Arca: Four Investment Directions for Crypto Assets

Author: Jeff Dorman, Chief Investment Officer of Arca;

Compiled by: Shaw, Golden Finance

For years, one of the biggest challenges faced by digital asset investors has been figuring out what assets to allocate. There are thousands of cryptocurrencies, hundreds of blockchain protocols, and dozens of listed companies, with seemingly endless new projects launching every week. Despite the multitude of choices, the number of truly attractive investment targets has historically been very small and continues to shrink.

This year, we have written extensively about how this situation is finally changing. Continuous improvement in fundamentals, optimization of token economic models, and clearer regulatory frameworks, combined with the influx of institutional capital, are driving digital assets from a market purely dominated by speculation to one where investors can apply traditional fundamental analysis frameworks.

While the entire crypto market is still searching for its identity, we believe that investment opportunities are becoming increasingly clear. In fact, we believe that the crypto assets worth allocating to right now can be primarily divided into four categories.

1. Stocks of Listed Companies - Investing in Firms Building Industry Infrastructure

The first category is the most straightforward: stocks.

Although the digital asset space is complex, investing in the equity of a quality company is not. Companies generate revenue, manage expenses, and allocate capital, with the potential for long-term profit and free cash flow growth. Shareholders have a legal claim to the residual value of the company, and when the company's value increases, the value of the equity typically rises in tandem.

Unfortunately, the number of quality crypto-listed companies remains limited. Frankly, there are very few quality private companies worth investing in as well.

We continue to be optimistic about companies like Galaxy Digital (GLXY) and Securitize (SECZ), which allow investors to position themselves in the fastest-growing segments of the digital asset ecosystem. Galaxy covers institutional trading, asset management, and the rapidly expanding AI data center industry; Securitize stands to benefit from the major trend of traditional financial assets migrating to blockchain infrastructure, namely the tokenization of real-world assets (RWA).

The pool of investable targets will continue to expand. Kraken is expected to launch its IPO next year. We anticipate that if crypto IPOs no longer continue to break below their offering prices (referencing COIN, BTGO, GEMI, BLSH), many other quality crypto startups will eventually also enter the public market.

We have previously written extensively analyzing the trend of traditional financial institutions entering the digital asset space. As this integration process accelerates, investors will have more and more quality listed companies to participate in industry growth.

But stocks are just one way to capture industry growth.

2. Existing Tokens with Real Revenue and Quality Token Economic Models

The second category is what we have been writing about almost continuously this year: tokens that rely on mature businesses and can accumulate real economic value.

For much of the development of the crypto industry, the business success of blockchain protocols or projects has been severely disconnected from the performance of their tokens. A protocol or company can generate hundreds of millions in revenue, attract millions of users, and become an indispensable part of the digital asset ecosystem, but token holders receive, at most, meaningless governance rights (e.g., LINK, XRP).

This mechanism is inherently unreasonable.

As we have repeatedly discussed, this issue largely stems from self-inflicted wounds: misleading legal advice, poor token architecture design, and a previous regulatory environment that did not encourage projects to create tokens with economic value. Fortunately, the situation is changing.

As we have mentioned countless times, several companies and protocols have demonstrated that tokens can have real economic value through mechanisms such as revenue buybacks, staking rights, and fee dividends. These projects no longer simply tell stories or paint visions of the future of blockchain; they operate real businesses, generate actual revenue, and continuously build mechanisms that allow token holders to share in the business growth dividends.

The core logic is simple: if a protocol's revenue continues to grow, its market share expands, and it returns economic value to token holders, investors finally have tangible entities to conduct due diligence on.

However, compared to projects that have already successfully implemented this model, what is even more exciting are new projects developed from the outset following these principles.

3. Newly Issued Tokens with Compliant and Well-Designed Underlying Structures

For many years, the routine for token issuance has been highly rigid: raising funds from venture capital, issuing tokens with questionable utility, releasing a small portion of the circulating supply to the public, hoping to drive up the token price through speculation before insiders unlock and sell.

This model is very unfriendly to secondary market investors, and unsurprisingly, the vast majority of such tokens ultimately perform poorly. The listing of these doomed new tokens on exchanges like Binance and Coinbase constitutes collusion, which is also a significant reason why many retail investors permanently leave the crypto market.

But a new generation of projects is taking a different path. They no longer treat tokens as an afterthought or a financing tool; instead, they deeply embed tokens into the economic system of the business from the project's design phase.

Venice AI ($VVV) is an interesting case. Venice provides privacy-oriented AI services, allowing businesses and individuals to access top AI models without having to share personal data with centralized platforms. The most striking aspect of this project is its token design: users who stake VVV can proportionally gain access to Venice's AI inference computing power, creating a natural linkage between business demand and token demand. Venice has also introduced a revenue buyback and burn mechanism, further binding business operations to the earnings of token holders. As demand for privacy AI inference increases, the economic value corresponding to access to computing power will also rise. Of course, this does not mean that VVV's current valuation is attractive for investment, but at least you can evaluate it seriously and make value judgments based on fundamentals, and it does not need to adopt traditional stock dividend models to create economic value.

The key point is that: VVV and similar tokens have real significance beyond speculation. Whether Venice ultimately succeeds is still unknown, but this is precisely the kind of innovation we expect from the new generation of digital asset issuers.

4. Established Tokens with Quality Businesses and Opportunities to Restructure Economic Models

The fourth category may be the most overlooked investment opportunity in the current crypto market. Ironically, we have been writing about this direction for over six years.

As early as July 2020, we pointed out that one of the most attractive aspects of token investment is the flexibility of token architecture. Unlike traditional securities, token issuers can continuously modify token economic rules, add features, and design better incentive mechanisms for token holders. In April 2025, we reiterated this point: token economics and application scenarios can iterate throughout the asset's lifecycle.

This is one of the most underestimated characteristics of digital assets: token economics is not static.

A poorly designed token from 5 or 10 years ago may not always be a bad investment. The token release schedule can be adjusted, buyback mechanisms can be added, revenue sharing can be implemented, and new application scenarios can be developed. Of course, such changes require the determination of the project team, community consensus, and appropriate legal frameworks, but there is room for adjustment on the technical level.

**This has created an extremely attractive investment opportunity: finding projects that have established businesses but whose tokens have been abandoned by the market, yet whose token economic systems can be completely restructured.

Take the Brave browser and its native token BAT (Basic Attention Token) as an example.

Brave has over 120 million users and is reportedly among the top 50 websites globally in terms of traffic, alongside Telegram, eBay, Discord, and GitHub. From any metric, Brave has created a very successful consumer-facing product.

However, for nearly a decade, BAT has been virtually worthless as an investment target, and this assessment is already quite generous.

The issue does not lie with the underlying business itself. Rather, BAT's economic value created by business growth is almost decoupled. Even as Brave continues to attract users, iterate products, and expand its ecosystem, it does not generate significant new demand for BAT.

But this situation is finally poised for change.

In July, Brave released the BAT 4.0 roadmap, launching a series of initiatives to deeply integrate BAT into the Brave ecosystem. These include a stablecoin-based Brave rewards card, an integrated wallet bridging traditional payments and cryptocurrencies, expanding payment infrastructure through BravePay, and new application scenarios related to AI and digital commerce. Most importantly, Brave plans to use a portion of the net income generated from wallet services, payments, and other products to buy back BAT, with the repurchased tokens used to incentivize users, creators, and ecosystem development.

Reports indicate that this new rewards card has garnered over 200,000 registrations on its waiting list within just two months, demonstrating significant early interest in the new product. Meanwhile, the BAT token has been fully diluted, and investors no longer need to worry about the token unlock selling pressure in subsequent plans.

Let's understand the implications behind this.

Brave has completed its most challenging step. It has created a product used by hundreds of millions, established a global brand, laid out distribution channels, and built an ecosystem used daily by millions.

But until recently, investors had almost no reason to hold BAT. Now, Brave is attempting to bind the success or failure of its business to the token economics.

Of course, the reform may not succeed. Buying back tokens and redistributing them to users does not equate to permanently reducing circulating supply like a stock buyback. Whether the new payment products will succeed remains to be seen.

But it is precisely this point that creates this opportunity.

Investors have the chance to buy tokens at valuations reflecting years of poor token models, rather than pricing them based on the underlying business's potential economic value. BAT is unlikely to be the only case.

Many crypto projects have spent years developing real products, accumulating users, and generating revenue, yet their tokens have continued to perform poorly. Some projects have thriving businesses, while their token values have nearly gone to zero. In addition, there are many successful companies in non-crypto sectors that could see their performance improve significantly if they introduced token mechanisms (e.g., Netflix, Disney, Spotify, Nike, and other consumer-facing brands).

For many years, it was reasonable for investors to avoid such assets because token holders could not share in the underlying business's profits. But what will happen when this revenue distribution mechanism finally materializes? What will happen when a token that has been ignored by investors for five years suddenly possesses real economic value?

The potential for a revaluation of asset value could be enormous.

Outlook: Investment Opportunities Are Becoming Increasingly Clear

During most of the development stages of the crypto industry, investing in digital assets meant that investors had to set aside the fundamental criteria commonly used in other markets. Worse still, most ordinary observers were misled into believing that the crypto market could not engage in fundamental investing at all.

Revenue did not matter, profits did not matter, and valuations were mostly meaningless; the success or failure of projects was often unrelated to token prices.

All of this is finally changing.

Today, investors have four increasingly quality ways to participate in the growth of the digital asset industry (with industry growth concentrated in three main areas: stablecoins/payments, DeFi, and RWA real asset tokenization). Investors can choose to invest in quality company equities; mature tokens with revenue growth and value capture capabilities; new project tokens designed around sustainable economic utility from the outset; or find solid businesses with established tokens that are likely to undergo economic mechanism restructuring.

These four types of opportunities differ significantly, but they share a common characteristic: when the underlying business or network continues to grow, the assets themselves have identifiable economic logic supporting their appreciation.

And the fourth category also reminds us why we have always believed that tokens possess unique advantages over traditional securities. The foundational ownership of equity is relatively fixed, but the economic design of tokens can undergo significant iterations throughout their lifecycle.

This flexibility has been abused in the past. But now, more and more cases are utilizing it to create real economic value. Six years ago, we proposed that this flexibility would become one of the most important characteristics of digital asset investment.

The time to realization has been longer than we anticipated, but we may be witnessing this argument becoming a reality.

The next quality investment target in the crypto space may not be a new company or a newly issued token. It could be attached to a mature business, simply because this established token has finally found a way to reward investors.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.