Jan 9th 2023

Amid all the “bah, told you it was all worthless” commentary from skeptics recently, something crystallized for me. I did not fully appreciate how much public perception of crypto had shifted since the last time prices were bouncing along cyclical lows. Back then, crypto was a new type of money, a global computer, an engagement incentive, a governance value.

Now, in the eyes of the mainstream, crypto is a market.

Like many of you, I spent part of the end-of-year break explaining to family and friends that, no, crypto was not “over.” I puzzled for a while over the extent of this misconception until it clicked: It’s not that the crypto market got financialized – we all know that, just as we all recognize the damage done to perception and sentiment by the collapse of some of the main architects and beneficiaries of that financialization.

It’s more that crypto became just a market for most casual observers. That’s all, just a market. And with the market in dire straits, well, obviously there’s no longer any point to the whole concept.

Looking back, it’s not hard to see how this shift happened. The increasing levels of institutional interest (Goldman Sachs! Fidelity! BlackRock!), prices (up 20% in a day! down 80% year to date!), scams (rug pull! exploit!) and regulatory concern (protect investors! protect the financial system!) fueled headlines that grabbed attention, incentivizing more stories along the same vein. The power of repetition as media coverage of the industry broadened cemented the association of “crypto” with “risky.”

I’m not pointing the finger at media – many publications have done a great job of also surfacing the more transformative aspects of our industry. But perception tends to latch on to what it can grasp, and the “public” (generalizing here) is familiar with markets, whereas it doesn’t necessarily understand Merkle trees. Price moves are easier to visualize than consensus algorithms. And the power of institutional signaling is more relatable than weighted decentralized liquidity pools. The markets narrative is stickier than the tech narrative because it is more comfortable. The risk narrative is stickier than the innovation narrative because drama is better at grabbing our attention.