The crypto sector is currently experiencing a “silent stop crisis,” according to a veteran of hedge funds and digital assets.
Quitting, a term that became popular in 2022, refers to employees who do the bare minimum of work their job requires and “quit” with the idea of doing anything extra.
Travis Kling, the founder and chief investment officer of Ikigai Asset Management, says the phrase accurately illustrates the current state of the crypto landscape.
“What I see and hear is that a meaningful part of the crypto community is simply much less involved than in previous years. And they are much less engaged because there is much less belief in the potential of crypto projects to solve real-world problems and, as a result, gain significant adoption. That was a dream that was sold and bought consistently from 2017 (the year I started) to 2022 – ‘crypto will solve real world problems and achieve significant adoption as a result.’ Based on this premise, many billions of dollars in venture capital funding have been raised.”
Kling states that it is now clear “how utterly pointless and ridiculously overvalued” so many crypto projects are.
“Crypto enthusiasts cannot see what will drive the next big move higher. No DeFi summer. No NFT summer. Gaming is currently DOA (dead on arrival). Metaverse turned out to be a complete joke. Decentralized social media has plateaued. People are trying to get excited about crypto x AI (artificial intelligence), but I (along with many others) think that excitement is probably misplaced (at least so far).
DePIN is working and growing and exciting – probably the brightest spot in the alts landscape right now. So that’s certainly a sector people are looking at for strong future price performance, driven by real-world adoption. But those areas in crypto are rare.”
DePIN stands for decentralized physical infrastructure networks, which aim to use blockchain technology to give individuals or companies control over physical infrastructure such as wireless connectivity, data storage or computing power in a decentralized manner.
Kling also states that crypto is “not that early.”
“Bitcoin is worth a trillion dollars and half of Wall Street owns it right now. The rest of the crypto is worth another trillion. Tether owns more government bonds than Germany. More than $20 billion in venture capital has poured into this space over the past four years. We’re not that early yet. Stop with the comparisons to ‘the Internet in the late 1990s and look what happened there.’ This isn’t the internet of the late 1990s. Bitcoin is a good product market fit and the stables are a product market fit, and the rest of this stuff is lost at sea.
Solutions that at best look for trouble, at worst a ruthless and ruthless desire for revenge.”
Despite his feelings about the sector, Kling believes that if former President Donald Trump wins the US presidential election in November, his future administration could usher in a regulatory regime that could boost altcoins.
“We’ve been talking about this concept here for years: value creation and value accumulation, and the bridge between the two is the token structure. In a Trump administration, the worthless governance tokens, and the yield-bearing, token-burning pseudo-securities, could conceivably disappear – courtesy of a US regulatory framework that makes such a thing possible. That is a world in which in two years you can imagine a much less Fugazi Alt landscape.”
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Generated image: Midjourney