The cryptocurrency industry is currently experiencing a “silent cessation crisis,” according to a veteran hedge fund and digital asset executive.
Quiet resignation, a term popularized in 2022, refers to employees who do the bare minimum of work required by their job and “give up” on the idea of doing anything more.
Travis Kling, founder and chief investment officer of Ikigai Asset Management, says this sentence accurately illustrates the current state of the crypto landscape.
“What I see and hear is that a significant portion of the crypto community is simply much less engaged than in previous years. And they are much less engaged because they believe much less in the potential of crypto projects to solve real-world problems and thus gain significant adoption. It was a dream that was constantly sold and bought from 2017 (the year I joined) until 2022 – “cryptocurrencies will solve real-world problems and thus gain significant adoption”. Several billion dollars of venture capital funding has been raised on this premise.
Kling argues that it is now clear “how utterly useless and ridiculously overvalued many cryptocurrency projects are.”
“Crypto enthusiasts don’t see what’s going to drive the next big bull run. No DeFi summer. No NFT summer. The game is currently DOA (dead on arrival). The metaverse has proven to be a complete joke. Decentralized social media is at a standstill. People are trying to get excited about crypto x AI (artificial intelligence), but I think (as do many others) that this enthusiasm is probably misplaced (at least so far).
DePIN is working, growing, and exciting – probably the brightest spot in the altcoin landscape right now. So it’s definitely a sector that people are looking to for strong future price performance, driven by real-world adoption. But those areas in crypto are few and far between.”
DePIN stands for Decentralized Physical Infrastructure Networks, which aims to leverage blockchain technology to give individuals or businesses control over physical infrastructure such as wireless connectivity, data storage or computing power in a decentralized manner.
Kling also argues that cryptography is “not that early.”
“Bitcoin is worth a trillion dollars and half of Wall Street owns it at this point. All the rest of cryptocurrencies are worth another trillion dollars. Tether owns more Treasuries than Germany. Over $20 billion in venture capital has flowed into this sector in the last four years. We are not that early. Stop comparing it to ‘the late 90s internet’ and look at what happened there.” This is not the Internet of the late 90s anymore. Bitcoin is market fit and stablecoins are market fit and the rest is lost at sea.
At best, solutions that look for problems; at worst, a relentless and brutal scam.
Despite his feelings about the sector, Kling believes that if former President Donald Trump wins the U.S. presidential election in November, his incoming administration could usher in a regulatory regime that could boost altcoins.
“We’ve been talking about this concept for years here: value creation and value accumulation, and the bridge between the two being the symbolic structure. Under a Trump administration, worthless governance tokens could be replaced by yield-generating pseudo-securities that can burn tokens, thanks to a US regulatory framework that allows for such a thing. It’s a world in which, in two years, we could imagine a landscape much less Fugazi Alt.
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