A new investment thesis centered on ‘fat apps’ is emerging as a potential major market narrative, according to a recent analysis from Bitwise. The term refers to decentralized applications that capture significant value at the application layer rather than the underlying blockchain layer, potentially reshaping how investors evaluate crypto assets.
The market has already begun reflecting this shift, as evidenced by the relative performance of major Layer-1 blockchains against Bitcoin. Solana, Avalanche, and other prominent smart contract platforms have demonstrated sideways trading patterns when measured against Bitcoin’s performance, suggesting capital may be flowing toward application-layer opportunities rather than base-layer protocols.
This performance divergence indicates investors might be reevaluating traditional blockchain investment strategies that prioritized layer-1 tokens. Instead, attention appears to be shifting toward applications that deliver robust utility, capture meaningful fees, and demonstrate sustainable economic models regardless of their underlying infrastructure.
The emerging fat apps thesis suggests that in the next evolutionary phase of crypto markets, value accumulation may occur increasingly at the application level rather than the protocol level. This could fundamentally alter investment approaches and valuation methodologies across the digital asset landscape as the market continues to mature and differentiate between infrastructure and application investments.
