八年行业复盘：加密最终走了另一条更有价值的路

Original author: Connor Dempsey

Original translation: Chopper, Foresight News

I'm starting a new job on Monday. Before embarking on my fifth career chapter, I wanted to write this article to reflect on my eight-year journey in the crypto industry.

When I entered the crypto space 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 carved out a completely different path.

I've worked at four crypto companies over eight years, witnessing the industry's scale grow from under $1 billion to over $4 trillion, surviving multiple speculative bubbles and one systemic collapse. I've gradually come to realize that what the industry is actually building is far more valuable than what I initially envisioned.

Before starting my next role, I want to record what I've seen and heard, and my predictions for the industry's future direction.

2. The Illusory Wealth Frenzy: The 2017-2018 ICO Mania

In early 2017, I stumbled upon a Bitcoin introduction in a book and was completely hooked. Soon after, I devoured every Bitcoin-related book I could find and got 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 massive ICO (Initial Coin Offering) speculative bubble. ICOs allowed anyone to raise funds globally by selling cryptocurrencies to investors in exchange for crowdfunding their creative projects.

And Ethereum was the star of this show.

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

Reading that article now feels like a historical document: it captures the euphoric optimism of the era while also predicting a future that ultimately didn't come true.

My main argument was that blockchain networks like Ethereum could be used to build a new generation of consumer applications.

Traditional internet platforms (Facebook, Uber, etc.) capture most of the value for large corporations and a few investors; the value generated by blockchain applications would be shared equitably between early participants and ICO investors.

The article also envisioned building a decentralized Uber. In this system, early users and drivers would receive tokens for every ride completed, giving them ownership of the network and ensuring a fairer return of value for early builders.

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

It was a crypto speculation feast mirroring the 2001 dot-com bubble.

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

But just like the dot-com bubble, the underlying technology wasn't mature enough to support the sky-high valuations the market was assigning.

More critically, ICOs completely distorted the incentive structure between entrepreneurs and investors. Project teams could raise millions overnight based on just an idea; investors were left holding tokens, hoping for project delivery and appreciation. Meanwhile, founding teams held large amounts of native tokens, enabling them to cash out and get rich instantly upon listing, completely destroying the motivation to build a solid product.

In a bull market, founders and early investors made a killing; in a bear market, retail investors were left holding the bag. While there were builders with good intentions, ICOs ultimately became a breeding ground for greed, hype, and fraud.

Throughout hundreds of years of financial history, every speculative bubble has followed this pattern.

3. Rebuilding Amidst Ruins: The Circle Hibernation (2018-2019)

As the market trended downwards, leveraging the modest fame I had gained on Reddit, I joined Circle in early 2018 for an entry-level marketing role.

Circle had been around for four years by then, with several consumer-facing products (investing, payments, exchange) that were unprofitable, but its over-the-counter (OTC) trading desk was quietly and steadily generating revenue, sustaining the entire company.

Over the next two years, the industry languished in the post-ICO bubble depression. The vast majority of ICO projects were abandoned and defunct, countless tokens went to zero, and industry sentiment hit rock bottom.

But it was during this dark period that the seeds for the crypto industry's next renaissance were sown.

The industry's focus shifted away from consumer applications and towards rebuilding the traditional financial system on the internet.

US dollar-pegged stablecoins were initially created to allow traders to easily move in and out of crypto positions. By holding a 1:1 reserve of US dollars and treasuries, the token price was always pegged to $1.

Tether's USDT rose rapidly during the ICO boom, with its dollar reserves largely held in bank accounts outside the US. Initially used mostly for trading, stablecoins soon benefited another group: people who lacked access to the traditional banking system but wanted to hold US dollar assets.

For example, people trying to bypass capital controls, wealthy Chinese diversifying assets abroad, and citizens of Argentina and Turkey suffering from inflation.

In 2018, Circle partnered with Coinbase to launch the compliant US dollar stablecoin USDC. Early use cases were still primarily trading, but people began to envision this "Internet money" allowing anyone with an internet connection to access US dollar assets 24/7 without barriers.

Meanwhile, the quality projects that survived the ICO era were mostly focused on finance. Ethereum was not just for fundraising; it could also rebuild the underlying infrastructure of financial markets: Uniswap for trading, Aave and Compound for lending – together forming the DeFi (Decentralized Finance) ecosystem.

Stablecoins and DeFi became deeply intertwined, and a once-in-a-century global pandemic would propel them both to their peak.

4. Back to the Wild West of the Internet: The Messari Era (2019-2021)

In late 2019, I joined Messari, a 13-person data research startup, as its first full-time marketing hire.

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

In early 2020, the COVID-19 pandemic hit, bringing the global economy to a standstill and causing all asset classes to plummet.

To prevent an economic collapse, central banks worldwide unleashed massive stimulus, with over $9 trillion in 2020 alone.

With vast amounts of liquidity seeking a home, and populations locked down at home, a flood of hot money poured into Bitcoin, Ethereum, DeFi, and various speculative assets.

Bitcoin soared from under $4,000 to nearly $70,000, breaking the trillion-dollar market cap barrier with institutional backing, outperforming macro assets like gold.

This loose monetary environment also birthed the famous "DeFi Summer," where the total value locked in DeFi protocols skyrocketed 250 times to $180 billion.

DeFi was initially touted as a way to rebuild traditional finance, but DeFi Summer felt more like a massive online game dominated 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 bizarre food-themed names: YAM Finance, Spaghetti Money, SushiSwap. Traders would deposit mainstream tokens like ETH, USDC, and USDT to claim the project's newly issued tokens like YAM, SPAGHETTI, and SUSHI.

It was absurd and crazy: new projects would launch, and these food-themed tokens, created out of thin air, could reach a market cap of over $1 billion in a few days. Early players would cash out at the top, and the token price would crash dramatically.

This was truly the Wild West of the internet.

Like the ICO mania before it, DeFi Summer created a new wave of crypto millionaires, but it inevitably ended with a bubble burst. This wave also minted a new crypto billionaire, Sam Bankman-Fried, who would later become the central figure in the industry's next disaster.

5. Atop the Bubble: The Coinbase Era (2021)

Shortly after Coinbase went public at a $100 billion valuation in April 2021, I was invited to join its Corporate Development and Venture Capital team.

My work involved M&A, evaluating early-stage crypto venture investments, writing industry trend analysis, and contributing to 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 formed: the NFT craze, represented by digital artwork.

If DeFi was the playing field for professional traders, NFTs broke through to the mainstream. They offered artists a new way to monetize their work online and established a foundation 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 millions of dollars each; artist Beeple's collage fetched an absurd $69 million at Christie's.

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

The madness of 2017 was back, amplified by unprecedented monetary expansion, making this bubble four times larger than the last.

6. The Reckoning: The Great Industry Crash of 2022

But soon, the party ended, and the industry imploded.

The era of low interest rates, quantitative easing, and fiscal stimulus that had inflated all asset prices eventually fed through to consumer inflation. By late 2021, Bitcoin, Ethereum, the Nasdaq, and the S&P 500 all peaked simultaneously; inflation was clearly out of control, forcing central banks to tighten policy – the very policies that had pushed stocks and crypto to all-time highs.

As interest rate hikes began and fiscal policy tightened, investors started re-evaluating their high-valuation assets: Was a cartoon ape really worth $1 million? What justified a $3 billion market cap for a sushi-themed token? How could Dogecoin support a valuation of $90 billion?

Pessimism spread, triggering a chain of defaults across the industry.

If the ICO crash was similar to the 2001 dot-com bubble burst, 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 major domino to fall was Terra's algorithmic stablecoin, UST.

While mainstream stablecoins like USDC and USDT are backed by reserves of cash and US Treasuries, UST relied on a complex algorithm to maintain its $1 peg. The mechanism worked while the market was stable, but it completely collapsed when a selling wave hit.

In a matter of days, $32 billion in market value evaporated, and countless holders saw their assets become worthless instantly.

Following closely was the collapse of Three Arrows Capital, a multi-billion dollar hedge fund, due to its heavy bets on Terra and high leverage. Three Arrows Capital had borrowed heavily from crypto lending platforms like Celsius and Voyager; these platforms had misused user crypto deposits, chasing seemingly safe 8% annual yields. When Three Arrows Capital imploded, these lending platforms froze withdrawals and filed for bankruptcy, wiping out ordinary users' deposits.

During my time at Coinbase, we witnessed FTX and Sam Bankman-Fried stepping in to rescue several distressed crypto lending institutions like BlockFi. He was hailed as the "J.P. Morgan of crypto," the industry's white knight.

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

Remember that expensive arena naming rights deal? That expense, and indeed SBF's entire business empire, was propped up by the exchange's self-issued token, FTT, created out of thin air. SBF used FTT as collateral for massive loans. When the price of FTT crashed, the loans were liquidated, and FTX went bankrupt.

Even worse, FTX misappropriated user funds for investments and to plug holes in its balance sheet. This once $32 billion behemoth collapsed in a week, with $8 billion in user deposits vanishing.

SBF violated the cardinal rule of running an exchange: never touch user assets.

This was crypto's "Lehman Moment."

7. Gambling and Casinos: The Memecoin Mania (2023-2025)

After the FTX crash, SBF went to prison. In just 12 months, the crypto industry's market cap shrank from over $3 trillion to under $1 trillion.

Shortly after, the Biden administration began a broad crackdown on the US crypto industry.

SEC Chair Gary Gensler sued most compliant US crypto firms for securities violations, including Coinbase, Kraken, Uniswap, and Robinhood. Those who had operated compliantly for years became the SEC's primary targets.

Meanwhile, Senator Elizabeth Warren pressured traditional banks to cut ties with crypto clients, effectively isolating the industry from the banking system and forcing many teams to move overseas.

This regulatory approach led to several unintended consequences.

First, any crypto project with a business model (like DeFi protocols) was deemed a potential securities violation, facing the risk of a lawsuit at any time. The safest legal bet turned out to be Memecoins – purely narrative-driven tokens with no real utility or clear vision.

Platforms like Pump.fun spawned millions of Memecoins. Celebrities like Iggy Azalea, Caitlyn Jenner, and the "Hawk Tuah" girl launched their own, all ending in farce.

Crypto had once again become a giant casino, on a scale far larger than before. Over 6 million Memecoins were launched, with the sector's peak market cap reaching $150 billion in late 2024, an even bigger bubble than the NFT craze.

8. Institutionalization: The Crossmint Era (2025-2026)

Amidst this industry circus, the crypto community's bet on Trump winning the election ultimately paid off.

Once Trump's victory seemed likely, 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 firms, and traditional banks reopened their doors to crypto business.

Most importantly, the GENIUS Act was passed in July 2025, the first comprehensive federal crypto 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 major commercial sector. Stablecoin companies like Bridge and BVNK were acquired by Stripe and Mastercard for over $1 billion valuations; Rain completed a nearly $2 billion Series C round; my former employer, 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, which partnered with MoneyGram to help the century-old remittance giant use stablecoins for global cross-border money movement.

As the value of dollar tokenization became increasingly clear, Wall Street began seriously exploring the tokenization of other assets on-chain. Even Larry Fink, CEO of BlackRock, who once called Bitcoin an "index of money laundering," changed his tune, stating