The Current Crypto Cycle Delivers Hard Lessons on Commitment, Decentralization and Utility


As every crypto bull run has concepts and wild ideas that spread like memed wildfire and turn FOMO into euphoria, so each post-crash bear phase has its own corelated events and themes, that serve to propel crypto on towards a new cycle.

Looking back over the past few years in crypto, there are key behaviors that will stick in the collective memory as having driven bullish sentiment, or initiated chaos. Some will function as warnings about how not to go about things in future, while others can serve as building blocks towards growth and improvement.

MicroStrategy and Michael Saylor

A core characteristic, and a major selling point, of Bitcoin, is that while it has cheerleaders and advocates, there is no CEO, no figurehead, no single individual who is in charge to take either flak or plaudits.

Bitcoin was created by Satoshi Nakamoto, but he may or may not exist. That is, Satoshi might be the alias of a single individual, or of a group of pioneers, but either way, whoever he really is, he appears to have stepped away from his creation once it had been set in motion.

This was a critical move, marking bitcoin out as genuine in its aims (being truly decentralized, accessible to everyone, and beyond corruption), but it also meant that there was no leadership figure to outline where things were heading in the manner of, for example, Vitalik Buterin or Charles Hoskinson at Ethereum and Cardano, respectively.

In place of such a character, various independent bitcoin experts have stepped up, delivering talks with remarkable levels of commitment, in sometimes near-empty rooms, while there was a wider lack of educational content.

This shifted recently when the Co-Founder and CEO of MicroStrategy, Michael Saylor, went all in on bitcoin. MicroStrategy now holds 129,699 bitcoins, acquired for $3.98 billion, with purchases starting from August 2020.

Its latest buys took place during May and June, indicating an unwavering belief in bitcoin despite tough market conditions. It’s this kind of unhesitant conviction, combined with the capability to persuasively articulate bitcoin’s strengths, that has seen Saylor become a highly visible champion for the bitcoin cause. This has included appearances on mainstream media outlets not primarily related to crypto, such as his interview with Fox News’ Tucker Carlson.

Bitcoin, of course, remains unchanged and will continue to function regardless of what is happening in the news media or who is talking about it, but still, Michael Saylor has played an influential role during this phase of bitcoin’s existence. In fact, some of Saylor’s latest advice may be a lesson that many investors take as we move on from this latest crypto cleanout: “Bitcoin is the only investment grade cryptocurrency.”

No Place for Centralization

There is a common theme that stands out when you look at the large entities brought to a standstill by the crypto crash, which is that they have little regard for decentralization. This is apparent in the mismanaged crypto hedge fund Three Arrows Capital, which is facing liquidation and bankruptcy, in the case of Celsius, a CeFi operation in financial turmoil, and when considering the likelihood of further market contagion taking out centralized services.

That CeFi label indicates a system that offers some of the investment benefits available in DeFi, but managed through a centralized structure. A stark reminder that Celsius was not decentralized was when it froze user withdrawals, a move that explicitly distanced it from the critical premises around which crypto has evolved.

So what is the bear market teaching us here? During the last cycle, DeFi platforms spun profits for those who worked out its mechanics, and have continued to function as intended. But, when centralization and excessive leverage enter the crypto equation, creating precarious, opaque platforms with dubious practices, the delayed result turns out to be, perhaps not surprisingly, a series of devastating collapses.

From a broad perspective, it appears that crypto will, ultimately, punish those who deviate from its core purposes, decentralization in particular, and it will do so brutally since, by design, there is no controlling authority to offer relief.

In the future, as crypto recovers, we should hope to see true DeFi mechanisms continue to develop and improve, while centralisation and the reckless methods employed by some major players in this cycle are avoided on sight.

Real Utility and Crossover Tech

When it comes to cryptocurrencies other than bitcoin (which is intended as a digital currency and can function as a store of value), in future cycles there may be a higher expectation that cryptocurrencies have clearly understandable applications that provide value to users.

NFTs have provided a glimpse at the beginnings of this, as we see that it is possible to own and trade digital items without relying on a centralized database. The fact that some observers do not like the particular digital items currently being traded, or are put off by the flip-and-profit culture that has emerged around them, is not relevant. The important signal, if you cut through the noise, is that the items can be traded at all.

Further blockchain utility across sectors is to be expected, as is a continuation of the trend towards digital items acquiring value and garnering attention. What’s more, blockchains should not operate in a bubble, and as advances are made in other tech fields, VR, for example, then we might see currently separate areas of development thread together in novel ways.

As every crypto bull run has concepts and wild ideas that spread like memed wildfire and turn FOMO into euphoria, so each post-crash bear phase has its own corelated events and themes, that serve to propel crypto on towards a new cycle.

Looking back over the past few years in crypto, there are key behaviors that will stick in the collective memory as having driven bullish sentiment, or initiated chaos. Some will function as warnings about how not to go about things in future, while others can serve as building blocks towards growth and improvement.

MicroStrategy and Michael Saylor

A core characteristic, and a major selling point, of Bitcoin, is that while it has cheerleaders and advocates, there is no CEO, no figurehead, no single individual who is in charge to take either flak or plaudits.

Bitcoin was created by Satoshi Nakamoto, but he may or may not exist. That is, Satoshi might be the alias of a single individual, or of a group of pioneers, but either way, whoever he really is, he appears to have stepped away from his creation once it had been set in motion.

This was a critical move, marking bitcoin out as genuine in its aims (being truly decentralized, accessible to everyone, and beyond corruption), but it also meant that there was no leadership figure to outline where things were heading in the manner of, for example, Vitalik Buterin or Charles Hoskinson at Ethereum and Cardano, respectively.

In place of such a character, various independent bitcoin experts have stepped up, delivering talks with remarkable levels of commitment, in sometimes near-empty rooms, while there was a wider lack of educational content.

This shifted recently when the Co-Founder and CEO of MicroStrategy, Michael Saylor, went all in on bitcoin. MicroStrategy now holds 129,699 bitcoins, acquired for $3.98 billion, with purchases starting from August 2020.

Its latest buys took place during May and June, indicating an unwavering belief in bitcoin despite tough market conditions. It’s this kind of unhesitant conviction, combined with the capability to persuasively articulate bitcoin’s strengths, that has seen Saylor become a highly visible champion for the bitcoin cause. This has included appearances on mainstream media outlets not primarily related to crypto, such as his interview with Fox News’ Tucker Carlson.

Bitcoin, of course, remains unchanged and will continue to function regardless of what is happening in the news media or who is talking about it, but still, Michael Saylor has played an influential role during this phase of bitcoin’s existence. In fact, some of Saylor’s latest advice may be a lesson that many investors take as we move on from this latest crypto cleanout: “Bitcoin is the only investment grade cryptocurrency.”

No Place for Centralization

There is a common theme that stands out when you look at the large entities brought to a standstill by the crypto crash, which is that they have little regard for decentralization. This is apparent in the mismanaged crypto hedge fund Three Arrows Capital, which is facing liquidation and bankruptcy, in the case of Celsius, a CeFi operation in financial turmoil, and when considering the likelihood of further market contagion taking out centralized services.

That CeFi label indicates a system that offers some of the investment benefits available in DeFi, but managed through a centralized structure. A stark reminder that Celsius was not decentralized was when it froze user withdrawals, a move that explicitly distanced it from the critical premises around which crypto has evolved.

So what is the bear market teaching us here? During the last cycle, DeFi platforms spun profits for those who worked out its mechanics, and have continued to function as intended. But, when centralization and excessive leverage enter the crypto equation, creating precarious, opaque platforms with dubious practices, the delayed result turns out to be, perhaps not surprisingly, a series of devastating collapses.

From a broad perspective, it appears that crypto will, ultimately, punish those who deviate from its core purposes, decentralization in particular, and it will do so brutally since, by design, there is no controlling authority to offer relief.

In the future, as crypto recovers, we should hope to see true DeFi mechanisms continue to develop and improve, while centralisation and the reckless methods employed by some major players in this cycle are avoided on sight.

Real Utility and Crossover Tech

When it comes to cryptocurrencies other than bitcoin (which is intended as a digital currency and can function as a store of value), in future cycles there may be a higher expectation that cryptocurrencies have clearly understandable applications that provide value to users.

NFTs have provided a glimpse at the beginnings of this, as we see that it is possible to own and trade digital items without relying on a centralized database. The fact that some observers do not like the particular digital items currently being traded, or are put off by the flip-and-profit culture that has emerged around them, is not relevant. The important signal, if you cut through the noise, is that the items can be traded at all.

Further blockchain utility across sectors is to be expected, as is a continuation of the trend towards digital items acquiring value and garnering attention. What’s more, blockchains should not operate in a bubble, and as advances are made in other tech fields, VR, for example, then we might see currently separate areas of development thread together in novel ways.



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