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 specifically 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" using Ethereum. Early users and drivers would earn tokens for each completed trip, thereby owning a part of the network. This would more fairly reward those early believers who helped kickstart the network.

On paper, it was an admirable 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, this model disrupted the normal incentive mechanisms between investors and builders. Builders could raise $10 million overnight with just an idea.

Investors received tokens as returns, which would only appreciate 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 holding the bag. Although there were some who genuinely wanted to do something, this model unfortunately devolved into a breeding ground for greed, fraud, and exploitation.

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

Building from the Ruins (Circle, 2018-19)

The wallet was deflating day by day. Using the little fame I had built on Reddit, I landed an entry-level marketing job 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 during this time that the seeds for the next revival of crypto 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 bank accounts outside the U.S.

Although initially for trading scenarios, stablecoins held tremendous value for those who wanted to hold dollars but couldn't access the traditional banking system.

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

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

Meanwhile, the projects that survived from 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 the financial market. 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 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 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 was injected.

This money needed a place to go. With everyone stuck at home, vast 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 gold and all other macro assets.

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

Bitcoin ran the fastest, reaching over $1 trillion, outperforming all other macro assets.

These conditions also birthed 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, often themed around food for some reason.

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

The entire 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, and the tokens would 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 produced a 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 a 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 speculative bubble was forming—around a digital art form called NFTs.

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 for standards in digital ownership on the internet.

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 combined a bunch of images into one piece, 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 the naming rights for the Miami Heat's 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 could not 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 panic.

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 akin to 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 used cash and government bonds as reserves. UST used 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 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 across the entire industry.

Three Arrows borrowed large amounts of money from crypto lending platforms Celsius and Voyager. These platforms lent out user deposits, chasing a "safe" 8% return. 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 white knight of the industry.

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 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 misusing 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 money.

This was crypto's Lehman moment.

Elections and Casinos (2023-25)

After the collapse of FTX, SBF went to prison. The crypto market fell 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, citing violations of 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 utility.

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 became a casino again, and this time it was even bigger. Over 6 million Meme coins were issued. This sector peaked at $150 billion by the end of 2024, even surpassing the scale of the 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, engaging in 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 the "world's crypto capital," successfully transforming 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 ridiculous 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, followed by 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 already digested the fact that 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 passed in July 2025—America's first major 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, the company behind USDC, went public in June 2025, with a peak valuation of $60 billion.

By this time, I had become the head of marketing at Crossmint. We struck a deal with MoneyGram, helping 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 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 called Bitcoin a "money laundering index." Now, the CEO of BlackRock, which manages $14 trillion, referred to tokenization as "the next generation of the market," predicting that all stocks, bonds, and asset classes would eventually run on the 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 boom and bust has been refining that infrastructure. This infrastructure has the potential to reshape global finance and deliver it to anyone with internet connectivity.

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

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

NFTs have laid the groundwork for internet ownership.

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

Replacing it with stocks, bonds, real estate, and other non-fungible assets, combined with a clear regulatory framework, will make the migration of the entire financial system a matter of course.

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

Currently, the supply of stablecoins exceeds $300 billion, completing $33 trillion in settlement volume in 2025. So far this year, over $40 trillion has been settled, with a potential to hit $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. government bonds, and government bonds are debt 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 the century, stablecoins could grow into a $3.7 trillion market. With the passage of the GENIUS Act, this scenario becomes increasingly likely. A thriving stablecoin ecosystem will drive private sector demand for U.S. government 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 interface 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 done deal.

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, trades on its own, with no analysts or fund managers in sight.

As this sci-fi future gradually materializes, crypto will go 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 outdated infrastructure that has been in use for decades. 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 embarrassing as looking back at my old article today? We'll see.