a16z Says Crypto’s Real Edge Lies in Controlling Capital Flows, Not Prices

a16z crypto research argues that the real battleground for crypto is not token prices, but who controls the ‘center of capital flows’—the point where value is created, transferred, and settled, and where fees and network effects compound. In a new analysis, the firm frames blockchains and network tokens as rare pieces of infrastructure designed to sit directly in the path of economic activity, positioning crypto’s long-term upside as structural rather than speculative.

The argument is based on a report published on June 10, 2026, by Jason Rosenthal. The report draws a historical parallel: the most durable businesses often did not win by making a better product, but by owning the rails that commerce runs on. Railroads monetized freight moving over tracks rather than locomotives themselves, while firms like Visa ($V) and large market makers built models where revenue scales with transaction volume because they operate at the heart of payment and order flow.

From that perspective, blockchains resemble network businesses by design. Transactions are recorded and settled on shared ledgers, and as participation grows, more developers, users, and complementary services cluster around the same infrastructure. a16z crypto research contends that crypto founders can capture parts of ‘network effects’ from day one—an advantage that traditional companies often spend years and heavy capital expenditures trying to build.

Network tokens, the report adds, can amplify these effects by aligning stakeholders—users, developers, suppliers, validators, and protocol operators—around a single objective: network growth. In well-designed systems, incentives and rewards are distributed in proportion to contribution, turning what platform companies typically manage through contracts and business development into something enforced at the protocol level. The result, in theory, is a flywheel where adoption strengthens security and liquidity, which in turn attracts more activity.

To illustrate why flow-centric businesses can be so powerful, the report points to financial market incumbents. Visa processed $15.7 trillion in payment volume in fiscal 2024 and generated $35.9 billion in net revenue, underscoring the economics of sitting in the middle of transactions at global scale. It also cites Jane Street’s $20.5 billion in net trading revenue last year—out-earning major banks such as Citigroup ($C) and Bank of America ($BAC) on the same metric—along with data indicating that the top five U.S. market makers handle 87% of payment-for-order-flow-related activity.

The common denominator is not predicting market direction; it is being positioned where every order or payment must pass. As volumes rise, revenue rises with them. Network effects reinforce the dynamic: more cardholders increase the value to merchants and vice versa, while deeper participation in order-flow markets tightens spreads and improves liquidity, making the network more attractive and harder to displace. In the report’s view, the combination of ‘capital flow’ plus ‘network effects’ creates one of the strongest forms of business defensibility.

Crypto’s opportunity, the analysis suggests, lies in challenging the persistence of high margins across legacy financial rails. Visa and Mastercard ($MA) still operate atop networks designed in the 1960s, with interchange fees commonly cited at 2–3%, while remittance costs can reach 6–9% depending on corridor and service. Prime brokers and custodians take a cut of securities activity, and even after the U.S. shift to T+1 settlement in 2024, capital can remain operationally idle overnight—creating structural costs that new infrastructure could potentially compress.

Rosenthal invokes Amazon founder Jeff Bezos’ maxim—“Your margin is my opportunity”—to argue that payments, custody, lending, FX, securitization, settlement execution, and market making represent a broad target set for crypto entrepreneurs. If costs fall and speed increases, the size of the overall market can expand, the report claims, pointing to the ways Stripe and Block have grown by simplifying payments. On this view, blockchain-based financial infrastructure could represent the next phase of competition over financial ‘plumbing’ rather than a narrow contest over speculative trading.

Stablecoins receive particular emphasis as a practical bridge between crypto infrastructure and real-world value movement. The report describes stablecoins as enabling money to move at ‘internet speed,’ with 24/7 settlement and end-to-end programmability—features that can support new business models on open rails where unit economics are more transparent. That framing positions stablecoins not as a side product of crypto markets, but as a core mechanism for rewiring payments and settlement globally.

The thesis extends beyond finance. a16z crypto research highlights other arenas where programmable networks could reorganize how value and resources move: computing and GPU marketplaces, memory chips, AI training data, energy, robotics, space, and critical materials such as rare earth metals. Industries with weaker entrenched infrastructure or fewer durable intermediaries may offer more room to build new flow-based networks from the ground up, the report argues.

Ultimately, the report proposes a set of founder-level questions: Are you positioned at the ‘center of flows’? If activity on your product increases tenfold, does revenue scale in tandem? And where, specifically, is the bottleneck extracting the largest margin in the target market? a16z crypto research concludes that crypto’s enduring opportunity is less about volatility-driven price discovery and more about capturing the infrastructure layer where global value movement is routed—suggesting the sector’s next chapter may be written in settlement, payments, and network design rather than charts alone.