Eight-year industry review: Crypto ultimately took another, more valuable path

Original Author: Connor Dempsey

Original Translation: Chopper, Foresight News

On Monday, I will start a new job. Before embarking on my fifth career journey, I wanted to write this article to reflect on my eight-year journey in the crypto industry.

When I entered the crypto industry in 2017, I believed this technology would change everything.

Government-issued fiat currencies would be replaced by decentralized tokens; blockchains would eliminate all the rent-seeking intermediaries in the transaction chain; power would shift from large corporations back to ordinary users.

Looking back now, almost none of those initial visions have materialized, but the industry has taken a completely different path.

I have worked for four crypto companies over eight years, witnessing the industry grow from less than $1 billion to over $4 trillion, weathering several speculative bubbles and a systemic collapse. I have gradually come to realize that what the industry is actually building is far more valuable than what I initially imagined.

Before starting my next job, I want to document what I have seen and heard, and my predictions for the industry's future direction.

1. The Illusory Craze for Quick Riches: The ICO Mania of 2017–2018

In early 2017, I stumbled upon an introduction to Bitcoin in a book and was completely hooked. Soon after, I read every Bitcoin-related book I could find and had the idea to move to Singapore to write a blog and delve deeper into this new technology.

At the time, I didn't realize I was at the tail end of the ICO (Initial Coin Offering) super-speculative bubble. ICOs allowed anyone to raise funds globally, crowdfunding for creative projects by simply selling cryptocurrencies to investors.

And Ethereum was the star of this frenzy.

In November 2017, I published a beginner's guide to Ethereum, which went viral on Reddit. It coincided with the peak of the bubble, and just a month later, the market completely collapsed.

Reading that article now feels like a time capsule: it captured the prevailing optimism of the era but also predicted a future that ultimately failed to come true.

My main argument was that blockchain networks like Ethereum could be used to build new consumer-facing applications.

The value created by traditional internet platforms (Facebook, Uber, etc.) mostly goes to giant corporations and a few investors; the value generated by blockchain applications would be shared among early participants and ICO investors.

The article also envisioned a decentralized Uber. In this system, early users and drivers would receive tokens for each completed trip, thus owning a stake in the network, providing a fairer return of value to the early builders.

The vision looked good on paper, but this decentralized revolution ultimately failed completely.

It was a crypto speculative feast replicating the 2001 internet bubble.

Ethereum became the most powerful fundraising platform in history, with over 3,000 ICO projects raising a total of $22 billion globally.

But, just like the internet bubble, the underlying technology wasn't mature enough to support the sky-high valuations the market was giving it.

More critically, ICOs completely distorted the incentive structure between entrepreneurs and investors. Project teams could raise tens of millions of dollars overnight based on nothing but an idea; investors were left holding only tokens, hoping the project would deliver and increase in value. Meanwhile, founding teams held large amounts of native tokens and could cash out for a fortune immediately upon listing, completely losing the motivation to build a solid product.

During the bull market, founders and early investors made a killing; during the bear market, ordinary retail investors were left holding the bag. Despite some well-intentioned builders, ICOs ultimately became a breeding ground for greed, hype, and fraud.

Looking across centuries of financial history, every speculative bubble plays out the same way.

2. Rebuilding from the Ruins: The Circle Hibernation Period of 2018–2019

As the market turned gloomy, I leveraged the small bit of fame I gained on Reddit to join Circle in early 2018 in an entry-level marketing role.

Circle had been around for four years by then, with several consumer-facing products (investing, payments, exchange) all unprofitable. However, its over-the-counter (OTC) trading desk was quietly and steadily generating revenue, supporting the entire company's operations.

For the next two years, the industry was mired in the post-ICO bust depression. The vast majority of ICO projects were forgotten and completely shut down; countless token prices went to zero, and industry sentiment hit rock bottom.

But it was during this darkest hour that the seeds for the next renaissance of the crypto industry were planted.

The industry's focus shifted away from consumer applications, concentrating instead on rebuilding the traditional financial system on the internet.

Stablecoins pegged to the US dollar were initially created to help traders quickly move in and out of crypto positions. By maintaining a 1:1 reserve of dollars and Treasuries, the token price is always anchored to $1.

Tether's USDT rose rapidly during the ICO boom, with its dollar reserves held largely in bank accounts outside the US. Initially used mainly for trading, stablecoins soon benefited another group: people without access to the traditional banking system who wanted to hold dollar assets.

For example, people trying to circumvent capital controls, wealthy Chinese seeking offshore asset allocation, and the populations of Argentina and Turkey suffering from inflation.

In 2018, Circle partnered with Coinbase to launch the regulated dollar stablecoin USDC. Its early use case was still primarily trading, but people began to envision: this internet money could allow anyone with an internet connection to access dollar assets 24/7 without barriers.

Meanwhile, the quality projects that survived the ICO era were mostly focused on the financial track. Ethereum was not just suitable for fundraising; it could reconstruct the underlying infrastructure of financial markets: Uniswap for trading, Aave and Compound for lending, forming the DeFi ecosystem.

Stablecoins and DeFi would become deeply integrated from this point, and a once-in-a-century global pandemic would push both to their developmental peak.

3. Back to the Wild West of the Internet: The Messari Era, 2019–2021

At the end of 2019, I joined the 13-person data research startup Messari as its first full-time marketing hire.

The company had only 4 analysts, deeply researching the cutting edge of DeFi; at that time, the total market cap of DeFi was a mere $665 million.

In early 2020, the COVID-19 pandemic hit, the global economy ground to a halt, and all asset classes crashed.

To prevent an economic collapse, central banks worldwide embarked on massive quantitative easing, injecting a staggering $9 trillion into the system in 2020 alone.

With this massive influx of money seeking a home, coupled with everyone confined to their homes, a torrent of hot money flowed into Bitcoin, Ethereum, DeFi, and various speculative assets.

Bitcoin surged from under $4,000 to nearly $70,000, its market cap exceeding $1 trillion with institutional backing, outperforming macro assets like gold.

This loose monetary environment also gave rise to the famous 'DeFi Summer', where the market cap of DeFi protocols exploded 250-fold to $180 billion.

While DeFi was initially touted to reconstruct traditional finance, DeFi Summer felt more like a massive online game driven by profit-seeking traders, with tens of billions of real dollars entering the fray.

The core gameplay was yield farming. Anonymous developers would launch new protocols, often with names clustering around various foods: YAM Finance, Spaghetti Money, SushiSwap. Traders could deposit mainstream tokens like ETH, USDC, and USDT to claim the newly issued tokens of these projects: YAM, SPAGHETTI, SUSHI.

The scene was absurd and frantic: a new project would launch, and its food-themed token, born from nothing, could reach a market cap of over $1 billion in just days. Early players would cash out at the top, and the token would plummet.

This was the true Wild West of the internet.

Like the ICO craze before it, DeFi Summer created a wave of new millionaires, but it was ultimately destined for a bubble burst. This wave also birthed a new crypto billionaire, Sam Bankman-Fried, who would later become central to the industry's next catastrophe.

4. Peak of the Bubble: The Coinbase Era, 2021

Shortly after Coinbase went public with a $100 billion valuation in April 2021, I was invited to join the company's Corporate Development and Venture Capital team.

My work involved corporate mergers and acquisitions, evaluating early-stage crypto venture projects, writing industry trend analysis, and even helping produce Coinbase's short-lived podcast. To this day, it remains one of the best teams I've ever been a part of.

It was during this period that another speculative bubble quietly took shape, embodied by the NFT craze centered around digital artwork.

If DeFi was the arena for professional traders, NFTs broke through to the general public. They offered artists a new way to monetize online and laid the groundwork for verifying ownership of digital assets on the internet.

But, just like ICOs and DeFi Summer, NFT speculation quickly spiraled out of control. Digital collectibles like cartoon apes, punks, and penguins sold for as much as $1 million each; artist Beeple's collage fetched an absurd $69 million at Christie's.

Crypto had fully entered the mainstream: Larry David mocked crypto skeptics in a Super Bowl ad; Sam Bankman-Fried's exchange FTX spent $135 million for the naming rights to the Miami Heat's arena. Everyone seemed to be getting rich from tokens, NFTs, and crypto-themed stocks.

The madness of 2017 was repeating, but magnified fourfold due to unprecedented monetary expansion.

5. The Reckoning: The Great Industry Collapse of 2022

But soon, the party ended, and the industry plunged into a collapse.

The same policies of low interest rates, money printing, and fiscal stimulus that had inflated all asset prices eventually fed through to consumer inflation. By the end of 2021, Bitcoin, Ethereum, the Nasdaq, and the S&P 500 peaked simultaneously; runaway inflation was inevitable, forcing central banks to tighten the very policies that had driven stocks and crypto to all-time highs.

As interest rate hikes began and fiscal stimulus was withdrawn, investors re-evaluated their high-valuation assets: Was that cartoon ape really worth $1 million? Why did a sushi-themed token have a $3 billion market cap? And how could Dogecoin justify a $90 billion valuation?

As pessimism spread, a chain reaction of defaults began in the industry.

If the ICO crash was akin to the 2001 dot-com bubble burst, then 2022 felt more like the 2008 global financial crisis: a few toxic assets combined with high leverage nearly took down the entire industry.

The first domino to fall was Terra's algorithmic stablecoin, UST.

Stablecoins like USDC and USDT are backed by ample reserves of cash and Treasuries. UST, on the other hand, relied on a complex algorithmic mechanism to maintain its $1 peg. The mechanism worked during calm markets but completely collapsed when a wave of selling hit.

In a matter of days, $32 billion in market value vanished into thin air, and countless holders saw their assets go to zero.

Hot on its heels, the multi-billion dollar hedge fund Three Arrows Capital declared bankruptcy due to its heavy long position on Terra and high leverage. Three Arrows Capital had borrowed heavily from crypto lending platforms like Celsius and Voyager. These platforms had misappropriated user crypto deposits, chasing seemingly safe 8% annual yields. When Three Arrows Capital collapsed, the lending platforms froze withdrawals and filed for bankruptcy, wiping out the deposits of ordinary users.

During my time at Coinbase, we witnessed FTX and Sam Bankman-Fried step in to rescue several struggling crypto lenders like BlockFi. He was hailed as the 'JPMorgan of Crypto' and the industry's white knight.

But the truth eventually emerged: SBF and FTX were the biggest risks of all.

Remember FTX spending a fortune on the arena naming rights? That expense, and indeed SBF's entire business empire, was propped up by FTX's own freely issued token, FTT. SBF used FTT as collateral for massive loans. When the price of FTT collapsed, his loans were margin-called, and FTX declared bankruptcy.

Worse still, FTX had been secretly using customer funds for its own investments and to plug holes in its balance sheet. This once-$32 billion giant crumbled within a week, with $8 billion in customer deposits vanishing without a trace.

SBF had violated the cardinal rule of exchange operation: never touch user assets.

This was crypto's 'Lehman Moment'.

6. Gambling and Casinos: The Memecoin Frenzy of 2023–2025

After the FTX collapse, SBF was sent to prison. Within 12 months, the total crypto market cap had shrunk from $3 trillion to under $1 trillion.

Then, the Biden administration began a full-scale crackdown on the US crypto industry.

SEC Chair Gary Gensler sued most compliant crypto businesses in the US for securities violations. Coinbase, Kraken, Uniswap, and Robinhood all received enforcement notices. The companies that had spent years playing by the rules became the SEC's primary targets.

Simultaneously, Senator Elizabeth Warren quietly pressured traditional banks to sever ties with crypto clients, effectively isolating the crypto industry from the banking system and forcing many teams offshore.

This regulatory approach led to several unintended consequences.

First, any crypto project with a business model (like various DeFi protocols) was deemed a potential securities violation, facing constant litigation risk. The safest legal option became the Memecoin—a token with no practical application or clear vision, pure narrative.

Pump.fun launched millions of Memecoins. Celebrities like Iggy Azalea, Caitlyn Jenner, and the 'Hawk Tuah' girl launched their own Memecoins, all ultimately turning into farces.

The crypto industry had once again become a massive casino, larger than ever. Over 6 million different Memecoins were launched, with the sector's market cap peaking at $150 billion by the end of 2024, a bubble even surpassing the NFT craze.

7. Moving Toward Institutionalization: The Crossmint Era, 2025–2026

Despite this industry sideshow, crypto's bet on Trump's election paid off.

Once the prospect of a Trump victory became clear, Bitcoin hit new all-time highs. The market priced in a clear logic: the world's largest economy was shifting from hostile regulation to friendly support. Gary Gensler resigned; the new SEC dropped lawsuits against US crypto companies; traditional banks reopened their doors to crypto business.

Most importantly, the GENIUS Act was passed in July 2025, the first federal crypto-specific legislation in the US, establishing clear regulatory rules for stablecoins.

Washington sent a clear signal to Wall Street: the crypto industry, especially stablecoins, was about to become a massive business sector. Stablecoin companies like Bridge and BVNK were acquired by Stripe and Mastercard for over $1 billion valuations; Rain closed a nearly $2 billion Series C funding round; my former company, Circle (issuer of USDC), went public, reaching a peak valuation of $60 billion in June 2025.

By then, I was Head of Marketing at Crossmint, where we partnered with MoneyGram to help this century-old cross-border remittance giant leverage stablecoins for global money transfers.

As the value of