Crypto is facing an identity crisis—but it’s not the first time

Last night’s snoozer of a Super Bowl put on an embarrassing performance, and I’m not talking about the Patriots’ no-show offense. It came in the fourth quarter when a wide receiver for the Pats picked off a spectator racing across the field—one whose body was painted with what looked like ads for a sketchy crypto site. Coming on the heels of one of the worst sales in memory, this is the last thing the industry needs: a shirtless moron using the big game to remind everyone what they don’t like about crypto.

The Super Bowl episode will provide more fodder for the haters, who are back in droves now that Bitcoin is plummeting. That includes progressive Democrats who post mocking tweets implying that they are still I don’t understand why bad politics to mock the millions of US voters who love and own crypto. The hater’s rank also includes FTThe indefatigable Jemima Kelly is back with another funny but bad faith find out why Bitcoin is going to zero.

These sentiments are par for the course during the crypto downturn. Even more remarkable is the number of voices from within crypto expressing anger or dismay at the state of the industry. Vitalik Buterin, for example, is publicly concerned about the state of the Ethereum ecosystem, while Wintermute founder Evgeny Gaevoy last week fired the industry for abandoning its former ideals in favor of a vacuous number-go-up fixation. Such sentiments are echoed by many others in Crypto Twitterwhere the vibes turn incredibly somber and self-reflective.

So what happened? A big part of this is that the prices are in the tank. But there is also concern about the lack of an obvious explanation for Why things go south. During last crypto winter, it was easy to point to the collapse of crypto conman Sam Bankman-Fried’s FTX empire and the ensuing regulatory onslaught as the cause of the industry’s woes. Likewise, previous downturns in 2014 and 2018 were associated with the catastrophic hack of the first major crypto exchange, Mt.

The lack of a clear reason for the recent difficulties in crypto has led to the assumption that the basic crypto narrative of decentralized money and technology is just a pretense, and that the whole thing is based on quick haste and hype. And indeed, there’s plenty of evidence to support this position—from pump-and-dump memecoins to the Trump family’s unwitting blockchains. non-stop crypto gristing. It’s hard not to be cynical.

Here’s the thing, though: Crypto has always been full of hucksters. As with every new technology, it attracts scammers and snake oil salesmen—and more so than usual because the tech in question is directly linked to money. Fortunately, many of these people drifted away during the downturns, leaving legitimate crypto players the opportunity to reclaim space for themselves and digest a lesson or two.

We are there now. While watching Bitcoin fall around 50% is no picnic for investors, it is far from the worst the sector suffered a downturn. Meanwhile, history also shows that each successive crypto collapse is less painful and longer than the previous one—which is why analysts at JPMorgan Chase foretold last week that Bitcoin will hit $266,000 in the long term. It also helps that, at this time, there is a large class of people holding Bitcoin through BlackRock’s ETF and showing no signs of selling. As a wag observed“Boomers have diamond hands.”

The current market valuation is likely to be far from over, but the crypto industry is here to stay. And, perhaps, when the industry takes off, you might learn more about the kind of companies it holds up as models. For this, luckThe upcoming Crypto 100 will be informed in part by a reputation survey that will ask a broad cross-section of industry leaders to anonymously rate their peers. The final rankings will fall in early April. Finally, please note that Fortune Crypto not for President’s Day but back to your inbox on Feb. 23.

Jeff John Roberts
[email protected]
@jeffjohnroberts

DECENTRALIZED NEWS

Investors are sent PayPal stock plunge after the company forecast negative growth. It also fired its CEO, who talked a big game about AI and blockchain—but never hit on a strategy to keep up with Apple Pay, Coinbase, Stripe et al. (luck)

Coinbase is the only crypto company this year that pays for a Super Bowl ad. The 60-second slot, which featured a Backstreet Boys’ sing-along, drew poor reviews compared to the company’s 2021 effort. (Adweek)

South Korea’s Bithumb has created a epic fat finger failedsending hundreds of users 2,000 Bitcoin-instead of 2,000 won-in a reward promotion. The screw-up resulted in Bitcoin briefly falling to $55,000 on the exchange (CoinDesk)

Newly released Epstein files includes emails between the convicted sex offender and Brock Pierce regarding an early investment in Coinbase. (luck)

Forensics company TRM Labs shrugged off crypto winter to announce a $70 million Series C round from Goldman Sachs and others that valued competitor Chainalysis at $1 billion. (luck)

TOP CHARACTER OF THE WEEK

Kyle Samani, a prominent early crypto investor, took the industry by surprise advertisement he left his VC firm Multicoin. Some at CT speculated that the move came after a clash with his cofounder, but Samani maintained that he was leaving to focus on other areas of technology.