Two things are true right now. First, the crypto industry has won. It has enough of a foothold in the world that it’s not going anywhere, and it will eventually reach everything. Second, the vibes are awful, because nothing is proceeding as expected.

The oldheads of this space got used to a rough script of good times and bad times, and this particular good time is not good in the way it “should” be if the old patterns held. And a fresh bad time might have already begun.

Crypto denizens begged for permission to get into brokerage accounts in the form of exchange-traded products. They got it. Now BlackRock is at the party. For Bitcoin, there is no going back and there is no fading away.

But it’s clear now that the market is not following the old script. Everything is changing. Correlation across tokens has fallen apart. Coins don’t moon like they did. Zcash.

In my first draft of this post I wrote that it’s all over but the shouting. I think that’s true. The trouble is I think there’s also a fair amount of crying ahead, even among those who really have placed their bets on a future in which money decentralizes, breaks free of politicians and doesn’t spy on its owners.

The crypto industry has crossed the horizon we’ve all been staring at for years. It’s in a new land.

The thing about horizons — what makes them horizons — is that you don’t know what’s on the other side. But crypto has crossed a horizon that’s something like what the internet crossed over in the DotCom bust.

Decentralized networks of money have become wired directly into the real economy, but most people still don’t really understand what that means, how it might be useful to them or what they might end up doing with it. None of that matters. What matters is that there is no going back.

Yes, of course, your aunt does not understand what you do and news outlets in the NPR strain won’t let up with making bad faith culture war implications, but none of that changes the now established fact that Bitcoin has been vetted and deemed worthy. The critics are shouting at your backs now, but you can’t see you’ve passed them by because your eyes are clouded with cope.

But take a moment.

Rejoice, frens. You did it.

One of the reasons I wanted to launch this newsletter was because I’ve been covering the space long enough that I’ve come to have certain convictions of my own. I sat down and tried to articulate some of those that feel the most important to me.

1. Bitcoin is king

Bitcoin had an immaculate conception. It was able to achieve the level of leaderlessness and decentralization it has only because no one cared about it for so long.

It’s not possible to launch a network like Bitcoin again, because people will care. That’s a problem.

We saw that back when Grin launched in 2019. They tried to kick off with that same anyone-can-get-in spirit that Bitcoin did, but too many people with too much money threw down to game the launch. It wrecked the party. You’ve probably never even heard of Grin.

But because Bitcoin had that immaculate conception, because it laid out the core, fundamental, very good ideas of this space, it will always rule. Never bet against Bitcoin.

There will be other good bets to make, but betting on ”the next Bitcoin” will always be a bad one. There will never be another Bitcoin.

1. Bitcoin and Ethereum are the only blockchains the world needs

Bitcoin does unstoppable money.

Ethereum does programmable money.

Other chains are skunk works for functionality the big two can absorb whenever they need to.

It’s Coke and Pepsi. Iphone and Android. Arnold and Stallone. The world likes pairs at the helm. The other blockchains are fun, often very cool, but none of them are essential.

Fred Wilson recently wrote that he takes the chains seriously that have a real developer community and users. I agree. But I suspect all the best ideas will eventually be ported onto the big two.

And my bet is that the big two aren’t going to change.

1. Dollar-cost averaging is the way, the truth and the light

Dollar-cost averaging is the strategy of investing regularly in something without thinking about it.

Think of it as casting a magic spell. A magic spell is a way of telling the universe what you want and trusting the universe to give it to you. Dollar-cost averaging is that spell.

Bitcoin is an index for money that can’t be stopped. Ethereum is an index for money that can be programmed. In times of uncertainty, ask yourself how much you believe in each thesis long term and DCA accordingly.

Buying low and selling high expresses doubt. Investors who actually believe just buy and hold. Everyone knows that none of us are smart enough to time any market. Anyone who has done it just got lucky: full stop.

Non-professionals shouldn’t invest more than they can afford to lose, but a responsible investor also shouldn’t really think much about their investments either.

Conviction means buying on the reg and letting it ride.

1. It’s a wonderful world out there, but encrypt your files

No one avoids the surveillance economy until it’s too late and they learn their lesson. Scammers can get very creative using innocuous data to steal your property.

Assume the worst of every digital service that starts asking you questions. Once it’s digitized, it never goes away. In fact, your data gets endlessly replicated out there like disembodied zombies that will come back and eat your brains.

Secure everything and obfuscate against Sauron, because you won’t just confuse Sauron. You’ll also confuse the evil gremlins that raid Sauron’s files in order to get at you.

And don’t forget to back up your actual private keys using a seed phrase in an analog fashion, make more than one copy and hide them all well.

Satoshi gave us a way to actually hold onto digital money ourselves, but Bitcoin’s greatest feature is also a bug: personal responsibility. At the end of the day, users’ fates are in users’ hands.

Many will make the pitch that they can steward keys better than individuals can. A lot of assets have gotten lost that way.

1. Weird Crypto is good

Just because Bitcoin can’t be replicated, that doesn’t mean there won’t be lucrative new ideas.

CryptoPunks, Dogecoin, Yearn Finance and Pump.fun all sounded very weird early on. In time, people could see each one’s real value, but by the time weird projects become legible, it’s too late.

There’s lots of reasons to walk away from a new crypto project, but the fact that it’s really bizarre is not one of them. Because...

1. Boomer Crypto is bad

Weird Crypto is sneaky, but Boomer Crypto is easy to spot.

Proponents for Boomer Crypto all have a similar vibe. They want to take this weird and out of control industry and build something a little more professional.

Blockchain, but make it useful for banks. Crypto, but make it really fast at any cost. Digital assets with corporates pegged to the rollout. All that is Boomer Crypto.

Back in 2017 the original Boomer Crypto mantra was “Blockchain not Bitcoin.” That way of thinking wasted tens of millions of dollars.

If you’re a builder that really wants to work for Accenture, then just go work for Accenture.

1. Armies make blood money

Aggro fanboys on social media are monetized brigading. If an asset is so great then it doesn’t need an infantry. The market will just hit ‘BUY.’

There is no ethical consumption under bully economies.

1. Trend chasers make money but not memories

In this space, originals become billionaires but copycats become millionaires. It’s not fair, but it is so.

To make a quick buck, chase trends. But to make another world, dollar-cost average into and build upon the stuff that matters now.

1. The trough of disillusionment is a buying opportunity

Good ideas never die, but they do hibernate. It is possible to be too early (see: Augur vs. Polymarket)

Case in point: NFTs are here to stay (memecoins too).

Legends are born amidst the doldrums.

1. Stablecoins will bring down nation-state currencies

Whole nations will switch to stablecoin-based economies. Not central bank digital currencies, but stablecoins. Once the people do that, the mechanisms those states have to control their populace will diminish.

Opening up alternatives for people is like passing around a bit of discount freedom. It’s not the same as real freedom, but it’s better than name-brand tyranny.

Self-custody is the greatest feature of cryptocurrency. Censorship resistance is the second, but a very close third is: exit. The option to exit from a monetary system is not one that will be exercised very often, but it’s nice to have. Keeps sovereigns honest.

Money has always found a way, but now it’s got highways.

1. Conviction is profitable, belief is recursive and zealotry is whackadoo

A blockchain koan.

1. No one is shut out and no one has to be left behind

There’s a lot of folks out there who get bitcoin (or ether or et cetera) but don’t buy out of some weird principled stand. To those folks: have fun with that.

For everyone else, it really is still early.

And when I meet people who tell me that they are into crypto but haven’t bought any BTC at all, a part of me dies inside.

(The worst part is that lot always seems to have XRP — see #6.)

1. There will be no ‘next Bitcoin’

Did I say that one?

When I decided to launch this newsletter, I thought I would be launching it into the triumph of crypto. Maybe one day we’ll realize that I did, but that doesn’t change the fact that everyone here is depressed. Bitcoin may have hit its final all-time high for a while and it didn’t even double over the best price from 2021.

What a bummer!

But this past week I’ve seen a fierce debate among thoughtleaders about what’s been built, what’s good and what’s selling for the right price.

Now on the far side of the horizon, the air is cleaner, the sky more blue, but just past the edge of the beach there is nothing but miles of trees.

Past the trees, in the distance, there are mountains, but the mountains are so far off, it’s anyone’s guess how to reach them.

And no one knows what’s lurking in that forest or hiding in the mountain caves.

On the other side of this new horizon, there are new opportunities, new pitfalls and all kinds of new dangers.

There are new monsters on this side of the horizon, but there’s riches ahead, too. It’s not a casino on easy mode any longer. Now it’s a slog.

The fact that the cryptoletariat is so cynical right now smacks of entitlement. But we were promised crazy gains!

Here’s the trouble with that though. For a decade the industry has been selling a vision. That vision has been slow to sell because its most compelling features (censorship-resistance! self-custody! exit!) just aren’t that compelling 999 days out of 1,000.

Now on that 1,000th day? Dang. But most of the time? Not so much.

So, in the meantime, it had to actually deliver products built on some of its more immediately salient features, like global speed, openness, trustlessness/reliability and universal access to the almighty U.S. dollar.

Building products that really deliver on those features, though, takes a lot more time than visionary rhetoric. So, a period of reckoning is underway.

What does that feel like to the rank and file? It feels like wandering without a compass in unmapped territory. Folks are lashing out because they feel tired, alone and scared about monsters.

“Silicon Valley was raised on exponentials, while Wall Street was raised on linearity. And over the last few years, crypto’s center of gravity has migrated from Silicon Valley to Wall Street. You can feel it.” —Haseeb Qureshi, Dragonfly Capital

Amidst this present mood of malaise, a debate has broken out among some prominent voices. Below, I’ll summarize some of the crucial broadsides wheatpasted along the mean streets of Crypto Twitter.

The debate that’s underway right now is about a lot of things. On the surface, it’s about the invective directed at a new blockchain, Monad. There has been a looming question in the space for some time: whether there is a good reason to build new blockchains any longer.

It’s also about the fact that the charts have been moribund, that institutional money coming in was supposed to create and sustain a boom. And it’s also about an age old question in the space: How to correctly value this immaterial, everywhere-and-nowhere substrate of value?

Back in August, one of the small players in the conversation, Arca, stepped in to offer a balance of optimism and critique. Arca’s Jeff Dorman has always been a business sensible blockchain guy. He likes projects that make money.

His take: Most valuations of major chains are insane right now, not at all justified by multiples of their revenue. His most charitable bet is that the market expects that one or some of these chains will be the new vehicle for exchanging the biggest real world assets, like stocks, bonds and slivers of property.

So the question folks need to ask now is how soon those assets will move on chain and which chains are most likely to host them?

Santiago Roel Santos, who you may know from the Empire podcast, but also a longtime investor, currently running Inversion, has done a series of posts making a very similar point. The one that probably got the most attention, though, was where he pointed out that there’s thismyth that Amazon didn’t make any moneyearly on.

As he points out, though, it actually did.

He adds a new wrinkle to Dorman’s narrative, arguing that the valuations are often based on the assumption that revenues in the best days will persist. When, in fact, people using these networks are as volatile as the token prices. He wants to see folks re-indexing for applications and not infrastructure.

Give people things that are useful enough to them that they will pay.

And Crucible Capital ’s Meltem Demirors has taken Santos’ doubts even further, with her hard bear take.

“Most [of these networks] are zero to net negative value creation so instead of pricing infinity upside people are pricing reality,” she wrote. “Also equities and gold outperforming coins so why risk it?”

Then Arthur Hayes comes in. Hayes is a legend. He co-founded BitMex. He ran afoul of the law. He loves stuffed animals. Now, he orchestrates investors

Hayes is also, most notably, the inventor of perpetual futures, or perps. Perps make it extremely easy to take leveraged bets in crypto while decreasing logistical friction. Hayes predicts that perps are going to eat the world. Another way to read that: crypto innovations are coming for everything. Get ready or go to bed.

Which is sort of what Haseeb Qureshi, of Dragonfly Capital, stepped in to say as well.

TL;dr of Qureshi’s take: Never mind the bollocks, we’re going exponential.

He drew a comparison between crypto now and the notion of ecommerce back in the day. Early on, people thought ecommerce would maybe only be good for certain verticals. Even its investors didn’t believe ecommerce would eat everything. But it did.

As Qureshi put it in his post, “When it comes to truly exponential technologies, no matter how big you think it’s going to get, it just keeps getting even bigger. This is the thing that Silicon Valley has always understood better than Wall Street.”

Which, like: sure.

Fine.

But, is everything going exponential or are things going exponential? That’s the question someone who’s still working in the token salt mines have to ask themselves. If coins don’t correlate any longer, which ones will make it?

Polkadot going exponential will be cold comfort to anyone all in on Avalanche.

In fact, Santos re-entered the chat to say exactly that. Today, the hivemind expects results. Doing exceptionally well in the coming years will require rewarding projects that position themselves to actually make money, but to do so before they are really making money.

That will be difficult. Many will build businesses, but they won’t all be the right ones.

What the market expects of this stack is different, now, and tossing around lots of little bets for one to pop like wild for easy money isn’t going to work any longer.

Those who didn’t get a good piece of that action are mad and acting out.

But, at the end of the day, everything is fine. The community has gotten very big and now it’s fighting about how to understand itself after coming ashore after years at see. It’s a period of adjustment.

But what’s going to cause all the debate to collapse into some sort of consensus will be the same thing that has always convinced me that this set of technology has a bright future.

There are too many good engineers and too much smart money that has staked its reputation on this industry for it to fail now. When a lot of money and a lot of talent lands on a set of ideas, those ideas find a way.

That remains true. Everything about this cycle has been different than the past, but I still think the broad lesson learned by many crypto veterans holds to this day: All anyone has to do to thrive here is survive.

Don’t overcommit, don’t overthink and, for God’s sake, don’t leave now.