately still leaves users exposed to Circle's ability to freeze funds, and that programmability undermines privacy when users move between private and non-private applications.