Author: Connor Dempsey
Compiled by: Jia Huan, ChainCatcher
The crypto revolution has indeed happened. It's just completely different from what was initially expected.
When I first entered the industry in 2017, the consensus was that this technology would change everything.
Government-issued fiat currencies will be replaced by decentralized currencies. Blockchain will eliminate rent-seeking intermediaries in every transaction. Power will shift from corporations to users.
Almost none of these things happened. But other things did happen.
To date, I have worked at four crypto companies for eight years: @circle, @MessariCrypto, @coinbase, and @crossmint.
I've witnessed this asset class balloon from less than $1 billion to over $4 trillion, weathering several speculative bubbles and a near-systemic collapse. I've found that what this industry has actually built is far more interesting than any predictions made back then.
Before starting my fifth job, I want to document these eight years and talk about where I think it will lead next.
A False Boom (2017-18 Token Issuance Frenzy)
In early 2017, I stumbled upon an explanation of Bitcoin in a book and became hooked. Soon after, I read every book I could find related to it, and then made a plan: to go to Singapore and write a blog specifically about this fascinating new technology.
At the time, I didn't know that this was the tail end of a huge speculative bubble surrounding "early-stage token financing." This model allowed anyone to raise money online for an idea by selling digital tokens to investors.
Ethereum is the main battleground for all of this.
In November 2017, I published a simplified guide to Ethereum, which went viral on Reddit. That was right at the peak of the bubble, and it burst a month later.
Looking back at that article now, it's more like a time capsule—a condensation of the optimism of that year, and a prediction of a future that never came.
The predictions of that year
The article's core argument is that blockchain networks like Ethereum can be used to build new consumer-grade applications.
The value created by most consumer-grade apps (like Facebook and Uber) flows to large corporations and a few investors. The value created by these newer apps, however, will be shared by early participants (and early token investors).
The article envisions building a "decentralized Uber" using Ethereum. Early users and drivers would earn tokens for each completed ride, thus owning a portion of the network. This would more fairly reward early adopters who helped the network get started.
On paper, it was an admirable goal. But this decentralized revolution ultimately suffered a major setback.
What actually happened?
A speculative frenzy reminiscent of the 2001 dot-com bubble.
Ethereum has proven to be the most efficient crowdfunding platform in history. More than 3,000 token offerings have raised $22 billion from investors worldwide.
But just like in 2001, the underlying technology is far from enough to support those application scenarios that have been given outrageous valuations.
Worse still, this model undermines the normal incentive mechanism between investors and builders. A builder can raise $10 million overnight simply by having an idea.
Investors only receive tokens as a return, and these tokens only appreciate in value once the project is completed. However, the developers themselves also retain tokens, allowing them to cash out and become wealthy from day one, thus eliminating their incentive to build useful products.
The founders and early investors made a fortune, while inexperienced investors were wiped out. Although there were genuinely motivated people involved, this model unfortunately became a breeding ground for greed, fraud, and exploitation.
It's no different from every speculative bubble in the past few centuries.
Building from Ruins (Circle, 2018-19)
My wallet was getting thinner and thinner every day. I used the little bit of fame I had built up on Reddit to land an entry-level marketing job at Circle in early 2018.
At the time, Circle was four years old. It had a set of consumer-grade applications that weren't making money (investment, payments, trading) and an over-the-counter trading desk that quietly printed money and kept the company running.
For the next two years, the entire industry was in a hangover of token frenzy. Most projects were abandoned, and most tokens went to zero. The atmosphere was utterly rotten.
But it was at this time that the seeds of the next crypto revival were sown.
This time, the focus is no longer on consumer-grade applications, but on reshaping finance with the internet.
US dollar and DeFi
Dollar-backed "stablecoins" were originally designed to allow traders to easily switch between crypto positions. They lock their value at $1 with a 1:1 ratio of dollar and Treasury reserves.
Tether's USDT took off first during the token frenzy, and dollar reserves in offshore bank accounts rapidly expanded.
Although initially used in trading, stablecoins have become incredibly valuable to those who want to hold US dollars but lack access to the traditional banking system.
For example, people who want to circumvent capital controls; wealthy Chinese people who want to diversify their assets; and Argentinians and Turks who want to escape inflation.
In 2018, Circle partnered with Coinbase to launch a compliant US version: USDC. Initially used primarily for transactions, some began to predict that this new type of internet dollar would allow anyone with internet access to receive US dollars 24/7.
Meanwhile, the projects that survived the token era were almost all in the financial sector.
Since Ethereum can be used for financing, it can also be used to rebuild other fundamental components of the financial market. Transaction protocols (Uniswap) and lending protocols (Aave, Compound) were later called "decentralized finance," or DeFi.
Stablecoins and DeFi will eventually converge. And what propelled them to new heights was a once-in-a-century pandemic.
Unbridled growth reappears (Messari, 2019-2021)
At the end of 2019, I joined Messari, a data research startup with 13 people, as their first full-time marketer.
The company had a team of four analysts conducting cutting-edge research in the DeFi field. At that time, the total value locked in DeFi had already grown to $665 million.
Then, in early 2020, a mysterious virus broke out in China, threatening to bring the global economy to a standstill. All markets plummeted.
Central banks around the world responded by injecting trillions of dollars into the global economy to prevent a collapse. By the end of 2020 alone, $9 trillion had been injected.
This money needed a place to go. With everyone stuck at home, a huge amount of money poured into Bitcoin, Ethereum, DeFi, and various speculative assets.
Bitcoin surged from less than $4,000 to nearly $70,000, and its market capitalization surpassed one trillion dollars, driven by institutional investors, outperforming all macro assets such as gold.
Connor Dempsey's central bank continues to print money, sending all markets to the moon, while simultaneously telling the world one thing: indepreciable currencies have their place in the world.
#Bitcoin has surged to over $1 trillion at the fastest pace, outperforming all other macro assets.
These conditions also spurred the so-called "DeFi Summer," during which the total value of DeFi protocols increased 250-fold, reaching $180 billion.
DeFi was supposed to rebuild traditional finance. But the "DeFi Summer" looks more like a massive online game with a group of profit-driven traders betting billions of dollars.
The gameplay is called liquidity mining. An anonymous developer has released a new protocol, and for some reason, it's mostly themed around food.
YAM Finance, Spaghetti Money, SushiSwap. Traders deposit existing tokens (ETH, USDC, USDT) and earn newly minted tokens. $YAM, $SPAGHETTI, $SUSHI.
The whole process was both absurd and astonishing. The protocol went live, and the newly minted tokens surged to a market capitalization of $1 billion within days. Then, early participants dumped their holdings, and the tokens crashed.
This is the true Wild West era.
Like previous token crazes, DeFi Summer created a batch of millionaires before it collapsed.
It also created a billionaire—Sam Bankman-Fried. This man will be at the heart of the next crypto disaster.
Standing on the mountaintop (Coinbase, 2021)
In April 2021, Coinbase completed its IPO with a valuation of $100 billion. Shortly afterward, I was recruited into their corporate development and venture capital team.
My job was sitting next to people doing M&A, investing in early-stage crypto startups, writing industry articles, and hosting that short-lived Coinbase podcast. It was one of the most interesting rooms I'd ever been in, and it often gave me this feeling:
(The original photo was taken at Coinbase headquarters.)
This was also the period when the second speculative bubble was forming—around a type of digital artwork called NFT.
If DeFi is the domain of professional traders, NFTs are more appealing to the average person. They offer artists a new way to monetize online and demonstrate potential as a standard for online property rights.
But like early tokens and DeFi Summer, NFT speculation quickly spiraled out of control.
Digital images of cartoon monkeys, "punk," and penguins began selling for $1 million each. An artist named Beeple pieced together a bunch of images into a single work, which fetched an absurd $69 million at Christie's.
Crypto culture is everywhere. Larry David mocked crypto skeptics in a Super Bowl ad. Sam Bankman-Fried's exchange FTX spent $135 million to buy the naming rights to the Miami Heat's home arena.
Everyone is getting rich through tokens, NFTs, and stocks.
This is a repeat of the madness of 2017. Fueled by record-breaking money printing, the bubble is almost four times the size of the last one.
Liquidation (2022)
But soon, the flywheel began to detach.
Interest rate cuts, money printing, and economic stimulus that pushed up all asset prices ultimately seeped into consumer goods prices.
Bitcoin, Ethereum, Nasdaq, and S&P all peaked at the end of 2021. At that moment, everyone saw clearly: inflation was out of control, and central banks had to take the opposite approach, withdrawing one by one the policies that had been used to distribute stocks and push crypto to all-time highs.
With interest rate hikes and fiscal austerity measures in place, everyone is starting to feel uneasy about the assets they bought at high prices.
Maybe the monkey picture isn't worth a million dollars. Maybe Sushi shouldn't be worth $3 billion. Maybe Dogecoin isn't worth $90 billion.
Then, everything started to fall apart.
If the cryptocurrency frenzy most resembled the 2001 dot-com crash, then what followed was more like the 2008 financial crisis. Several toxic assets, coupled with high leverage, nearly dragged down everything even remotely related to it.
The first toxic asset was Terra's UST stablecoin.
Most mainstream stablecoins (USDC, USDT) simply use cash and government bonds as reserves. UST, however, uses a complex algorithm to maintain its peg. This mechanism works when the market is good, but it collapses when the market experiences a sell-off.
$32 billion evaporated in a few days. Those who thought they owned it woke up to find they had nothing.
Then, a $10 billion hedge fund called Three Arrows Capital went bankrupt—it had heavily invested in Terra and over-leveraged across the industry.
Three Arrows borrowed a large amount of money from cryptocurrency lending platforms Celsius and Voyager. These platforms used user deposits to make loans, pursuing a "safe" 8% return. Three Arrows suffered a margin call, the platforms froze withdrawals, filed for bankruptcy, and dragged retail investors' deposits down with them.
At Coinbase, we watched as FTX and Sam Bankman-Fried stepped in to bail out bankrupt lending platforms like BlockFi.
He was hailed as the "JP Morgan of the crypto world," the industry's white knight.
But the truth is, SBF and FTX themselves are the ones with the largest risk exposure.
Remember when FTX bought the naming rights to the Miami Heat's home arena? That deal, and the entire SBF empire, was propped up by FTX's newly printed token—FTT. SBF used FTT as collateral to borrow huge sums of money. When the price of FTT crashed, the loans were foreclosed, and FTX went bankrupt.
Worst of all, FTX had been misappropriating customer deposits for investments and to cover various financial losses. This company, once valued at $32 billion, collapsed within a week, with $8 billion in customer funds vanishing.
SBF violated the fundamental rule of exchange operations: never touch your customers' money.
This is the encrypted Lehman moment.
Election and Casinos (2023-25)
After FTX crashed, SBF went to jail. The crypto market plummeted from $3 trillion to below $1 trillion in 12 months.
Next, the Biden administration took steps to strangle the industry within the United States.
The SEC, led by Gary Gensler, has sued almost all compliant companies in the country for violating securities laws.
Coinbase, Kraken, Uniswap, and Robinhood have all received enforcement notices. Companies that have spent years diligently operating legally have become the SEC's primary targets.
Meanwhile, Elizabeth Warren secretly pressured banks to abandon crypto clients, cut off banking access to the industry, and relocate their teams overseas.
This approach has had several unexpected consequences.
First, launching anything with a business model in the crypto space (such as DeFi) will be classified as a security and could be subject to prosecution at any time.
Therefore, the safest legal option became issuing "Meme Coin," a token with no clear purpose.
On a platform called Pump.fun, millions of meme coins were launched. Iggy Azalea, Caitlyn Jenner, and Hawk Tuah all issued their own meme coins. Without exception, they were all disasters.
Crypto has another casino, and it's bigger than the last one. Over 6 million memes have been issued. This sector peaked at $150 billion by the end of 2024, surpassing even the size of the NFT bubble in dollar terms.
Second, for the first time, the industry underwent a political mobilization. Several leading companies injected tens of millions of dollars into PAC, which supports encryption, and launched an organized lobbying effort in Washington.
Third, Donald Trump saw an opportunity. He promised to fire Gensler, end bank hostility, and turn the U.S. into the "crypto capital of the world," successfully turning the newly mobilized industry into a campaign asset. Many believe that it was the crypto voters who helped him win the election.
Then, three days before his inauguration, Trump launched a Meme coin: $TRUMP. His wife also launched one: $MELANIA.
This is the most outrageous thing I've seen in my eight years in the industry. Ironically, $TRUMP marked the end of the Memecoin bubble—it drained all other liquidity, followed by the collapse of the entire Memecoin market.
Towards Institutional Development (Crossmint, 2025-26)
Putting aside that awkward episode, the industry's bet on Trump still won.
Bitcoin hit a new high the moment Trump's victory seemed assured. The market had already priced in the fact that the world's largest economy was shifting from hostility to friendliness towards crypto.
Gensler resigned. The new SEC withdrew its lawsuit against U.S. crypto companies. Banks can once again access the industry.
Most importantly, the GENIUS Act was passed in July 2025—the first major federal-level crypto legislation in the United States, which sets clear rules for stablecoins.
Washington is sending a clear signal to institutions: crypto, especially stablecoins, is about to become big business.
Stablecoin companies like Bridge and BVNK were acquired by Stripe and Mastercard at valuations exceeding $1 billion. Rain completed a Series C funding round of approximately $2 billion. My former employer, Circle, the company behind USDC, IPO'd in June 2025, reaching a peak valuation of $60 billion.
By then, I was the head of marketing at Crossmint. We had struck a deal with MoneyGram to help this century-old remittance giant use stablecoins for cross-border money transfers.
Crossmint @crossmint · September 18, 2025 Breaking News: @MoneyGram, serving 50 million users in 200 countries worldwide, is adopting stablecoins. This is supported by the Crossmint wallet and stablecoin infrastructure. This is the future of cross-border finance.
As the benefits of "tokenizing" the dollar become clear, Wall Street is starting to take the tokenization of other assets seriously.
Even Larry Fink has changed his tune. He once called Bitcoin a "money laundering index." Now, the CEO of BlackRock, which manages $14 trillion, calls tokenization "the next generation of markets," predicting that all stocks, bonds, and asset classes will eventually run on the blockchain.
An Unforeseen Revolution (In the Present)
Eight years have passed since my Reddit post, and we still don't have a decentralized Uber.
Blockchain has not eliminated all intermediaries, and fully decentralized currencies have not replaced government-issued fiat currencies.
But I believe that in retrospect, this period will be remembered as the early, chaotic years of a completely new internet finance system.
Every boom and bust cycle refines that infrastructure. This infrastructure has the potential to reshape global finance and deliver it to anyone with an internet connection.
Token financing proves that companies can raise money from anyone in the world.
DeFi has proven that trading and lending can run purely on code (see @HyperliquidX and @pendle_fi).
NFTs laid the foundation for internet property rights.
Even the dumbest round—Memecoin—proved that this underlying network could withstand massive global transactions.
If you replace it with non-fungible assets such as stocks, bonds, and real estate, and add a clear regulatory framework, the migration of the entire financial system will then be a natural progression.
Critics can try to ignore all of this. But the data on stablecoins is the hardest to refute.
The current stablecoin supply exceeds $300 billion, with a projected settlement volume of $33 trillion by 2025. So far this year, over $40 trillion has been settled, and the supply is expected to reach $100 trillion.
Skeptics will say that a large part of this is crypto trading and bot activity. That's true. But the sheer scale is there, and the US government is showing you which way it's headed.
One crucial but somewhat convoluted point is that stablecoins are backed by U.S. Treasury bonds, which are debts issued by the U.S. government.
Every stablecoin issued creates new demand for US debt, which is exactly what the US government needs right now. For this reason, the Treasury Secretary has made stablecoin growth a strategic priority for the United States.
Recent reports predict that stablecoins could grow into a $3.7 trillion market by the end of this century. With the passage of the GENIUS Act, this scenario is becoming increasingly likely. A thriving stablecoin ecosystem would drive private sector demand for U.S. Treasury bonds…
Where does the road lead?
AI is changing everything, and encryption is no exception.
The marriage of crypto and AI has begun. Millions of AI agents will soon be completing transactions in the real world. They will connect with merchants in over 200 countries using stablecoin-backed cards. They will also trade directly with each other using crypto wallets and stablecoins.
It's practically a certainty that an intelligent agent will be there to shop for us, manage our finances, and conduct transactions on behalf of the entire company.
Looking further ahead, we will see business models driven entirely by intelligent agents, with humans no longer involved in the closed loop. Imagine a hedge fund: it reads every SEC filing, builds its own models, and trades on its own, without any analysts or fund managers in sight.
As this sci-fi future gradually comes to life, encryption will become mainstream by integrating with, rather than replacing, existing systems.
The backend will be encrypted. The frontend will look exactly like what people are already using. Most people won't even notice.
Institutions will replace decades-old infrastructure. Startups will launch financial products globally with unprecedented speed and reach. The end result is a 24/7 financial system that works equally well for people in Nigeria and people in New York.
From here, another million innovations will emerge.
Looking back at these predictions eight years from now, will they be as embarrassing as looking back at my old article today? We'll see.
