Are We There Yet?

long road ahead

Last night was our Boston Blockchain Association summer social, held at Fidelity Investments. It was an incredible event, and I found myself speaking with one of the OGs of crypto. I won’t name names, but you would know her name.

I asked what she thought of where the crypto market has been and where it is today.

She looked thoughtful. “I’m just trying to figure out if there’s a ‘there,’ there.”

“What do you mean?”

“Well, we’ve had a decade to create real, meaningful progress with crypto … but then ChatGPT comes along and instantly sets the world on fire. Why hasn’t crypto done that yet? Where are we going? Is there a ‘there,’ there?”

Someone interrupted us (like I said, she’s a crypto OG), so I didn’t get to answer her question.

Are we there yet? And where is “there,” anyway?

Truth be told, I think about these questions all the time.

dog with a party blower

Crypto Years are Dog Years

Among longtime investors, it’s often said that crypto years are like dog years. The dizzying pace of change, and the stomach-churning ups and downs, make time feel warped and stretched.

For those of you who have been with us since the beginning of Bitcoin Market Journal, this means the last 5 years have actually been 36 years (according to my human-to-dog calculator).

Given this Interstellar-like sense of time dilation, I think the first mistake we all made was trying to predict the timing.

Many times we equated the crypto revolution to the Internet revolution, saying things like “This is like the Web in 1995,” meaning that in 1995, the first web browsers were just taking hold, but mass adoption was still about five years away.

Well, we’re five years from when we all made those predictions, and clearly mass adoption of crypto is not here yet.

So maybe the invention of bitcoin was more like the invention of ARPANET, the precursor to the Internet, launched in the late 1960s. It took twenty years to invent the Web, then another twenty years to really take hold.

Point is, big technology shifts take time. It may seem like ChatGPT exploded overnight, but AI research started in the freaking 1950s. This blows my mind: when people were just getting television and listening to Elvis, smart people were already researching AI.

Like AI, crypto is an incredibly complex technical, financial, and political phenomenon. Like the Internet, these things take time – more than five or ten years. Patience, young Padawan.

Does It Just Go Away?

For the non-believers, here’s the question to ask: “So what happens to crypto? Does it all just go away?”

This seems very unlikely to me, that we all collectively decide that crypto was a weird dream. This seems especially unlikely with the younger generation, who just accept crypto as a fact of life.

Crypto is already being woven into the fabric of reality. It’s tied into every financial website. It’s coming to the banks. It’s the source of endless fascination, speculation, and conversation.

As bills are being slowly worked through the halls of Congress, and other countries have already released their own frameworks for crypto, code is (literally) becoming law. And law changes the fabric of reality, our entire social construct.

We may not know where crypto is ultimately going, but it’s becoming too big to ignore.

holding a lit lightbulb

It’s Intellectually Interesting

One of the great benefits of crypto is that it has created a profound cultural re-evaluation of money.

Once taken for granted, many of us have found ourselves rethinking money from first principles. What makes something valuable? What is trust? With last week’s XRP ruling, everyone started asking, What makes a security a security?

Those first few years of crypto were built on the euphoric idea that we can do money differently! We can build a new financial system from the ground up! But then we collided with the hard truth that financial systems are difficult and messy.

Worse, the new financial system still needs to integrate with the old financial system. (We still need banks.)

It’s working out these details – and the grindingly slow process of working them out in Congress – that have thrown cold water on the party. But it’s a necessary part of the journey. Embrace the grind.

We’re Not Alone

Not being alone is a good thing. I am continually encouraged by the number of smart people who continue building and investing in this space.

For example, a16z crypto — which has been investing in crypto startups since 2013! – have not wavered in creating valuable, thought-leading content. (And don’t forget the track record of a16z’s founders.)

Cathie Wood’s ARK Invest is continually investing in crypto and crypto-adjacent industries, and despite cooling off this year, it remains one of the most interesting ETFs on the market.

We can even learn from the crypto skeptics. The legendary investor Ray Dalio has been lukewarm on bitcoin, but acknowledges that crypto may have a promising future, saying, “Money as we know it is in jeopardy.”

It’s easy to get lost in the noise of crypto Twitter and clickbait of crypto YouTube. Listening to smart, thoughtful people is far more valuable for investors – especially those with real-world crypto experience. You realize, we’re not alone.

Belief in Yourself

For serious investors, one of the most important success factors is an unshakable belief in yourself.

This does not mean that we keep throwing money at bad investments, or that we never change our mind. Rather, it’s a core belief that in the long run, we will succeed.

We will have ups and downs, like anyone else, but if we keep doing the right things, day after day, we will succeed.

We must live with the possibility, however small, that there is no “there,” there. (Crypto may be outlawed.) While acknowledging the risk, we must develop the central belief that in the long run, we will be successful anyway.

In this sense, we are like athletes. We will have wins and losses, but we must constantly kindle the desire, the drive, the determination to achieve excellence. To be the greatest crypto investors (or builders, or researchers) that we can be.

(Plus, what else are we going to do? Go get a job at a hedge fund? Borrrring.)

After the event last night, I booted up our Blockchain for Everyone Spotify playlist, packed with curated songs to help develop this self-belief.

You can bet on me
Like when bitcoin was a penny
Double down on me
If you haven’t bid already
I’m a certainty
You can’t get these odds in Vegas
Baby, bet, bet, bet, bet on me

It might not come easy
But who said it would?
It won’t happen overnight
But you know it could…

– “Bet on Me,” Walk Off the Earth (listen here)

Investor Takeaway

There’s a “there,” there … even if we don’t know exactly where “there” is.

The creators of ARPANET could not have imagined TikTok, any more than those early AI pioneers could have imagined Midjourney.

We don’t ultimately know where crypto is going. But what we can do as investors, as builders, as researchers, is help guide and influence it in the right direction. And that’s worth working for.

We’re not there yet. But we’re getting there.

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