October is National Cryptocurrency Month and what a month it’s been. The FTX trial is in full swing and regulators continue to debate whether or not there is a place for bitcoin exchange traded funds (ETFs) for investors to become more actively involved in digital assets. Bitcoin is also up big – more than 25% this month! At the same time, Michael Lewis’ latest biography, Going Infinite, which profiles Sam Bankman-Fried, is being met with significant pushback from mainstream press (and exposes the implicit biases baked into how non-crypto journalists think about the technology.) Take this passage from New York Magazine’s review:

“It’s not clear in the book, as it has never really been clear anywhere else, what social or economic problem is being addressed by cryptocurrency. “

This is, frankly, absurd. Tell that to anyone living in countries like Turkey or Argentina where runaway inflation as the result of poor economic policy means no one trusts the institutions meant to improve their lives. A relatively volatile bitcoin sure looks a lot better against triple digit inflation.

So where do we go from here? As an agency, we firmly believe in the transformative power of blockchain technology. Here is what we see in the short term for crypto:

Top Projects Will Flee the U.S.

For anyone building a Web3 project right now, the U.S. is a risky place. Regulators remain opaque in their approach to a legal framework for the industry and that lack of transparency is too risky for many. We’ve seen public comments from Ripple to Bittrex to Crypto.com over the course of the year on their plans to either move operations overseas or pull back from U.S.-focused offerings. It’s really a shame. The U.S. should lead innovation, not deter it. 

More Regulation is Coming

Despite the slow-moving approach taken by regulators, there will be some type of resolution in the near future. Just yesterday the UK announced its plan to bring a legislative framework to digital assets by 2024, and at Money20/20 (where our team was on the ground coordinating broadcast media coverage) we were front and center for similar conversations. That will only put the U.S. under more pressure to deliver on something workable so that the entire industry can move forward.

It’s Put Up or Shut Up Time

Bear markets are never a good time for poorly focused organizations to try and make it. We’ve spoken to several Web3 projects over the last six months where it was very clear that they had no real plan. That simply won’t fly right now. Every project has to provide detail and consistently overdeliver. Looking for VC capital? That just makes it even harder (although there is promising news this week from Factor Capital.) Unlike a few years ago, early stage ventures just aren’t being funded unless they have a real business case. 

It may not seem like it, but I’m optimistic about where digital assets are headed. There is a prolonged shakeout that’s happening but it’ll mean higher-quality opportunities for everyone. Where will we be during the next National Cryptocurrency Month? That’s unclear, but I think significant change is ahead in 2024. 
Reach out if you want to talk about all things crypto: john@rallypoint.pr

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