The State of Crypto Is Anything But Strong
Industry boosters say they’ve learned their lessons from the last crash, but regulators need to move faster to protect a new wave of mainstream investors from the same old story.
After more than a year, the freeze of a deep crypto winter has thawed. Bitcoin prices have surged to new heights, venture capital firms are raising funds to invest in cryptocurrency startups, and gloating crypto bros are back to mocking skeptics with the words “have fun staying poor.” Once again, the people pouring millions of dollars into memecoins that depict dogs in knit hats or drooling cartoon sloths are being described as the smart money. When the developer of the sloth coin, Slerf, accidentally destroyed $10 million of the funds he’d raised from early buyers, the attention only fueled a massive spike in trading volume—$2.7 billion worth in 24 hours.
This speculative mania is familiar to veterans of the last crypto boom, from 2021 to 2022. Instead of “the metaverse,” everyone now just says “AI.” What’s new is a veneer of normalcy, a reputational makeover. While the average crypto fan of the last boom talked in terms of Lamborghinis and get-rich-quick schemes, the industry’s new spokespeople are CEOs in suits who focus on regulatory compliance, politicians whose favorite word is “innovation,” and traditional financial institutions pitching cryptocurrencies as a sound way to diversify your portfolio. The problem for the rest of us is that the crypto markets remain fraught with manipulation and scams.