Crypto Market Narrows Down to Core Financial Use Cases

The crypto market has been undergoing significant changes in recent times. A research note released by NYDIG highlights this shift, stating that the industry is moving away from its Web3 ambitions and towards a more focused approach.

According to Greg Cipolaro, Global Head of Research at NYDIG, the era of sweeping Web3 visions is fading. Instead, crypto is consolidating around a narrow set of applications that extend traditional finance onto blockchain infrastructure. This transition implies that the industry's total addressable market may be smaller than previously projected.

The report identifies a short list of long-term survivors in the crypto space, including Bitcoin as the primary monetary asset, tokenized real-world assets (RWAs), stablecoins, and select DeFi tools that enhance traditional financial products. These areas are expected to endure due to their clear structural advantages over centralized systems.

Cipolaro notes that blockchain gaming, decentralized social networks, and the metaverse have failed to displace centralized competitors at scale. The broader idea of Web3 as an alternative to nearly any digital offering has fizzled out, and capital is no longer spreading across experimental sectors. Instead, it is concentrating in core financial infrastructure.