The Proof Crypto is not ready

All industries ‘grow up’ in stages. I have been involved with seventeen ‘developing’ industries over 35 years who cannot tell you how many times I have heard comments ‘I cant see it happening’. I am a million selling futurist author.

My paper for my Army Lieutenant to Captain course was ‘why my troop should have a computer’. I was in the Engineers and we built buildings, I wanted a computer to manage the materials. Half of the senior officers laughed at the thought.

When I did Derivatives in an investment bank in London in 1987, managed on a spreadsheet, people asked me if I ever thought ‘derivatives’ would take off. I think it’s a 1,000 $trillion industry now.

Take Tony Robbins to the UK? Nah, the Brits will never watch him! People buy health supplements? Why would they ever do that!

Buy Bitcoin and Crypto? Ed, really. Is this another wacky industry from you?

I don’t care two hoots for the masses opinions about whether they think crypto will go mainstream, for the same reason that Steve Jobs never asked customers about what they wanted in a product. ‘How would they know?’ he said.

The public are ‘surprised’ by the growth of Crypto. Just as they were ‘surprised’ by the growth of the internet, smart phones, social media and everything else digital.

This is also why I don’t listen to current crypto people’s views on the future of crypto. Commentators, influencers and leaders in this space have been spectacularly wrong in predicting the development in this industry.

In May 2017, I was at a drinks party in New York [Consensus] which would now be considered having many of the ‘legends’ of crypto. Legends of Ethereum, EOS, Ripple, Monero, Zcash, etc were there, having a beer. I must have heard 10 people say ‘this is going to be like the Dot Com boom.’ [the first tech boom in the late 1990s.]

To their surprise, I disagree with them. ‘It didn’t feel like it at all’, I said.

Then I explained that, unlike everyone else in the room, most of whom weren’t even at grade school during the Dot Com boom, I was heavily involved in this era. I listed two companies in London. It didn’t feel like it at all. The Dot Com boom was all bankers. The emerging crypto boom was led by a whole lot of Sheldon Coopers, protocol-level tech heads.

We all know what happened after that drinks party in May 2017. Crypto boomed then bust. A crypto-winter of two years, followed by an initial boom from late 2020 til today.

If Crypto was a person in development, today it is a new teenager. Puberty has struck. The potential of adulthood has emerged. The person is developing the body of an adult yet it still has the brain of a child. A 14-year old girl. A 16 year old boy.

And it is currently talking and acting like a cocky teenager. And doesn’t realise that the adults in the room are laughing at it. That they don’t care how much money you have made, you are still a kid. And the real game of life is very different. Crypto is an amateur in a professional game of cards who laughs after its won four hands in a row.

Crypto is worth 2 trillion dollars. The share markets are worth 100 trillion. Property is 350 trillion. Foreign Exchange is an 1500 trillion business. In the world of money, crypto is a rounding error.

It is unregulated. Do you really think that Binance etc will be allowed to operate its loose KYC in the next era of the industry. Do you really think that governments will allow exchanges to hold their citizens money/assets in the cloud, unregulated, uncontrolled?

How do you think the valuations of 99% of crypto will survive after the professional analysts look at their financial models? How many paying customers are required to justify their valuations? If a currency is based on demand, how likely are they to get their demand.

Of 10,000 coins, 9,900 will fail the test. Just like their used to be 10,000 social media companies 15 years ago. They will die, their coins will go illiquid, the exchanges will delist them. And similar listings will be classified for what they are, unregulated unbacked [no asset backing] capital raising, ie securities.

Please understand. I love where crypto is today. I totally get it. It is where it is meant to be. Like so many teenagers, it is loving the joy of new success. And it does not need to know about the reality of adulthood that is about to spank it in a couple of years.

This is why the industry is not excluding the Dogecoin BS. A meme with a value of $60bn is a pyramid where a bigger fool buys the coins. No credible exchange should list it. It means crypto is not credible or mature enough to join the adults table.

The big boys are just buying the big coins with the credible use cases. They know that 99% of coins will collapse in value. 95% of the people swimming in profits today will loose their shirts chasing BS. Then the big boys will step in, regulate the idiots out of the market and the real value of crypto technology will take off. It’s what always happens.

Crypto is not ready for the big table. Let’s enjoy the party with the teens. Smile at their naive chatter about ‘lambos’ and ‘quick riches’. Yet never forget the next era is where the big money is yet this requires an adult approach.