Author: Connor Dempsey

Compiled by: Jiahua, ChainCatcher

The crypto revolution has indeed happened. It's just completely different from what was initially expected.

When I first entered the space in 2017, the consensus in the industry was: this technology would change everything.

Government-issued fiat currency would be replaced by decentralized currencies. Blockchain would eliminate the rent-seeking intermediaries that stand 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 worked at four crypto companies for eight years: @circle, @MessariCrypto, @coinbase, @crossmint.

I have witnessed this asset class grow from less than $1 billion to over $4 trillion, going through several rounds of speculative bubbles and experiencing a crisis that nearly led to systemic collapse. I found that what this industry has actually built is much more interesting than what was 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 Frenzy)

In early 2017, I stumbled upon an explanation of Bitcoin in a book, and from then on, I was hooked. Not long after, I read every related book I could find and then made a plan: to go to Singapore and write a blog documenting this fascinating new technology.

At that time, I had no idea that 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 battleground for all of this.

In November 2017, I published a layman's 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 feels more like a time capsule—condensing the optimism of that year while predicting a future that never came.

Predictions of the Time

The core argument of the article: blockchain networks like Ethereum can be used to build new types of consumer applications.

Most of the value created by consumer applications (like Facebook and Uber) flows 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 envisioned building a "decentralized Uber" on Ethereum. Early users and drivers would earn tokens for each completed trip, thus owning a part of the network. This would fairly reward those early believers who helped kickstart the network.

On paper, it was a commendable goal. But this decentralized 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 around the world.

But like in 2001, the underlying technology could not support the absurd valuations assigned to those application scenarios.

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

The returns investors received were only tokens, which would appreciate only once the project was completed. But builders also held onto tokens, allowing them to cash out and get rich from day one, thus losing the motivation to build useful products.

Founders and early investors made a fortune, while inexperienced investors were left buried. Although there were some who genuinely wanted to do something, this model unfortunately became a breeding ground for greed, fraud, and exploitation.

Just like every speculative bubble over the past few hundred years.

Building from the Ruins (Circle, 2018-19)

My wallet was deflating day by day. Using the little fame I had built on Reddit, I landed an entry-level marketing position at Circle in early 2018.

At that time, Circle had been established for four years. It had a set of unprofitable consumer applications (investment, payment, trading) and an over-the-counter trading desk quietly printing money to keep the company running.

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

But it was also at this time that the seeds for the next crypto revival were sown.

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

The Dollar and DeFi

Dollar-backed "stablecoins" were initially created to allow traders to easily switch between crypto positions. They locked value at $1 with a 1:1 reserve of dollars and government bonds.

Tether's USDT took off first during the token frenzy, with dollar reserves rapidly swelling in offshore bank accounts.

Although it started in trading scenarios, stablecoins provided incredible value for those who wanted to hold dollars but couldn't access the traditional banking system.

For example, those wanting to evade capital controls. Wealthy Chinese looking to diversify assets. Argentinians and Turks fleeing inflation.

In 2018, Circle partnered with Coinbase to launch the compliant U.S. version: USDC. Early usage was still primarily for trading, but some began to predict that this new type of internet dollar could provide dollar services to anyone with internet access, 24/7.

Meanwhile, the projects that survived the token era were almost all financial in nature.

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 dubbed "decentralized finance," or DeFi.

Stablecoins and DeFi would eventually converge. And what propelled them to the sky was a once-in-a-century pandemic.

The Return of Wild Growth (Messari, 2019-2021)

At the end of 2019, I joined a 13-person data research startup, 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 locked value in DeFi had grown to $665 million.

Then, in early 2020, a mysterious virus broke out in China, threatening to halt the global economy. All markets crashed.

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

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

Bitcoin soared from under $4,000 to nearly $70,000, surpassing a trillion in market cap, driven by institutional investors, outperforming all macro assets like gold.

Connor Dempsey Central banks continued 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 raced ahead the fastest, surpassing $1 trillion, outpacing all other macro assets.

These conditions also gave rise to the so-called "DeFi Summer," where the total value of DeFi protocols multiplied by 250 times, reaching $180 billion.

DeFi was supposed to rebuild traditional finance. But "DeFi Summer" looked more like a large online game, with players being a group of profit-driven traders, betting billions of dollars.

The game was called liquidity mining. Anonymous developers launched new protocols, and for some reason, most of them had food themes.

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

The whole process was both absurd and astonishing. Protocols would launch, and newly minted tokens could reach a market cap of $1 billion within days. Then early participants would sell off, causing the tokens to crash.

This was truly the Wild West era.

Like the previous token frenzy, DeFi Summer created a batch of millionaires before collapsing in on itself.

It also created one billionaire—Sam Bankman-Fried. This person would become central to the next disaster in crypto.

Standing on the Summit (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 was to sit next to those doing mergers and acquisitions and investing 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 ever been in, often making me feel like this:

(The original image is of the author at Coinbase headquarters)

This was also the period when the second round of speculative bubbles was forming—around a digital artwork called NFT.

If DeFi was the domain of professional traders, NFTs were more appealing to the general public. They provided artists with a new way to monetize online and showcased the potential of internet property rights standards.

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

Digital images of cartoon monkeys, "punks," and penguins began selling for $1 million each. An artist named Beeple created a piece by stitching together a bunch of images, which absurdly sold for $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 to acquire naming rights for the Miami Heat's home arena.

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

This was a replay of the madness of 2017. Under the catalyst of record money printing, the bubble was nearly four times the size of the previous round.

Liquidation (2022)

But soon, the flywheel began to fall apart.

The interest rate cuts, money printing, and economic stimulus that pushed all asset prices up eventually seeped into consumer 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 central banks had to reverse course, retracting the policies that had sent stocks and crypto to historic highs.

Under interest rate hikes and fiscal tightening, everyone looked at the high-priced assets they had bought and began to doubt.

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

Then, everything began to collapse.

If the token frenzy resembled the 2001 internet crash, what happened next was more like the 2008 financial crisis. A few toxic assets, combined with high leverage, nearly dragged everything down.

The first toxic asset was Terra's UST stablecoin.

Mainstream stablecoins (USDC, USDT) simply use cash and government bonds as reserves. UST relied on a complex algorithmic mechanism 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 they had nothing.

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

Three Arrows borrowed large amounts from crypto lending platforms Celsius and Voyager. These platforms lent out user deposits, chasing "safe" 8% returns. When Three Arrows collapsed, the platforms froze withdrawals and filed for bankruptcy, dragging 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 industry's white knight.

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

Remember FTX acquiring the naming rights for the Miami Heat's arena? That deal, along with the entire SBF empire, was supported by tokens printed out of thin air—FTT. SBF used FTT as collateral to borrow massive loans. When the price of FTT collapsed, 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, with $8 billion of customer funds disappearing.

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

This was crypto's Lehman moment.

Elections and Casinos (2023-25)

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

Then, the Biden administration moved to strangle this industry within the U.S.

The SEC, led by Gary Gensler, sued almost all compliant companies domestically for violating securities laws.

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

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

This approach produced several unexpected consequences.

First, launching anything with a business model in crypto (like DeFi) would be classified as a security and could be sued at any time.

So the legally safest option became to issue "Meme coins," tokens with no clear purpose.

On a platform called Pump.fun, millions of Meme coins were launched. Iggy Azalea, Caitlyn Jenner, and the Hawk Tuah girl all issued their own Meme coins. Without exception, they were disasters.

Crypto had a new casino, and it was even larger than the last one. Over 6 million Meme coins were launched. This sector peaked at $150 billion by the end of 2024, even surpassing the scale of that year's NFT bubble in dollar terms.

Second, the industry mobilized politically for the first time. Several leading companies injected tens of millions of dollars into PACs supporting crypto and organized lobbying in Washington.

Third, Donald Trump saw an opportunity. He promised to fire Gensler, end the banks' hostility, and make America the "world's crypto capital," successfully turning 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 issued a Meme coin: $TRUMP. His wife also issued one: $MELANIA.

This was the most absurd thing I had seen in my eight years in the space. Ironically, $TRUMP marked the end of the Meme coin bubble—it siphoned off all other liquidity, leading to the collapse of the entire Meme coin market.

Moving Towards Institutions (Crossmint, 2025-26)

Putting aside that awkward interlude, the industry's bet on Trump paid off.

At the moment Trump seemed poised to win, Bitcoin hit a new high. The market had preemptively digested a fact: the world's largest economy was shifting from hostility to friendliness towards crypto.

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

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

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

Stablecoin companies like Bridge and BVNK were acquired by Stripe and Mastercard for valuations over $1 billion. Rain completed a Series C round of about $2 billion. My former employer, Circle, behind USDC, went public in June 2025, with a peak valuation reaching $60 billion.

At this point, I was the head of marketing at Crossmint. We struck a deal with MoneyGram to help this century-old remittance giant use stablecoins for cross-border fund transfers.

Crossmint @crossmint · 2025/9/18 Breaking news: @MoneyGram, serving 50 million users in 200 countries, is adopting stablecoins, supported by Crossmint's wallet and stablecoin infrastructure. This is the future of cross-border finance.

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

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

A Revolution We Didn't Predict (Present)

Eight years have passed since my Reddit article, and we still don't have a decentralized Uber.

Blockchain hasn't eliminated all intermediaries, and fully 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 new internet financial system.

Every round of prosperity and recession has been refining that infrastructure. This infrastructure has the capability to reshape global finance and deliver it to anyone with an internet connection.

Token financing has proven that companies can raise money from anyone in the world.

DeFi has demonstrated that trading and lending can purely run on code (see @HyperliquidX and @pendle_fi).

NFTs have laid the foundation for internet property rights.

Even the dumbest round—Meme coins—has proven that this underlying network can withstand massive global transactions.

Replacing it with non-fungible assets like stocks, bonds, and real estate, along with a clear regulatory framework, will make the entire financial system's migration a smooth process.

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

Currently, with over $300 billion in stablecoin supply, $33 trillion in settlement volume was completed in 2025. So far this year, over $40 trillion has been settled, with a potential to reach $100 trillion.

Skeptics will say that a large portion of this is crypto trading and bot activity. That's true. But the scale is there, and the U.S. government is telling you where the direction is.

One crucial point, albeit a bit convoluted: stablecoins are backed by U.S. Treasury bonds, and Treasury bonds are debts issued by the U.S. government.

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

Recent reports predict that by the end of this century, stablecoins could grow into a $3.7 trillion market. With the passage of the GENIUS Act, this scenario is becoming increasingly likely. A thriving stablecoin ecosystem will drive private sector demand for U.S. Treasury bonds…

Where Do We Go From Here?

AI is changing everything, and crypto is no exception.

The marriage of crypto and AI has already begun. Millions of AI agents will soon complete 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.

Agents that shop for us, manage finances, and trade on behalf of entire companies are essentially a given.

Looking further ahead, we will see business models completely driven by agents, with humans out of the loop. Imagine a hedge fund: it reads every SEC filing, builds models on its own, trades by itself, with no analysts or fund managers in sight.

As this sci-fi future gradually materializes, crypto will move towards the mainstream by integrating with old 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 decades-old outdated infrastructure. Startups will launch financial products globally at unprecedented speed and coverage. The end result will be a 24/7 operating financial system that works equally well for people in Nigeria and New York.

From here, a million innovations will emerge.

Looking back at these predictions in eight years, will it be as awkward as looking back at my old article today? We'll have to wait and see.