Crypto is facing an identity crisis—but it’s hardly the first time

Last night’s snoozer of a Super Bowl featured an embarrassing performance, and I’m not talking about the Patriots’ no-show offense. It came during the fourth quarter when a wide-receiver for the Pats took down a spectator racing across the field—one whose body was painted with what appeared to be ads for a sketchy crypto site. Coming on the heels of one of the worst sell-offs in memory, this is the last thing the industry needed: a shirtless moron using the big game to remind everyone what they dislike about crypto.

The Super Bowl episode will provide more fodder for the haters, who have returned in droves now that Bitcoin is slumping. Those include progressive Democrats who are posting sneering tweets that imply they still don’t understand why it’s bad politics to ridicule the millions of U.S. voters who like and own crypto. The hater ranks also include the FT’s indefatigable Jemima Kelly who is back with yet another witty but bad faith take on why Bitcoin is going to zero.

These sentiments are par for the course during crypto downturns. More notable is the number of voices from within crypto who are expressing disgust or disillusionment with the state of the industry. Vitalik Buterin, for instance, is fretting publicly about the state of Ethereum’s ecosystem, while Wintermute founder Evgeny Gaevoy last week blasted the industry for abandoning its former ideals in favor of a vacuous number-go-up fixation. Such sentiments have been echoed by plenty of others on Crypto Twitter, where the vibes have become unusually somber and self-reflexive.

So what’s going on? A big part of it is simply that prices are in the tank. But there is also anxiety over the lack of an obvious explanation for why things are going south. During the previous crypto winter, it was easy enough to point to the collapse of crypto conman Sam Bankman-Fried’s FTX empire and the ensuing regulatory assault as the cause of the industry’s misery. Likewise, earlier downturns in 2014 and 2018 are associated with the catastrophic hack of the first big crypto exchange, Mt. Gox, and with a hangover from the scammy Initial Coin Offering era, respectively.

The lack of a single obvious cause for crypto’s recent woes has led to hang-wringing that crypto’s basic narrative of decentralized money and technology is just a pretense, and that the whole thing is based on quick hustles and hype. And indeed, there’s plenty of evidence to support this position—from pump-and-dump memecoins to blockchains with no purpose to the Trump family’s incessant crypto grifting. It’s hard not to be cynical.

Here’s the thing, though: Crypto has always been awash with hucksters. Like every new technology, it attracts swindlers and snake-oil salesmen—and even more than usual since the tech in question is directly linked to money. Fortunately, many of these people get washed away during downturns, leaving the legitimate crypto players an opportunity to reclaim the space for themselves and to digest a lesson or two.

That’s where we are right now. While watching Bitcoin tumble around 50% is no picnic for investors, it’s far from the worst downturn the sector has suffered. Meanwhile, history also shows that each successive crypto collapse is less painful and prolonged than the previous one—which is probably why JPMorgan Chase’s analysts predicted last week that Bitcoin will hit $266,000 over the long term. It also helps that, this time around, there is a huge class of people holding Bitcoin through BlackRock’s ETF and are showing no signs of selling. As one wag observed, “Boomers have diamondhands.”

The current market reckoning is likely far from over, but the crypto industry is here to stay. And, just maybe, when the industry bounces back, it will be a little more discerning about the sort of companies it holds up as role models. To this end, Fortune’s forthcoming Crypto 100 will be informed in part by a reputation survey that will ask a broad cross-section of industry leaders to anonymously rate their peers. The final rankings will drop in early April. Lastly, please note that Fortune Crypto will be off for President’s Day but back in your inbox on Feb. 23.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

This story was originally featured on Fortune.com