2026 is the Year that Fundamentals Outperformed

Transcript

Pleasure to be here. Uh I would say uh listen up. This is quite a dense presentation. It's research that we're sharing. Um it's got a lot of data. So hopefully uh it's a bit dense. But we do get away with saying that 2026 is a year that fundamentals outperform. Um finally, I think this has been an ongoing conversation in the space. Um you know, do you invest in fundamental value or do you invest in in meme coins and other things? And it looks like this year is we're on track that fundamentals are actually here to stay and they outperform.

Um some disclaimers here. Those are obligatory. I'm sure everyone is reading it. Um and so basically, you know, for anyone who's been in this industry for longer, uh nothing ever beat Bitcoin, right? Bitcoin is the king. And since the 2021 top, there's basically 85% of large-cap tokens have underperformed Bitcoin. And the median return versus Bitcoin for every token above $100 million is minus 80% versus Bitcoin, right? So seems like Bitcoin is king. And then we've had sort of a a a market a bull market and you had but they were basically just rotations, right? You had Defi and was very hot and it outperformed, then you had AI crypto AI was performing really well. Then you had

meme coins, but basically each one of those only lasted two quarters. So they only for two quarters did they actually outperform. And so we basically this sort of quasi bull market for altcoins uh that had these two quarter cycles in the Defi and AI and meme coins that ended in Q4 uh last year. And so we did some research and look for a theme, something that would hold a lead on Bitcoin. And so there is one trade of large caps that are beating Bitcoin in this year and it's really one trade. They distribute value to the holders.

And what that means is that paying holders it will be returning on-chain revenue. So real money that protocol businesses are making, recurring revenue that users and institutions etc. are paying to use these services. And they're returning it to the token holders. Um So we've looked at over 2,000 protocols or 2,000 protocols already earn on-chain revenue. So these are what you could console could call real protocol businesses. Um $75 billion in traceable on-chain income traceable on-chain income in 2025.

Fees plus other income. And then over 250 projects digital assets actually run buyback and burn programs in this year. And so here's a very very important distinction is that some holder revenue is actually dilutive to holders. The best example is staking income. Right? So overall it's a net zero because I have to stake my token to earn transaction fees and particularly the inflation but that also means that the inflation is diluting everybody else who's not staking, right? So that for us is not holder revenue distributed to to token holders.

Um and so what value distributed to holders is is really it's the holder revenue minus the dilutive emissions. And then we refine that further into the dividend yield. That's really the important metric that ties all of this together. It's the value distributed annualized but is also in relation to the market cap. And now we tested basically 60 different factors um against five years of token returns, um um fundamentals, fees, fee growth, revenue, value distributed to holders, dividend yield.

token mechanics, burn mechanics, major exchange listings, block the Blockworks transparency framework, market cap, um sectors and narratives, right? So, we ran analysis against all these other um characteristics. Are these the things that actually make uh a digital asset outperform Bitcoin? And then also statistical rigor. Uh unfortunately, it's not very common in our industry. There's a lot of charts floating around on Twitter that may or may not be true. And so, uh you know, we basically did two tests, um two different statistical methods um to validate results. And here we go. Go ready for this. So, basically, this is the performance against Bitcoin

on both axes. And these are uh on the x-axis and on the y-axis, there's two different statistical methods. So, you can basically see whatever is in the top right is in a very sound uh statistically sound manner is outperforming against Bitcoin. And really the most uh sound one is that the dividend yield of a token is above 1%, which means the real net revenue that's being distributed back to holders relative to the market cap. If that's above 1%, that's the strongest signal that these assets are outperforming.

And so, those are uh beating the rest by 7% uh per quarter um against Bitcoin. Uh roughly 45% since 2025, and the median performance versus Bitcoin in 2026 is 17% this year. And this is the first time since 2021 that the median dividend payer beat Bitcoin uh this year. Um so it's plus 70% and most importantly is that this is also time where the others, let's say the ones without fundamental value, are actually massively underperforming Bitcoin.

And because that is really also the the big new insight or the I would say very positive market development because a lot of times you had random um coins uh just outperform for um really no apparent reason. And this actually we're seeing in this market that you do not have uh random coins actually without any fundamental value, without any business model, without any revenue actually uh randomly outperforming Bitcoin or other assets. Um so that's basically the big uh the big insight that not only is fundamentals beating Bitcoin, but everything else is also underperforming Bitcoin.

same thing actually happens also in the S&P 500 stock market. So high dividend stocks are beating the rest. Here's a a few more details on things that do not predict outperformance. Uh token burns, um fee growth, uh fee and revenue levels. So even a major sex listing uh centralized exchange listing doesn't uh signal over perform uh outperformance. Um and then particularly high incentive emissions relative to the market cap, right? So high inflation, that's kind of more obvious one. Broadly governance tokens themselves um having a tough time.

And uh this is here for the end. Uh very very interesting, maybe the most interesting that a rules-based fundamental index that we created uh returned 82% in 2026 while Bitcoin fell, right? So we've got 82% versus minus 5%. Um some rules here you can see rebalance monthly, market cap over 100 million, uh dividend yield of more than 1% per quarter, uh and weighted by the value distributed to the token holders, and there's a 20% cap per token in the index. And so now it's the first year that fundamentally actually fundamentals digital assets protocol businesses with fundamentals actually have a track record against Bitcoin, which we

actually think is quite a historic event in the history of this industry. If you've been here since the early days, um this is quite actually an insight. And that concludes my presentation. Thank you very much. If you would like to go to our uh revenue dashboard, you can scan the QR code here. Uh it's live data. Uh we do pride ourselves in providing actually the most robust on-chain data. It's a lot of work you need to do on cleaning it up. Um and it's all for free on our website um for you to enjoy. Thank you.