Jeff Dorman, Chief Investment Officer (CIO) of crypto asset management company Arca, argued in a comprehensive assessment that Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and $XRP are among the key factors limiting the overall performance of the crypto market.
According to Dorman, while adoption of crypto and blockchain technologies is rapidly increasing, the fact that this growth is not reflected in prices to the same extent points to a notable divergence in the sector.
Dorman noted that digital assets have shown relatively strong performance against gold, stocks, and bonds in the past week. He stated that Bitcoin has been particularly supported by institutional demand and ETF inflows, and that Ethereum’s outperforming Bitcoin has boosted short-term optimism. However, he added that while the double-digit increases seen in projects like Hyperliquid (HYPE) and Bittensor (TAO) are noteworthy, these movements remain limited given the historical volatility of the crypto market.
Dorman noted that while adoption in the cryptocurrency ecosystem is increasing at a record pace, this growth isn’t sufficiently reflected in token prices. He explained that this could be partly due to prices lagging behind developments, and partly because much of the adoption doesn’t directly translate into value for token holders. According to the analyst, the main problem is that some cryptocurrencies, among the largest assets by market capitalization, fail to offer a strong and sustainable investment thesis.
Addressing Bitcoin specifically, Dorman argued that the asset has lost many of the trends it was built upon over the years. He stated that Bitcoin no longer behaves like “digital gold,” its inflation hedging function has weakened, and it lags behind stablecoins as a means of payment. He also noted that the impact of the 21 million supply limit has diminished with the rise of derivative products. While acknowledging that Bitcoin has become a more regulated asset, Dorman argued that it still lacks a strong narrative to support long-term value appreciation.
Dorman, who also leveled similar criticisms against Ethereum and Solana, argued that while these two networks are technically successful Layer-1 projects, they fall short in directly delivering value to token holders. High inflation rates, the increasing commodification of block space, and weak value capture mechanisms are among the main criticisms. According to Dorman, these networks need to achieve much larger-scale adoption to justify their current valuations.
Dorman took a harsher tone regarding $XRP, arguing that there is no meaningful connection between the token and the Ripple company. He stated that $XRP has limited use cases and that the token economy is not investor-friendly, adding that Ripple’s regular sales put pressure on the market.
In his overall assessment, Dorman argued that the crypto sector’s reliance heavily on these four assets hinders healthy market growth. He stated that this situation has transformed the market into one dominated by short-term traders, leaving little room for long-term and fundamentally focused investors.
According to Dorman, the real growth in the crypto ecosystem is happening in areas such as stablecoins and payment systems, decentralized finance (DeFi), and the tokenization of real-world assets (RWA). However, Dorman stated that this growth doesn’t directly add value to major crypto assets, and that if the sector shifts its focus to these areas, prices could become more aligned with adoption.
