Author: Connor Dempsey

Translation: Jiahua, ChainCatcher

The crypto revolution has indeed happened, but it is 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 currency would be replaced by decentralized currency. Blockchain would eliminate the rent-seeking intermediaries between every transaction. Power would shift from corporations to users.

None of this has really happened. But other things have occurred.

By now, I have spent eight years at four crypto companies: @circle, @MessariCrypto, @coinbase, @crossmint.

I have watched this asset class grow from less than $1 billion to over $40 trillion, experiencing several speculative bubbles and a crisis that nearly led to a systemic collapse. I have found that what this industry has truly built is much more interesting than predicted back then.

Before starting my fifth job, I want to document these eight years. I also want to discuss where I think it will go next.

False Prosperity (2017-18 Token Issuance Mania)

In early 2017, I stumbled upon an explanation of Bitcoin in a book, and that’s how I got hooked. Not long after, I read all the relevant books I could find, then made a plan: to go to Singapore to specifically write a blog documenting this fascinating new technology.

At that time, I didn’t know I was at the tail end of a massive speculative bubble surrounding "early token financing." This model allowed anyone to raise funds online for an idea by selling digital tokens to investors.

Ethereum was the main battlefield of it all.

In November 2017, I published a simplified Ethereum guide that went viral on Reddit. It happened right at the peak of the bubble, which burst a month later.

Looking back at that article now, it feels more like a time capsule—encapsulating the optimism of that year while prophesying a future that never arrived.

Predictions of That Year

The core argument of the article: blockchain networks like Ethereum could be used to build a new type of consumer application.

The value created by most consumer applications (like Facebook and Uber) flowed to large companies and a few investors. The value created by these new applications would be shared among early participants (and early token investors).

The article imagined building a "decentralized Uber" with Ethereum, where early users and drivers could earn tokens for each trip completed, thereby owning a part of the network. This would reward those early believers who helped kickstart the network more fairly.

On paper, it was an admirable goal. But this decentralization revolution ultimately took a big tumble.

What Actually Happened

A speculative frenzy reminiscent of the 2001 internet bubble.

Ethereum proved to be the most efficient crowdfunding platform in history. Over 3,000 token issuance projects raised $22 billion from investors all over the world.

However, like in 2001, the underlying technology could not support the outrageous valuations placed on those application scenarios.

Worse, this model disrupted the normal incentive mechanisms between investors and builders. Builders could raise $10 million overnight just for having an idea.

Investors received tokens as returns, which only increased in value when the project was completed. But the builders themselves retained tokens that could be liquidated for wealth from day one, thus losing their motivation to build useful products.

Founders and early investors made a fortune, while inexperienced investors got buried. Though there were sincere individuals wanting to get things done, this model unfortunately became a breeding ground for greed, fraud, and exploiting the naive.

It was no different from every speculative bubble in the past few hundred years.

Building in the Ruins (Circle, 2018-19)

The wallet was deflating day by day. Using the small fame I had gained on Reddit, in early 2018 I got an entry-level marketing job at Circle.

At that time, Circle was four years old. They had a set of unprofitable consumer applications (investing, payments, trading), as well as an over-the-counter trading desk quietly printing money to keep the company running.

For the next two years, the entire industry swayed in the hangover of the token frenzy. Most projects were abandoned, most tokens went to zero. The atmosphere was terrible.

But at this moment, the seeds for the next crypto resurgence were being sown.

This time, the focus was no longer on consumer applications, but on reshaping finance with the internet.

US Dollar and DeFi

Dollar-backed "stablecoins" were initially designed to allow traders to easily switch between crypto positions. They pegged their value to $1 with a 1:1 backing of dollars and treasury reserves.

Tether's USDT was the first to take off during the token frenzy, with dollar reserves rapidly increasing in overseas bank accounts.

Though initially aimed at trading, stablecoins held tremendous value for those who wanted to hold dollars but couldn't enter the traditional banking system.

For example, for individuals looking to evade capital controls. For wealthy Chinese wanting to diversify their assets. For Argentinians and Turks fleeing inflation.

In 2018, Circle partnered with Coinbase to launch a compliant U.S. version: USDC. Early use was mainly for trading, but some began to predict that this new-type internet dollar would allow anyone online to access dollar services 24/7.

Meanwhile, among the projects surviving from the token era, almost all were related to finance.

Since Ethereum could be used for financing, it could also be used to rebuild other foundational components of financial markets. Trading protocols (Uniswap), lending protocols (Aave, Compound), later known as "decentralized finance," or DeFi.

Stablecoins and DeFi were bound to converge. What propelled them to the stratosphere was a once-in-a-century pandemic.

Rugged Growth Resurfaces (Messari, 2019-2021)

At the end of 2019, I joined a 13-person data research startup called Messari as their first full-time marketer.

The company had a four-person analyst team conducting cutting-edge research in the DeFi space. 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 paralyze the global economy. All markets plunged.

The response from central banks was to inject trillions into the global economy to prevent a collapse. By the end of 2020, $9 trillion had been injected.

This money needed a place to go. With everyone stuck at home, a massive influx of capital flowed into Bitcoin, Ethereum, DeFi, and various speculative assets.

Bitcoin skyrocketed from less than $4,000 to nearly $70,000, propelled by institutional investors, surpassing a trillion in market cap, outperforming gold and all other macro assets.

Connor Dempsey Central banks continue to print money, sending all markets to the moon, while also telling the world one thing: non-depreciable currency has its place in this world.

#Bitcoin ran at the fastest speed, surging over $1 trillion, beating all other macro assets.

These conditions further birthed what was called "DeFi Summer," with the total value of DeFi protocols surging 250 times to $180 billion.

DeFi was supposed to rebuild traditional finance. But "DeFi Summer" resembled a large online game, where players were a group of profit-driven traders, wagering billions of dollars.

The game was called liquidity mining. Anonymous developers launched new protocols, mostly thematically based on food.

YAM Finance, Spaghetti Money, SushiSwap. Traders deposited existing tokens (ETH, USDC, USDT) to earn newly minted tokens. $YAM, $SPAGHETTI, $SUSHI.

The entire process was both absurd and remarkable. Once the protocol was launched, newly minted tokens could reach a market cap of $1 billion within days. Then early participants would sell off, crashing the tokens.

This was the true Wild West era.

Similar to the previous token frenzy, DeFi Summer created a number of millionaires before collapsing in on itself.

It also created a billionaire—his name was Sam Bankman-Fried. This person would become the center of the next disaster in crypto.

At the Peak (Coinbase, 2021)

In April 2021, Coinbase completed its IPO with a valuation of $100 billion. Shortly after, I was recruited into their corporate development and venture capital team.

My job involved sitting alongside those who handled mergers and acquisitions and invested in early crypto startups, writing industry-themed articles, and producing the short-lived Coinbase podcast. This was one of the most interesting rooms I had worked in, often leaving me with this feeling:

(The original photo of the author at Coinbase headquarters)

This was also the period when the second speculative bubble took shape—around a new type of digital asset called NFT.

If DeFi was the domain of professional traders, NFTs were much more appealing to the average person. They provided a new way for artists to monetize online and demonstrated the potential of internet property rights standards.

But like early tokens and DeFi Summer, NFT speculation quickly spiraled out of control.

Cartoon monkeys, "punks," and digital images of penguins began selling for $1 million each. An artist named Beeple compiled a bunch of images into one piece, auctioning it for a ridiculous $69 million at Christie's.

Crypto culture was everywhere. Larry David mocked crypto skeptics in a Super Bowl ad. Sam Bankman-Fried's exchange FTX spent $135 million on the naming rights for the Miami Heat's home court.

Everyone was getting rich from tokens, NFTs, and stocks.

This was a replay of the madness in 2017. Catalyzed by record money printing, the size of the bubble was about four times that of the previous round.

Liquidation (2022)

But soon, the flywheel began to come apart.

The interest rate cuts, money printing, and economic stimulus that drove up all asset prices eventually seeped into consumer goods prices.

BTC, ETH, Nasdaq, and S&P all peaked at the end of 2021. At that moment, everyone saw clearly: inflation couldn’t be suppressed, and the central bank had to reverse course, withdrawing the policies that had previously sent stocks and crypto to all-time highs.

Under the pressure of rising interest rates and fiscal tightening, everyone looked at the assets they had bought at high prices, and started to feel apprehensive.

Maybe monkey images weren't worth a million. Maybe SUSHI shouldn't be worth $3 billion. Maybe Dogecoin wasn't worth $90 billion.

Then, everything started to collapse.

If the token frenzy resembled the 2001 internet crash, what followed was more akin to the 2008 financial crisis. A few toxic assets, amplified by high leverage, nearly dragged down everything associated.

The first toxic asset was Terra's UST stablecoin.

Mainstream stablecoins (USDC, USDT) were simply backed by cash and treasury bonds. UST relied on a complex algorithm to maintain its peg. When the market was good, this mechanism worked; when the market sold off, it exploded.

$32 billion evaporated in a matter of days. Those who thought they held it woke up to find nothing in their hands.

Then, a $10 billion hedge fund called Three Arrows Capital went bankrupt—it had heavily invested in Terra and was over-leveraged throughout the industry.

Three Arrows borrowed heavily from crypto lending platforms Celsius and Voyager. These platforms used user deposits for loans, seeking a "safe" 8% return. When Three Arrows collapsed, the platforms froze withdrawals, filed for bankruptcy, and dragged retail deposits down with them.

At Coinbase, we watched as FTX and Sam Bankman-Fried stepped in to rescue bankrupt lending platforms like BlockFi.

He was hailed as "the J.P. Morgan of crypto," the white knight of the industry.

But the truth was, SBF and FTX were the ones with the largest risk exposure.

Remember how FTX bought the naming rights for the Miami Heat home court? That deal, along with the entire SBF empire, was propped up by tokens printed out of thin air—FTT. SBF used FTT as collateral to secure huge loans. When FTT's price crashed, the loans were called in, and FTX went bankrupt.

Worst of all, FTX had been misappropriating customer deposits for investments and to fill various holes. This company, once valued at $32 billion, collapsed within a week, leaving $8 billion of customer funds missing.

SBF violated the fundamental rule of exchange operations: do not touch customer funds.

This was crypto's Lehman moment.

The Election and the Casino (2023-25)

After the collapse of FTX, SBF went to jail. The crypto market fell from $3 trillion to below $1 trillion within 12 months.

Next, the Biden administration moved to strangle this industry in the U.S.

The SEC, led by Gary Gensler, sued almost all compliant companies domestically, claiming violations of securities law.

Coinbase, Kraken, Uniswap, and Robinhood all received enforcement notices. Those companies that spent years working to operate legally became the primary targets of the SEC.

Meanwhile, Elizabeth Warren secretly pressured banks to abandon crypto clients, cutting off the industry’s banking channels and driving teams overseas.

This approach led to several unexpected consequences.

First, launching anything with a business model in crypto (like DeFi) would be classified as a security, making it subject to lawsuits at any time.

Thus, the legally safest option became issuing "meme coins," a type of token with no clear purpose.

A platform called Pump.fun launched millions of meme coins. Iggy Azalea, Caitlyn Jenner, Hawk Tuah girls, all launched their own meme coins. Unsurprisingly, all were disasters.

Crypto once again became a casino, and this time it was even bigger. Over 6 million meme coins were launched. This sector peaked at $150 billion by the end of 2024, surpassing the scale of the NFT bubble in dollar terms.

Second, the industry engaged in political mobilization for the first time. Several leading companies injected tens of millions into pro-crypto PACs and began organized lobbying in Washington.

Third, Donald Trump saw an opportunity. He promised to fire Gensler, end the hostility from banks, and turn the U.S. into a "global crypto capital," successfully converting the newly mobilized industry into a campaign asset. Many believe 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 was the most ridiculous thing I had seen in my eight years in the industry. Ironically, $TRUMP marked the end of the meme coin bubble—it sucked all other liquidity out, followed by the collapse of the entire meme coin market.

Towards Institutions (Crossmint, 2025-26)

Setting aside that awkward episode, the industry's bet on Trump ended up winning.

At the moment Trump seemed poised for victory, Bitcoin hit a new high. The market had preemptively digested the fact that the world's largest economy would shift from hostility towards crypto to a friendly stance.

Gensler resigned. The new SEC withdrew lawsuits against U.S. crypto companies. Banks could reconnect with the industry.

Most importantly, the GENIUS Act was passed in July 2025—the first significant federal crypto legislation in the U.S., establishing clear rules for stablecoins.

The signal Washington sent to institutions was clear: crypto, especially stablecoins, was about to become big business.

Stablecoin companies like Bridge and BVNK were acquired by Stripe and Mastercard at valuations exceeding $1 billion. Rain completed about $2 billion in Series C funding. My former employer, Circle—the one behind USDC—IPO-ed in June 2025, with peak valuation reaching $60 billion.

At this time, I had already become the head of marketing at Crossmint. We struck a deal with MoneyGram to help this century-old remittance giant use stablecoins for cross-border funds transfer.

Crossmint @crossmint · 2025/9/18 Major announcement: @MoneyGram, serving 200 countries and 50 million users, is adopting stablecoins. Supported by Crossmint wallet + stablecoin infrastructure. This is the future of cross-border finance.

As the benefits of "tokenizing" dollars became clear, Wall Street began to take tokenization of other assets seriously.

Even Larry Fink changed his tune. He once labeled Bitcoin as a "money-laundering index." Now this CEO of BlackRock, managing $14 trillion, referred to tokenization as "the next generation of market form," predicting that all stocks, bonds, and asset classes would eventually be traded on blockchain.

The Revolution We Didn’t Predict (Present)

Eight years have passed since my Reddit article, and we still do not have a decentralized Uber.

Blockchain hasn't eliminated all intermediaries, and completely decentralized currency hasn't replaced government-issued fiat currency.

But I believe that looking back in the future, this period will be remembered as the early chaotic years of a completely new internet financial system.

Every boom and bust has been refining that infrastructure. This infrastructure has the capability to reshape global finance, bringing it to anyone with an internet connection.

Token financing proved that companies could raise funds from anyone globally.

DeFi demonstrated that trading and lending could purely run on code (look at @HyperliquidX and @pendle_fi).

NFT laid the groundwork for internet property rights.

Even the most foolish phase—meme coins—proved that this underlying network could withstand massive global transactions.

Transforming it into stocks, bonds, and real estate, combined with a clear regulatory framework, will make the migration of the entire financial system a smooth transition.

Critics can try to ignore all this. But the data on stablecoins is the hardest to refute.

Currently, there is over $300 billion in stablecoin supply, with $33 trillion in settlements completed in 2025. So far this year, over $40 trillion has been settled, with expectations to hit $100 trillion.

Skeptics might argue that a large part of this is from crypto trading and bot activities. That’s true. But the size alone tells a story, and the U.S. government is indicating the way forward.

One key point, though a bit convoluted: stablecoins are backed by U.S. treasuries, which are debts issued by the U.S. government.

Every stablecoin issued creates a new demand for U.S. debt, which the U.S. government currently needs the most. For this reason, the Treasury Secretary has listed the growth of stablecoins as a strategic priority for the U.S. :

A recent report predicts that by the end of the century, stablecoins could grow into a $3.7 trillion market. With the passage of the GENIUS Act, this scenario becomes increasingly likely. A prosperous stablecoin ecosystem will drive the private sector's demand for U.S. treasuries...

Where Do We Go From Here?

AI is changing everything, and crypto is no exception.

The marriage of crypto and AI has begun. Millions of AI agents will soon complete transactions in the real world. They will interact with merchants in over 200 countries using stablecoin-backed cards. They will also transact with each other directly using crypto wallets and stablecoins.

Agents that shop for us, manage finances, and conduct trades on behalf of entire companies are basically a done deal.

Looking further ahead, we will witness commercial models entirely driven by agents, without human involvement in the loop. Imagine a hedge fund: it reads every SEC filing, builds models itself, trades itself, and you see not a single analyst or fund manager.

As this sci-fi future gradually comes to fruition, crypto will go mainstream by integrating with the legacy systems rather than replacing them.

The backend will be crypto. The frontend will look exactly like what people are already using. Most people won't even notice.

Institutions will replace outdated infrastructures that have been in use for decades. Startups will launch financial products globally at unprecedented speed and coverage. The ultimate result will be a 24/7 operational financial system that works equally well for people in Nigeria and those in New York.

From this starting point, countless innovations will emerge.

In eight years, looking back at these predictions, will it feel as embarrassing as I do when reflecting on my old article? We shall see.

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