Thread by @Melt_Dem

CRYPTOS GET CRUSHED.

CRYPTO IS IN A FINANCIAL CRISIS.

now that i have your attention, let’s talk about the crypto market puking up 20% across the board yesterday 🤮 (thanks to @CNBC for the headline inspo - writing clickbait is fun!)

ICYMI:

https://twitter.com/cnbcfastmoney/status/1062836758944063489?s=21

2/ it’s been a wild 24 hours. crypto is a speculators game, and volatility is back, baby!

as my biz partner @dannylmasters pointed out earlier this year - history rhymes - and nothing goes up in a straight line forever 👇🏾
medium.com/coinshares/his…

3/ while i wasn’t there for the dot.com bubble, this article circa 2000 could be written today about crypto. tech that changes industries and markets doesn’t get built overnight. there are fits, starts, and failures.

4/ let's discuss 3 things:
- crypto is in crisis (unless you're bitcoin)
- the market knows it, and eased some of that pain. we have to look beyond the assets themselves for value creation.
- building a less centralized financial system is going to take a long time. plan wisely.

5/ let’s start with financial performance. it’s no secret that crypto prices have taken a beating this year. looking at large cap cryptos - meaning $BTC + $ETH + $XRP = 3/4 of market:
- price across all 3 down 72%
- BTC, over 50% of market, is down 58%

6/ The other extreme, the “long tail” (yes - the potato 🥔 fund) - is hurting
- prices down 95%+ year to date
- prices dropped hard in Q1 and have kept sliding
- teams in crisis mode with leadership changes, downsizing, and challenges related to regulation, tax, and product

7/ let's not look at price:
- over 80% of cryptos have less than $10MM in 30-day trade volume
- code commits in the low double digits last quarter
- only a few hundred tsxns per day, if that
(see @onchainfx)

numbers don't lie. many assets are trapped in a vicious spiral.

8/ you may be saying “thanks, captain obvious.”

let’s step back from crypto - the asset, and look at enterprise value creation. a lot of value capture is happening in companies serving the crypto asset class. these co's are worth more than most projects, and have cash to burn.

9/ most investors aren’t going out and buying crypto directly, nor will they do so *anytime* soon (sorry)

that “institutional herd” is getting exposure through existing investment vehicles that they know and understand (even if the assets are new and strange)

10/ more and more traditional financial institutions are looking at crypto as a way to:
1. create new revenue streams
2. play "innovation" theater
2. build enterprise value

all of these 👇🏾 are less than a year old! moves *may* be priced in, but more is coming...

11/ *THE* question for investors - where will value creation happen 👀

- in the assets, especially networks w/ proven governance
- in the new companies building infrastructure and services
- in the funds and asset managers providing exposure
- in publicly traded co's
....

12/ just look at the people - thousands who continue to spend their time, energy, and capital on helping the crypto ecosystem grow... by writing, researching, advocating, building, developing, or simply holding.

@RyanRadloff does the math 👉🏽 medium.com/coinshares/hal…

13/ many crypto projects that raised money through an ICO face massive challenges to stay relevant and create real purpose.

for now, our collective hopes and fears are expressed as speculative price moves.

projects don’t die the way companies do, and the arc of time is long.

14/ if the next five years are anything like the last, expect value to flow from centralized corporate entities to less centralized networks and applications.

we can't pinpoint *when* that shift will happen, but here at @CoinSharesCo - we believe it's inevitable 🚀

/fin/