The End of the End of Crypto

Trying to figure out whether crypto is here to stay isn’t as simple as tallying up the industry’s wins or losses. For a while there it genuinely seemed possible that the U.S. Securities and Exchange Commission (SEC) could wipe crypto off the map (maybe with the help of other government agencies).

Then again, there’s practically a cottage industry of people who’ve made it their business to count all the times Bitcoin or crypto supposedly died. And, as sure as we are the sun will rise tomorrow, Bitcoin will likely keep adding blocks to the chain. That’s induction, baby!

This is an excerpt from The Node newsletter, a daily roundup of the most pivotal crypto news on CoinDesk and beyond. You can subscribe to get the full newsletter here.

Without speaking out of step, it seems like the overall mood of the crypto scene has shifted. Last week the “Greed & Fear” index for measuring sentiment in bitcoin markets flipped bullish. Beginning with BlackRock’s surprising move into the realm of crypto exchange-traded funds (ETFs) and running through PayPal’s just-launched stablecoin, it seems like most of the major crypto news headlines are pointing a way forward.

Ripple Labs didn’t exactly win its long, long legal battle with the SEC, but the part it didn’t lose could be significant for token issuers going forward. Industry “villains” seem to be getting some comeuppance with Sam Bankman-Fried being thrown in the clink and the Three Arrows Capital jabronies getting sued.

So is the bottom in? That’s not really for me to say. But, now that the SEC has finally unloaded its worst against sector giants Binance and Coinbase, FedNow didn’t siphon off all interest in crypto and meaningful legislation has passed never-before-seen hurdles, it seems like the worst is over yet.

Sure, there are still many long term risks to crypto: proposed “custody rule” changes could put crypto into a hostage situation, CoinDesk’s semi-estranged parent Digital Currency Group’s bitcoin trust could unravel and quantum computers could one day break cryptography’s back. There’s likely plenty of tail risks and black swans and bitter ends ahead.

Just yesterday the New York Times published an article essentially calling the end of people who call the end of crypto. At this point, it seems clear enough now that Bitcoin is battle-tested, and, while governments may want to step up oversight of crypto, the real anarchic core to all of this is basically untouchable.

There is a technological force loose in the world that enables completely permissionless transactions and that inspires others to build and build and build, creating a functionally self-perpetuating loop.

Many in crypto have already started tuning out the newscycle. People buy and hold coins and are entirely unconcerned whether PayPal’s recent announcement that it will pause crypto services in the U.K. until 2024 or its just-announced tie-up with Ledger will mean more for market sentiment.

Crypto isn’t just playing the long game; it’s playing a game that may not have an end. But like all things that go up, prices and sentiment will likely crash again.