Stocks Are Overvalued. Cryptocurrencies Are Cheap, and Are Stacking Revenue. Is Now a Good Time to Buy?

The S&P 500 has never stayed cheap for long. But, at a cyclically adjusted Shiller price-to-earnings (P/E) multiple of 40.6, it's in valuation territory that it has reached only once before -- right before the dot-com bubble's catastrophic collapse. Its price-to-sales (P/S) multiple of 3.7 is also at a record high, which isn't very comforting at all. Everyone wants to own stocks, so they're pricey. And, as crypto is disfavored, revenue-generating coins like Ethereum (ETH -0.49%), Solana (SOL -0.34%), and Hyperliquid (HYPE -0.86%) are seeing their financial fundamentals continue to improve while their coin prices remain fairly cheap. Does that mean now is a good time to load up? Image source: Getty Images. The valuation gap has widened Wall Street valuations are far above their long-running norms. So for investors thinking about buying hot and volatile equities like artificial intelligence stocks or semiconductor stocks, those high valuations are enough to make them queasy because they imply that a slowdown in growth could lead to big declines in share prices. Expectations for performance have become very high. Today's Change(-0.49%) $-9.28Current Price$1,867.98 Revenue-generating cryptocurrencies are moving the opposite way, perhaps due to the very idea of crypto assets with real (and favorable) fundamentals being so new. Prices have struggled or fallen over the last 12 months, while over the last three years, top lines have climbed in fits and starts. Take a look at this table: AssetMarket CapQ2 2026 Protocol Revenue Q2 2023 Protocol Revenue TTM Price PerformanceEthereum $255 billion$187 million$107 million(50%)Solana $42 billion$264 million$897,514(58%)Hyperliquid $12 billion$149 millionNot launched yet31% Chart compiled by author; data from DeFiLlama. TTM = trailing 12 months. As you can see, while those assets could still be overvalued, for Ethereum and Solana, it's hard to believe, given that their prices have been falling so much since October 2025 while their quarterly revenue has risen so quickly. Timing is less important than value accrual So based on their valuations, it probably is a good time to consider buying the crypto majors. But simply buying an asset that has some kind of protocol revenue because it's cheap isn't a good idea. The thing to look for is an asset that generates revenue that subsequently routes some of the value to holders -- and the way that value gets routed isn't a trivial consideration. Today's Change(-0.34%) $-0.25Current Price$72.90 For instance, Ethereum's transaction fees, part of which get burned, mean that holding Ether is equivalent to holding a claim on the value generated by its network activity. However, most of the surplus flows to apps, layer-2 chains, and roll-ups -- and to stakers rather than holders. And, because new supply is minted constantly (directly opposing the fee burns), at the network's normal levels of activity, holders have actually seen their value diluted slightly with each passing year. Hyperliquid, in contrast, offers a much tighter linkage between network activity and returning value to holders. It returns between 97% and 99% of its fees, depending on how they were incurred, into continuous open-market purchases of its token, HYPE. The buyback mechanism has spent more than $1.3 billion repurchasing the token, and its current run rate implies procuring about 7% of Hyperliquid's market cap over 12 months. That's an impressively high rate of value transfer that most stocks would be embarrassed by. Today's Change(-0.86%) $-0.45Current Price$52.33 Solana, on the other hand, burns 50% of its base fee but none of its priority fees, and priority fees dominate what users actually pay. The upshot, per data from the crypto analyst Blockworks, is that only 1.1% of the coin's new issuance was offset by fee burns in June. So it isn't exactly ideal for holders. Still, the presence of overvalued stocks and out-of-favor cryptos posting rising revenue, even if their value capture is imperfect, is a setup that most value investors would immediately recognize as lucrative. That doesn't mean you should stop investing in stocks to chase crypto, but it could be a smart idea to allocate a bit more than usual while the sector is cheap.