The Unit Economics Revolution: Why Computing Power and Elastic Pricing Define 2026 Crypto Investing

The 2025 crypto market delivered a harsh lesson: narratives are dead, and computing power is king. But what truly separates winners from losers isn’t just the ownership of infrastructure—it’s something more fundamental in economics: the definition of how value gets captured through mandatory fee mechanisms that exhibit unit elastic characteristics.

For decades, venture capitalists and crypto evangelists sold a story about decentralized protocols and collaborative networks that would automatically capture value as adoption grew. That story collapsed in 2025. The market rewarded only one thing: companies and assets that control the economic bottlenecks machines cannot bypass. Meanwhile, tokenized networks largely failed to translate usage into economics that resembled anything close to viable.

The Mandatory Fee Mechanism: Why Token Economics Failed Unit Elastic Tests in 2025

The past year was brutally difficult for long-term crypto investors, with one major exception: Bitcoin. For everyone else holding altcoins and tokens, 2025 delivered a masterclass in market structure failure. The deleveraging cascade on October 10th exposed a fundamental problem that traders and investment bankers successfully ignored through record commissions and new product launches. But for anyone with a multi-year investment horizon, the cracks in crypto’s foundation became impossible to miss.

The core issue centers on what economists call pricing elasticity—the relationship between fees and usage. In traditional markets, when services become essential (like electricity or cloud computing), demand remains relatively constant even when prices rise. Economists define this phenomenon as exhibiting unit elastic or inelastic demand. Crypto protocols, by contrast, built economic models that assumed optional adoption. When Chainlink, Bittensor, Giza, and similar decentralized networks tried to monetize activity through token mechanisms, they faced the opposite dynamic: usage surged but value capture collapsed. The market no longer rewards collaborative narratives without true economic defense mechanisms.

A prisoner’s dilemma trapped token holders across the ecosystem. Investors anticipated future selling pressure from team unlocks and dilutive issuance, so they sold preemptively. Market makers focused solely on short-term volatility, not protocol economics. The correlation between all crypto assets compressed toward 1.0—a clear signal that idiosyncratic value propositions had collapsed into pure leverage cascades.

This structural failure isn’t a temporary market correction. Token economists now understand: protocols lacking mandatory fee structures—meaning fees that machines or users cannot easily bypass—will struggle to build defensible economics. Those exhibiting more elastic or optional characteristics will face persistent downward pressure on token valuations.

Infrastructure Economics: Computing Power as the Defining Bottleneck

Meanwhile, the market rewarded one clear group of winners: companies controlling the bottlenecks in the machine economy. These weren’t optional infrastructure plays—they were mandatory.

The data tells the story. NVIDIA, TSMC, Micron, and similar semiconductor manufacturers posted exceptional returns in 2025. Bloom Energy and IREN, which directly monetize the AI boom’s electricity hunger, delivered outstanding performance. These companies succeeded because they control something machines must purchase continuously and cannot effectively negotiate away: power, silicon, and compute density.

In stark contrast, generalist infrastructure companies like Equinix underperformed. Their capacity is fungible and competitive. General-purpose computing power has limited scarcity value, while customized, high-density solutions command premium economics. This definition of infrastructure value—specificity and non-fungibility—emerged as the 2025 investment principle.

Software companies exhibited a similar screening mechanism. Enterprise platforms with mandatory embedded workflows (Alphabet, Meta) continued compound growth despite AI disruption. Services with optional positioning (ServiceNow, Datadog, Elastic) faced valuation pressure and margin compression. Elastic’s decline is instructive: strong technical team, but squeezed by cloud-native alternatives and deteriorating unit economics.

Defining Value Capture in the Machine Economy: Where Elastic Economics Matter Most

The clearest lesson from 2025 involves the definition of value in an economy increasingly driven by machines rather than humans. Value concentrates where machines already spend money—and where they have no economic alternatives.

This concentrates across three categories:

Machine Transaction Infrastructure: OpenAI and Anthropic experienced rapid revenue growth by providing AI services, yet face margin compression and capital intensity challenges. Scale AI demonstrated how quickly trust erodes when neutrality is compromised. Its acquisition by Meta destroyed its “independent” positioning and triggered customer defection. This illustrates why transaction-layer positioning requires alignment with machine incentives, not just human narratives.

Applied Infrastructure with Recurring Expenses: Companies like Applied Intuition, Anduril, and Samsara control deeper integration points into customer operations. They own budget allocation precisely because they exhibit unit elastic demand characteristics—customers cannot easily reduce spending without degrading operations.

Physical Bottlenecks: Electricity, silicon, and computing contracts continue commanding premium valuations because their economics are inherently inelastic. Machines require them at specific densities and qualities.

Tokenized networks have struggled across nearly every dimension except Chainlink, which remains strategically important despite tokenomics challenges. Bittensor represents crypto’s largest bet on AI-native economics, yet poses no material threat to centralized Web2 labs. Agents and automation protocols (Giza, and others) generate real activity but remain hampered by dilutive token issuance and inadequate fee mechanisms.

The 2025 outcome was definitive: the market no longer rewards “collaborative ideals” without mandatory, defensible fee structures. Value migrates to assets already generating economics that machines directly fund—power bills, silicon contracts, cloud subscriptions, and regulated financial services—rather than aspirational protocols awaiting hypothetical future adoption.

Positioning for Unit-Elastic Returns: The 2026 Investment Thesis

The venture capital perspective shifted dramatically. Previously, the allocation split 40% tokens / 40% equity / 20% opportunistic. Looking ahead, that shifts substantially toward equity until structural token market problems resolve—an estimated 12-24 month process.

This repositioning targets three downstream spending channels where economic power already exists and machines are already paying:

First: Machine Transaction Surfaces—payment layers, metering, billing, settlement, and orchestration primitives for machines and their human operators. Portfolio companies Walapay and Nevermined exemplify this positioning. Rewards flow from transaction volume, acquisition economics, or regulatory status rather than speculative adoption curves.

Second: Applied Infrastructure with Existing Budgets—computing power aggregation and optimization, data services embedded in operational workflows, and tools with recurring enterprise expenses and switching costs. Companies like Yotta Labs and Exabits represent this category.

Third: High-Novelty Asymmetric Bets—basic research, cutting-edge science, and AI-related platforms with undefined timelines but potentially outsized returns. The recent investment in Netholabs (mapping complete digital mouse brain architecture) reflects this thesis.

The core principle remains positioning quality above all else. Successful investing in this environment means betting on assets that control economic power—whether through necessity or scarcity—rather than backing narratives about eventual adoption.

The Reality Check: Winners and Losers Coexist

The tightrope of 2026 involves accepting two truths simultaneously: hundreds of companies already generate $100 million+ in annual revenue through legitimate machine-economy services. Simultaneously, the market remains riddled with false narratives and outright scams. Both observations are accurate.

Massive capital flows from technology giants now direct toward energy companies and semiconductor suppliers rather than software. A handful of companies will emerge as multi-trillion dollar winners, many of which deliberately remain private to avoid regulatory scrutiny of their exit vehicles.

Meanwhile, political and industrial power increasingly centralizes around these infrastructure assets—whether through figures like Musk and Trump in the West, or China’s DeepSeek and manufacturing advantage in the East. Decentralized Web3 alternatives continue struggling to compete at the infrastructure layer where economic bottlenecks actually matter.

The 2026 landscape favors investors who understand this definition clearly: economic power flows to assets machines cannot bypass, whether through necessity, scarcity, or regulatory mandate. Positioning quality—understanding exactly where economic activity concentrates and which assets control it—determines the outcome far more than narrative appeal or technology hype.

The machine economy has arrived. Those who recognized that computing power and mandatory economics (not tokens and stories) drive returns are already positioned for 2026. Everyone else is positioning now.