Variant Fund investment partner Alana Levin says that if crypto did in fact bottom sometime in July, the market is now dealing with a different question: whether a new bull market has actually begun, and which projects would benefit most if it has.
Levin wrote that earlier in the summer, the question hanging over the market was when the bottom would arrive. She said she wrote in early July that a bottom seemed close at the time, when BTC was at $59k, ETH at $1600, and ZEC at $420. Looking back now, she said the answer appears clearer: the bottom most likely has already formed, and it appears to have happened at some point in July.
Two groups she expects to attract incremental dollars
Assuming the market is in the early phase of a broader crypto bull run, Levin said a growing consensus appears to be forming around two categories of assets that could draw marginal inflows. The first is protocols that are themselves money, such as store-of-value assets. The second is protocols that can generate earnings.
From there, she shifts to what she calls the second-order question: if everyone comes to believe those are the asset classes worth owning, what follows from that?
Store-of-value assets may be judged against Bitcoin
For assets that function as money, Levin said Bitcoin remains the dominant digital store of value. Any asset that hopes to compete for that role will likely be valued relative to BTC, in her view, using a simple benchmark: what percentage of Bitcoin’s market capitalization does it represent, and how does that ratio change over time?
She argues that store-of-value assets have theoretically uncapped upside because their total addressable market is, in a literal sense, money itself. On that basis, market cap relative to Bitcoin gives investors at least one reference point to work from.
Revenue-generating protocols could be judged on the quality of earnings
Levin expects investors to ask a different set of questions when looking at protocols that make money. She said the focus is likely to move toward revenue quality: whether income comes from crypto-native activity such as Pump, or from tailwinds tied to more traditional financial activity such as Hyperliquid; how durable that revenue would be if the crypto market pulled back; and what margins look like.
Those are, in her framing, the same types of questions that public-market investors would ask when evaluating listed companies.
She added that the answers will likely determine which names receive multiple expansion. The projects best positioned to win higher revenue and earnings multiples, she wrote, are the ones that meet three conditions:
- they are exposed to growth in RWA and stablecoins rather than relying only on crypto-native activity,
- they have a visible path to attracting institutional users, and
- they showed durability during the previous bear market while still being led by a founder-CEO.
A third category looks more like a trade than an investment
Levin also points to a third bucket: onchain projects that can be compared with non-crypto businesses. She said these are the projects most likely to trade on narrative, and stressed that most of them should be viewed as trades rather than long-term investments.
The appeal is straightforward. Investors can point to a known business and a known valuation outside crypto, then ask what happens if the onchain version reaches something similar.
She said some of the clearest themes here are projects that map onto parts of the AI stack, including routers, inference, compute, data collection, and interfaces.
At the same time, Levin said she remains skeptical that many of these use cases truly need a blockchain. She also argued that these projects often come with questionable token-equity splits, where value fundamentally accrues to equity while the token is left with some arbitrary buyback mechanism.
Her warning is direct: a profitable project does not automatically mean the token captures value. She described that as an old story in crypto. Even so, she said some of these names could still make good trades. Personally, she added, if this group starts to rally hard and outperform, she would take that as a top signal because it would suggest market discipline is loosening.
Why the framework matters now
Levin said crypto has historically been highly cyclical, with bull and bear markets over the past decade often following a fairly consistent four-year pattern. This year, though, she sees something different. Some assets never really entered a bear market at all and instead kept compounding on the back of strengthening fundamentals.
She said she still believes capital will keep aligning with those projects. While they may still experience pullbacks, she expects those moves to look more like corrections in traditional markets, in the 10% to 30% range, rather than the drawdowns of more than 90% seen in some earlier crypto cycles.
In her view, that is one of the clearer signs that the market is maturing.