Crypto on ice

There has been so much written about the recent collapse of FTX and SBF and things are changing every day. I don’t have much to add beyond what I am reading, mostly in shock. Thankfully I did not have exposure to this catastrophe happening, but of course the prices are down everywhere. I would rather try to think about the impact this will have, and for how long. Is crypto on ice? When will it thaw? What is next?

I wanted to delve into the fact that I think this single event will have ramifications on the crypt ecosystem for awhile. The famous quote from Bill Gates says “Most people overestimate what they can do in one year and underestimate what they can do in ten years.” Which got me thinking about how much of an impact this will have on the crypto asset ecosystem in the years to come. Most of the conversations I have been having pin this even to something around 2-6 years.

Breaking this down (as always mostly for myself) means the following. 5-6 years from now it will be 2028. The 2030’s will be just 2 years away. This feels like a long time. Thinking about 5 years is literally the entire time my son has been alive. Another 5 years and he will be 10 years old. To put it another way, 5 years ago it was 2017. My daughter is another story but since he’s 5 I am sticking with simple math 🙂 I would never have imagined how far the crypto world would come since then – it was a distant dream that a VERY small amount of people believed in. If I really think about what types of products, services, foundations, and institutional moves that have happened in 5 years I am astounded. So what does this mean for those very same builders and investors for the next 5 years? Another question is; what is the real difference to this space from say 2 weeks ago? My answer is not much.

2 years from now means 2024. Another presidential election in the US and just at the longest planning cycles and financial plans for most startups right now. I won’t try to predict the economic future, but it certainly seems like the mess we are in right now will not be “fixed” by then. This feels like the optimistic bull case for crypto building, investing and prices. The highs of $50k-$60k seem furthest away during the deepest valleys. Are we even there yet? Some are calling for $5k-$10k in the chats I am in. But what do I know?

So back to my premise – 2-6 years is both short and long. Its both a lifetime and a blip. Its nothing at all when you look at the death knells of so many foundational technology changes – Including even the Internet. No, this isn’t another hopium post about increasing prices of crypto – fret not. This is a post about thinking about what the future will hold in approximately 5 years. What is most interesting is that a lot of the “tourists” got out of investing in crypto, building in crypto, and the ecosystem during this “winter”. However, things are now a lot more dire. Sentiment has shifted and there’s few narratives coming that really make sense. Remember the Ethereum merge? Remember tracking hash rate of Bitcoin? Remember the institutions are coming?

The answer, back to Bills quote, is that it has always been too hard to tell. The patterns that emerge seem obvious in hindsight at the real goal is to keep going. When looking back 5 years ago, the things that I wish were different and the same are drastically similar. When I look into the next 5 years I think about the things I want to be doing, the people I want to be spending time with, and the actions I want to be taking.

For now Bitcoin, and most of the crypto ecosystem, is on ice. Its down but not out. I am going to stick to what I know best; investing in great people, helping teams that want my kind of expertise, and surrounding myself with people that care. And finally, continuing to dollar cost average in.

Tags: crypto