The landscape for attractive crypto applications is becoming increasingly narrow, according to NYDIG. Their research lead, Greg Cipolaro, commented that only a select few crypto offerings are likely to capture investor interest, urging the sector to rethink its ambitions related to the broad concept of ‘web3’.

Cipolaro specifically identified a handful of areas where crypto may thrive, including Bitcoin, stablecoins, and tokenized assets. He noted that many applications once thought to drive substantial growth, such as gaming and social media, are failing to compete effectively with centralized alternatives.

Cipolaro expressed that as the industry matures, the focus will shift toward applications that substantiate the benefits of blockchain technology over traditional systems. He highlighted the current market dynamics, indicating a preference for Bitcoin, while many altcoins struggle to attract funding due to a scarcity of compelling narratives.

“The failure of many non-financial verticals to gain traction suggests a consolidation of capital toward a smaller set of use cases.”

With this narrowing focus, Cipolaro believes it may lead to more durable outcomes and clarity around top-performing projects, primarily those tethered to financial infrastructure. However, this shift could also lessen the speculative potential of the market.

“A more sober market, grounded in financial utility rather than broad ‘web3’ ambitions, may ultimately strengthen core assets, but it also indicates that the overall market scope may be smaller than previously expected.”