Since cryptocurrencies became popular, many have debated whether they form a bubble. There was quickly a sharp rise in crypto prices, with some people claiming it was just a fad and would eventually crash like all the other bubbles before them. However, after numerous adjustments to price, many crypto assets continue to live and grow in their usage in the global financial ecosystem. This leads us to ask an important question: If crypto were indeed a bubble then how could the core crypto assets still exist today?
This article provides a detailed look at the notion of "core assets" within the cryptocurrency spectrum, explains how they manage to endure various cycles of market behaviour, and explains how to differentiate core assets with long-term potential value from short-term trends/hype around various cryptocurrencies. Whether you are new to cryptocurrency or are already familiar with blockchain, this guide will provide you with reference material, context, and practical advice to assist you in your exploration of this technology.
Understanding the Idea of a Crypto Bubble
The asset price rise far beyond the true value is characteristic of a Financial Bubble, which is usually created from speculation, rather than based on actual financial indicators. Once the confidence level drops, the asset prices will plummet to a level that will often create significant financial loss for the individual and/or the market.
The behaviour of Crypto Markets is generically equivalent to "bubble" behaviour based on similar types of market activity. These behaviours have happened repeatedly within Crypto Markets historically:
Media induced rapid price appreciation
Retail investor influx pursuing profits quickly
Market price corrections based on regulatory events and/or macroeconomic conditions
Due to these historical characteristics of Crypto Markets, many consider these markets "Crypto Bubble" Markets, which is an oversimplified view of the Digital Asset Ecosystem and does not acknowledge the complexity and constantly changing nature of these markets.
What Are “Core Assets” in Crypto?
Core Assets in cryptocurrency are projects that meet the criteria of being sustainable, have a functioning community and provide ongoing development. These projects have shown themselves to be useful in the long-term by exhibiting characteristics such as being viable in the market place and being around after market corrections. The project may be created solely for the purpose of speculation.
Examples of core crypto assets:
Core Assets are likely to have the following characteristics:
A real-world application, i.e., Payments, Smart Contracts, Infrastructure
A secure decentralised network that has been tested and has proven reliable
There is a high degree of liquidity and widespread adoption between exchanges, financial institutions and end-users.
Core Assets can be considered both Bitcoin and Ethereum as examples but can also include other projects that exhibit the same characteristics of resilience and usefulness.
Why Core Assets Persist Through Market Cycles
Crypto markets are cyclical. Periods of rapid growth are followed by corrections or prolonged bear markets. While many speculative projects disappear during downturns, core assets tend to remain.
Here’s why:
Strong fundamentals: Core assets are built on solid technology and clear value propositions
Network effects: The more people use a blockchain, the harder it is to replace
Institutional interest: Long-term investors and institutions usually focus on established assets
Continuous development: Updates, upgrades, and scaling solutions keep these assets relevant
Each market cycle removes weaker projects, leaving behind a more mature and robust ecosystem.
The Role of Technology and Use Cases
At its core, crypto is powered by blockchain technology. The persistence of core assets is closely tied to their technological relevance.
Key areas where core assets provide value include:
Digital payments and store of value
Smart contracts and decentralized applications
Decentralized finance (DeFi)
Cross-border transactions and settlements
As these use cases expand, the demand for reliable and secure blockchain networks increases, reinforcing the position of core assets even during market downturns.
Regulation and Market Maturity
Another factor influencing persistence is regulation. While regulatory uncertainty often triggers short-term price drops, clearer rules can strengthen the ecosystem over time.
As markets mature:
Fraudulent and low-quality projects are filtered out
Investor protection improves
Institutional participation increases
Trust in core assets grows
This process may feel disruptive, but it contributes to long-term stability rather than collapse.
The Lindy Effect in the Crypto Bubble
In the middle of repeated boom-and-bust cycles, the Lindy Effect offers an interesting way to evaluate crypto assets. The Lindy Effect suggests that the longer a non-perishable technology or idea survives, the longer it is likely to continue existing in the future. Applied to the crypto bubble narrative, this means that while many short-lived tokens disappear after hype-driven bubbles burst, long-standing networks like Bitcoin and Ethereum gain credibility simply by surviving multiple market cycles.
Each bubble and crash acts as a stress test, filtering out weaker projects and reinforcing the staying power of those that continue to function, attract users, and maintain security over time. Rather than proving crypto’s failure, repeated bubbles may actually strengthen assets that exhibit Lindy characteristics.
Is the Crypto Bubble a Myth or a Phase?
Rather than a single bubble, crypto may be better understood as a series of speculative waves layered on top of a foundational technology. Hype-driven excesses come and go, but the underlying infrastructure continues to develop.
In this sense, the Crypto Bubble does not mean the end of crypto itself. It reflects growing pains in an emerging asset class. Core assets persist because they solve real problems and adapt to changing conditions.
How Investors Can Identify Core Assets
For those navigating the crypto space, focusing on fundamentals is key. Some practical indicators include:
Longevity of the project across multiple market cycles
Transparency of the development team and roadmap
Real-world adoption and partnerships
Security track record and decentralization
Avoiding decisions based solely on price movements can help separate lasting value from temporary excitement.
Looking Ahead: Evolution, Not Extinction
Crypto is still in a relatively early stage of development. Just as the internet experienced bubbles before becoming essential infrastructure, blockchain technology may follow a similar path.
Core assets are likely to:
Play a role in future financial systems
Integrate with traditional institutions
Support new digital economies and services
Market volatility will continue, but persistence suggests evolution rather than disappearance.
Frequently Asked Questions (FAQs)
Q1. Does the existence of a Crypto Bubble mean crypto will fail?
No. A bubble indicates speculative excess, not the failure of the underlying technology. Core assets often survive and strengthen after market corrections.
Q2. What makes a crypto asset “core”?
Core assets typically have strong fundamentals, real-world use cases, active development, and long-term adoption.
Q3. Can new projects become core assets over time?
Yes. Some newer projects may evolve into core assets if they demonstrate utility, resilience, and sustained growth.
Q4. Is volatility a sign that crypto is unreliable?
Volatility is common in emerging markets. Over time, as adoption increases, volatility may reduce for established assets.
Q5. Should beginners avoid crypto due to bubble risks?
Beginners should focus on education, fundamentals, and risk management rather than avoiding the space entirely.
Conclusion
The persistence of core assets challenges the simplistic idea that crypto is merely a passing fad or a single Crypto Bubble. While speculation will always exist, it is the projects with real value, strong networks, and continuous innovation that endure. Understanding this distinction allows investors and observers alike to see crypto not as a fragile bubble, but as an evolving ecosystem where core assets persist through change.
