Why the next crypto supercycle could be driven by layer 1s and AI

The crypto market is moving into a phase most investors still don’t fully understand. Instead of hundreds of competing chains all winning a slice of the pie, the thesis now is that only a handful of layer 1 blockchains will capture the majority of value—just as AI agents and robots start needing their own financial rails.

This isn’t just about the next bull run. It’s about crypto becoming core infrastructure for both human and machine economies.

The idea: only 3–5 layer 1s will really matter

Look at any major digital infrastructure market—operating systems, cloud computing, mobile platforms. Over time, value concentrates into a few dominant players. You don’t end up with 50 winners. You get three to five giants, a few specialists, and a long tail that barely moves the needle.

The same logic is now being applied to layer 1 blockchains. The argument is simple: as the world’s assets, transactions, and financial systems move onchain, most of that activity will settle on a very small number of base networks. Those chains will become the core rails of the new financial internet.

Everything else either becomes niche, gets absorbed into the dominant ecosystems, or fades away.

Economic and intelligence density: the real metric that matters

Instead of asking, “Which coin will go up the most?”, this framework asks a different question: “Which chains have the highest economic and intelligence density?”

Economic density is about how much real value lives on a chain and how sticky that value is. Key signals include:

• Total value locked (TVL) in DeFi and other protocols
• Stablecoin balances and how much “stored energy” sits on the chain
• How well activity and liquidity hold up during big market crashes

Intelligence density is about human and technical capital:

• How many developers are building there
• How many applications exist and how fast that ecosystem is growing
• How programmable and efficient the chain is (speed, cost, throughput, finality)

The chains that combine both—deep economic activity and strong developer ecosystems—are the ones most likely to dominate long term.

Why Ethereum still looks like core infrastructure

In this framework, Ethereum sits at the center of the current crypto stack. It has:

• The largest developer community in crypto
• Deep Lindy effects (it’s been battle-tested for years)
• Huge economic dependency from DeFi, NFTs, real-world assets, and layer 2s

One way to think about Ethereum’s value: what happens if you pull the plug?

If Ethereum disappeared overnight, most of DeFi, a large chunk of tokenized real-world assets, a massive NFT history, and a huge number of layer 2s would effectively go to zero. That’s the kind of systemic importance that’s hard to price with simple fee-based models or discounted cash flows.

Even if Ethereum isn’t the fastest or cheapest chain, its role as a base settlement layer for a huge share of onchain finance makes it look more like a global operating system for value than just another altcoin. For a deeper dive into how this plays out versus BTC, see this structural outlook on Ethereum vs. Bitcoin.

Solana and Sui: speed, efficiency, and the next wave

Not every winning chain will look like Ethereum. Some are optimized for speed, cost, and user experience, which can matter more for retail, gaming, and high-frequency applications.

Solana has positioned itself as a high-performance chain with:

• Very fast block times and low fees
• Strong traction in trading, retail activity, and consumer-facing apps
• A growing developer base and ecosystem despite past drawdowns

It has already proven it can recover from major setbacks and still attract new demand, which is a key sign of resilience.

Sui is newer but is being watched closely because of its technical design:

• Very high throughput and fast finality
• A focus on advanced programmability and efficient execution
• Early signs of strong TVL per user and stable economic density, even through market volatility

On Sui, metrics like the ratio of stablecoins to TVL are important. Stablecoins represent “stored energy” ready to be deployed into DeFi, trading, and applications. When that ratio grows, it’s a sign that users trust the chain enough to park capital there, not just speculate and leave.

Why discounted cash flow models miss the point

Many traditional analysts try to value blockchains using discounted cash flow (DCF) models based on fees. The problem: the purpose of a good network is to become cheaper and faster over time, not to maximize fees per transaction.

If you only focus on fee revenue, you miss the real signal:

• Is the chain getting cheaper and more efficient?
• Is it attracting more developers and users as it scales?
• Is economic and intelligence density increasing over time?

In other words, the winning chains are likely to be those that convert energy (hardware, bandwidth, human effort) into programmable outcomes as efficiently as possible. The more useful and accessible they become, the more value they can ultimately host—even if per-transaction fees trend lower.

Bitcoin’s separate but crucial role

In this thesis, Bitcoin plays a different game. It’s not trying to be the most programmable or the fastest base layer. Its main job is global savings.

Think of Bitcoin as a pure store of value asset with one target: capturing a share of global savings over time. That creates a natural ceiling (it can’t exceed 100% of global savings), but the addressable market is still enormous.

Layer 1 smart contract platforms like Ethereum, Solana, and Sui, by contrast, can scale almost infinitely in terms of the economic activity they host. They’re not limited to savings—they can power entire financial systems, digital ownership, and eventually machine-to-machine commerce.

For more on how this fits into the broader macro picture for BTC, you can check out this breakdown of the $100T crypto tsunami thesis.

AI agents, robots, and why they need blockchains

While the infrastructure story plays out on one side, something just as important is happening on the other: the rise of AI agents and robotics.

Since the launch of ChatGPT in 2023, AI progress has accelerated fast:

• Language models have gone from chatbots to agents that can interact with websites and tools
• Robotics has advanced in dexterity and real-world deployment (warehouses, logistics, drones)
• AI systems are now reaching superhuman performance in specific problem-solving tasks

The key shift is that we’re moving from humans using tools to autonomous systems acting on their own. Agents can already:

• Browse and interact with web apps
• Execute workflows end-to-end
• Make decisions based on data and goals, not just prompts

Robots and drones are starting to operate at industrial scale in controlled environments. Over time, these systems will dominate a large share of internet traffic and economic activity.

Why traditional financial rails won’t be enough

Once you have millions (or billions) of AI agents and robots interacting, you run into a problem: how do they coordinate, verify actions, and move value around the world without a human in the loop?

Legacy financial rails weren’t built for:

• 24/7, high-frequency, machine-to-machine payments
• Instant settlement across borders and platforms
• Transparent, programmable rules that agents can follow and enforce autonomously

Blockchains, especially scalable layer 1s and their ecosystems, are much better suited for this. They provide:

• A neutral, global settlement layer anyone (or anything) can access
• Transparent, auditable transaction history
• Smart contracts that encode rules and incentives directly into the system

In this view, crypto isn’t just “the future of money” for humans. It’s the financial and coordination layer for machines.

The convergence: infrastructure dominance meets AI acceleration

Put these two narratives together and you get a powerful long-term thesis:

• On one side, value concentrates into a few dominant layer 1 blockchains that become the base infrastructure for the digital economy.
• On the other, AI agents and robots rapidly scale, creating constant demand for programmable, global, always-on financial rails.

The same chains that host DeFi and NFTs today could become the settlement layers for autonomous systems tomorrow. As more human and machine activity moves onchain, the economic and intelligence density of the winning networks compounds.

That’s what people mean when they talk about a potential “supercycle” or “banana zone” for crypto: not just another speculative bull market, but a structural shift where crypto becomes a core layer of the global economy.

What this means for long-term investors

If this thesis plays out, the strategy is less about chasing every new narrative and more about owning the core infrastructure:

• Focus on a small basket of high-conviction layer 1s with clear economic and intelligence density (e.g., Ethereum, Solana, Sui, plus any other chains that show similar resilience and traction over time).
• Watch metrics like developer activity, TVL, stablecoin balances, and how well these chains hold up during major drawdowns.
• Remember that the biggest winners may not be the ones with the highest fees today, but the ones that become the cheapest, fastest, and most programmable platforms at scale.

In other words, think less like a trader hunting for the next 100x microcap and more like someone choosing which operating systems and cloud platforms will run the world for the next few decades—because that’s effectively what these layer 1s are becoming.