Existentialism in Crypto
What has been will be again, what has been done will be done again
I drew inspiration to verbalise my interpretation of crypto’s demoralisation & structural weakness through Thiccy’s piece “dealing with loss” & Dougie’s piece “crypto is dead”.
“Losing money is what kills you. It’s not the actual loss. It’s the fact it messes up your psychology. You lose the bullets in your gun. Then the elephant walks by when your gun’s not loaded. In this game, you want to be there when the great trades come along.”
- Brett N. Steenbarger
It is an undeniable truth that most reap what they truly seek from markets.
Capitulation remains a habitual phenomenon. It serves as part of a natural cleanse we experience each cycle, as we begin to contemplate what follows.
Beginning to question crypto’s positioning as a category in its lifecycle -attempting to uncover the remaining foundations we have to show after years of inflated promises, manic belief, emotional rollercoasters & unrealised expectations.
Does crypto possess the underlying qualities to confidently belong on a pedestal alongside established & mature markets? Or are we eternally doomed to remain a capital black hole intrinsically driven by speculative value & gambling seeking an escape hatch from financial mediocrity?
I am well aware of my excessive cynicism, yet I only allude to our collective past failures in an attempt to articulate my vision for crypto’s continuity.
Participants are quick to draw analogies with the Dotcom crash, refer to the Gartner cycle, in an attempt to pinpoint our shortcomings & express potential optimism for the future.
Some reluctantly surrender to the urge of pointing fingers, looking for scapegoats. Falling to the extent of calling out accounts rocking NFTs on their Twitter (while conveniently turning a blind eye to NFTs in their portfolio) or disregarding their personal venture bags in L1s altogether when articulating their L1 doom thesis (a few characters immediately jump to mind, love Santiago, to be clear).
Everyone is entitled to an opinion, yet the extent of distress visible on the timeline, as well as in the orderbooks feel progressively worse, especially in light of the continued outperformance of other risk assets, while alt land continues looking ever gloomier.
The levels of coping are truly a miserable sight to witness.
“I miss 2021”
“Crypto is dead”
“I wasted my last 8 years in crypto”
As dismissive & unempathetic as I may come off, operating under this frame is fundamentally flawed. It will be more about revanche than echoes - it always is.
The early discoverers of the land of magical internet coins have succumbed to the curse of being early. The right place at the right time enables a perfect setup & I sincerely hope those participants fully capitalised on that blessing, as the current iteration is significantly more nuanced & the game is now on hard mode.
“Skill issues” exist & we all cave in to over-index on past success, often failing to objectively reflect on the holistic picture the board presents.
The collapse of FTX presents a compelling case to revisit. The crash & burn of the exchange had a salutary effect on the market - a catharsis that allowed us to look forward & leave many of the foul actors, along with the sins of the last cycle, behind us. While it may have felt like we were roadkill, it objectively presented a unique prospect to seek asymmetry & figure out how the next fortune reversal might shape up.
Fast forward to today: the feedback loops of the market have accelerated exponentially, & the industry as a whole has shown signs of attempting to escape the status quo. This should be a moment of salvation - to leave the tricks & games of the past behind, rendering them largely obsolete.
I loved the parallel Scimitar Capital made in his piece:
“In Greek mythology, Sisyphus is condemned to spend eternity pushing a boulder up a hill, only to watch it roll back down the moment he reaches the top. There is something uniquely cruel about this punishment, something that cuts directly to the core of the human experience that drives many to suicide.”
Trading shares this quality. Unlike other professions, no checkpoints exist. A single faulty or misguided decision can doom a flourishing career built on hundreds of wins.
The single adjustment I would make is applying this parallel to both drawdowns & periods of stellar success.
We tend to underemphasise when you win big. When do you really step away? Do you at all? As the goal post progressively moves further away, accolades are hit that were once meant to be the end line.
A symbiosis of greed & addiction. Cognitive biases, amplified by volatility, driven by the addictive nature of information & price movement. Volatility - so deeply ossified within our space. These biases stem from Prospect Theory, gluing us to the table when, in reality, it is often best to step away.
But if you are reading this, the journey likely continues. Markets like these are the greatest testament to & measure of one’s true love for the game.
In my eyes, the most meaningful question to ask yourself is: Do you still have Edge?
It is clear we are in a structural bear market for alts. Even now, with valuations down exponentially, I am unable to shake the thought that we remain detached from reality.
We had ETFs, DATs, so what is the real reason to believe now?
There is no marginal buyer for the majority of coins, & the industry has transitioned to become more PvP than ever before.
I find it highly impractical to position purely on hope - that the money printer will drive miracles or that mean reversion will save us. These forces remain outside our control.
The market remains horrendously inefficient, & fundamentals remain largely questionable across crypto.
What is worth backing? The continuous existentialism persists.
Surely, as an industry, we are more than DeFi, stablecoins, perp DEXs, & potentially prediction markets?
The never-ending debates surrounding infrastructure vs app layer. The “revenue meta” is an effort to distinguish vaporware from substance, holding protocols to the standard of Hyperliquid.
Inevitably, ideas require funding. Jeff set an example - fully backing his own ideas, bootstrapping in the early days of the protocol - something that remains largely unaffordable to replicate.
I know contrasting views have been expressed on the topic of venture allocators, & I remain far too biased, yet venture backing is an integral part of the emergence of genuinely novel ideas & teams.
“People don’t know what they want until you show it to them”
⁃ Steve Jobs
There is a kernel of truth embedded in that quote that feels especially uncomfortable for crypto today. We have spent years oscillating between dogma & reactionary verbiage - mistaking loud narratives for progress & even consensus for conviction.
Too often, we ask users what they want, only to mirror back incremental abstractions of what already exists elsewhere - cheaper, faster, more leveraged versions of yesterday’s ideas. That has never been how new categories are born.
If crypto is to stand on parity with other asset classes, it will not be by winning marginal efficiency contests or endlessly recycling the same constellation of beliefs around infrastructure, incentives, & reflexive growth.
It will require novel primitives, new mental models, & a willingness to step beyond what already “works”. Not everything that matters can be product tested, revenue-mapped, or justified in a simple deck. Some ideas only reveal their inevitability in hindsight - & that takes time.
This is where the industry must grow up. Less reverence for past cycles, less nostalgia for 2021, & more intellectual truth about what is structurally broken - & what remains possible to rebuild.
The path forward is unlikely to look familiar, & it certainly won’t be obvious at the moment it matters most.
Yet, despite the noise, despite the unprecedented urge to capitulate, I remain hopeful. Markets have a way of humbling us right before they bless us.
Those who have seen it before understand this truth: participants will be crucified every time. Some will survive. Some will return.
If history rhymes at all, then perhaps what lies ahead is not an echo of what we lost, but a final, improbable last dance - reserved for those who stayed mentally intact, remained solvent, upheld the rigour as the game evolved, & kept their edge intact.
In the words of my friend Dougie,
Long Live Crypto.