Welcome to the institutional newsletter, Crypto Long & Short. This week:
* Insights on DeFi sector growth in 2026 by Martin Gaspar of FalconX
* Top headlines institutions should read by Francisco Memoria
* Analysis on investor sentiment from the relentless sell-off by Andy Baehr
* “Altcoins vs BTC performance” in Chart of the Week
-Alexandra Levis
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Expert Insights
The Striking Dichotomy in DeFi Tokens Post 10/10
– By Martin Gaspar, senior crypto research associate, FalconX
The October 10th crash continues to reverberate in the crypto market with broader softness across sectors. It’s especially notable in DeFi, the lifeblood of on-chain activity today, and the one sector that generates the majority of crypto token revenue.
Let’s take a quick glimpse of where we are. Of a subsect of 23 leading DeFi names across the decentralized exchange (DEX), lending and yield verticals, only 2 are positive YTD as of November 20, 2025. QTD, the group is -37% on average, highlighting the damage this extended selloff has done. But the mixed price action reveals some nuances.
1) Investors seem to be opting for safer (‘buyback’) names or allocating to names with fundamental catalysts. On the buyback side, names like HYPE (-16% QTD) and CAKE (-12%) posted some of the best returns for larger market cap names in the cohort, indicating investors may be allocating to them or that their price has been supported by their substantial buybacks. Meanwhile, MORPHO (-1%) and SYRUP (-13%) both outperformed their lending peers on idiosyncratic catalysts, such as minimal impact from the Stream finance collapse or seeing growth elsewhere.
2) Certain DeFi subsectors have become more expensive, while some have cheapened relative to Sept 30, underscoring the changing landscape post the October 10 crash. Spot and Perp DEXes have seen declining P/S multiples as their price has declined faster than protocol activity. In fact, some DEXes such as CRV, RUNE and CAKE have posted greater 30D fees as of Nov 20 compared to Sep 30. We’re seeing similar trends across perp DEXes with HYPE and DYDX multiples compressing faster than declines in their fee generation.
3) Lending and yield names have broadly steepened on a multiples basis, as price has declined considerably less than fees. For example, KMNO’s market cap fell 13% over this period, while fees declined 34%, according to data from Artemis. Another factor may be that investors are crowding lending names in the selloff, considering lending and yield-related activity is often seen as stickier than trading activity in a downturn. Lending activity may even pick up as investors exit to stablecoins and seek yield opportunities.
