Variant Fund investment partner Alana Levin said in her market outlook for the fourth quarter of 2026 that the crypto market most likely bottomed at some point in July, according to ChainCatcher.
Levin said she had written in early July that a market bottom seemed close. At that time, Bitcoin was at $59,000, Ether was at $1,600, and ZEC was at $420.
The focus has shifted to whether the bull market is real
She said the main question is no longer whether the market has bottomed. The discussion has moved to whether the current move is the real start of a bull market or a false rally, and which projects are positioned to benefit most in the early stage of a new crypto upcycle. Her framework assumes the market is in the early phase of a new bull run.
Two groups of assets stand out in her view
Levin said a growing consensus is forming around where marginal capital is likely to go. She pointed to two categories: store-of-value protocols that function as money, and protocols that generate revenue.
On the store-of-value side, she said Bitcoin remains the dominant digital store-of-value asset. Other competing assets, in her view, may be valued based on their market-cap ratio relative to Bitcoin and how that ratio changes over time.
For revenue-generating protocols, she expects investors to examine whether revenue comes from crypto-native activity, such as Pump, or from traditional finance activity, such as Hyperliquid. She also said investors are likely to ask whether that revenue can hold up during market pullbacks and what profit margins look like.
What could earn higher multiples
Levin said projects with exposure to growth in real-world assets and stablecoins, projects that may attract institutional users, and projects still run by founders after coming through a bear market are more likely to win higher multiples.
A third bucket covers AI-related onchain projects
She also placed onchain projects that can be compared with non-crypto businesses into a third category. In her view, most of them are narrative-driven trades rather than long-term investments. The themes she listed included AI-related routing, inference, compute, data collection, and interfaces.
Levin said she is skeptical that blockchain is necessary for many of those use cases. If projects in that group start to outperform by a clear margin, she would take that as a sign that the market is getting close to a top.