The cryptocurrency sector is currently experiencing a “quiet abandonment crisis,” according to a hedge fund and digital asset expert.
A popular term in 2022 is ‘quiet quitting’, where employees do the bare minimum required for their jobs and ‘stop’ thinking about doing anything else.
Travis Kling, founder and chief investment officer of Ikigai Asset Management, said the phrase accurately captures the current state of the cryptocurrency landscape.
“From what I’ve seen and heard, a lot of the cryptocurrency community is much less engaged than it has been in the past few years. And they are much less engaged because they have much less faith in the potential of crypto projects to solve real problems and ultimately achieve significant adoption. That was the dream that was sold and bought consistently from 2017 (the year I came in) to 2022. ‘Cryptocurrencies will solve real problems and ultimately achieve significant adoption.’ Billions of dollars of venture capital were raised on this premise.”
Kling argues that it is now clear how “completely pointless and ridiculously overvalued” many cryptocurrency projects are.
“Crypto enthusiasts don’t know what will lead to the next big rally. There is no DeFi summer. There is no NFT summer. Gaming is currently DOA. The metaverse has turned out to be a complete joke. Decentralized social media is stagnant. People are trying to get excited about crypto x AI, but I (along with many others) think that excitement is likely misplaced (at least for now).
DePIN is working, growing, and exciting. It’s probably the brightest spot in the alts market right now. So this is definitely an area where people are expecting strong future price performance driven by real-world adoption. But such areas of crypto are extremely rare and far away.”
DePIN stands for Decentralized Physical Infrastructure Network, and it aims to use blockchain technology to allow individuals and companies to control physical infrastructure such as wireless connectivity, data storage, and computing power in a decentralized manner.
Kling also argues that it’s “not that early” for cryptocurrencies.
“Bitcoin is worth $1 trillion, half of Wall Street owns it at this point. All the other cryptocurrencies are worth another $1 trillion. Tether owns more government bonds than Germany. There’s been over $20 billion of venture capital poured into the space in the last four years. We’re not that early. Stop comparing it to ‘look what happened with the internet in the late 90s.’ This is not the internet of the late 90s. Bitcoin has product-market fit, stablecoins have product-market fit, and the rest is lost to the ocean.
At best, it’s a solution to a problem; at worst, it’s a ruthless and brutal scam.”
Despite his feelings on the sector, Kling believes that if former President Donald Trump wins the US presidential election in November, his future administration is likely to introduce regulatory regimes that could promote altcoins.
“We’ve been talking here for years about value creation and value accretion, and the token structure that connects the two. The Trump administration could potentially introduce pseudo-securities that would eliminate worthless governance tokens and generate revenue by burning tokens, thanks to the US regulatory framework that allows such things. You can imagine that in two years the landscape of Fugaci Alt will be much less visible.”
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