Ask HN: Is anyone else glad the crypto market is crashing?
Quote I heard at some point (about crypto, and many things): Money is a star which obscures our view of the planets orbiting it.<p>Blockchains have many use-cases. The community&#x27;s insistent push toward tokenization and assetiziation of this technology near-totally obscures the fundamental technology and what its capable of.<p>Arguably, it isn&#x27;t even the tokenization. Tokens make sense. Tokens which have value makes sense. But then enters: greed. It&#x27;s not just about having a token which has value and can do things via interfacing with the blockchain. The asset has to be an investment. We don&#x27;t think about ETH in terms of what it can do on the blockchain (utility); we think about it in terms of an ETH:USD price. Its utility is impossible to detangle from Growth; Deflation; my Investment portfolio.<p>ENS is my favorite example. Arguably; this is how domain names should work. A distributed, trustless ledger. Power to the people! And then you realize, it costs $100USD&#x2F;year to register a domain name. Today is pretty cheap; thursdays are cheaper than fridays, but you should really buy one on a wednesday because that&#x27;s when gas is at its lowest.<p>Why is it so expensive? Because the token is an asset. Thousands of stakeholders, really every ETH user, has an interest in seeing the token go up. Token goes up; utility of the token goes down, as it becomes prohibitively expensive to actually do interesting, real, utilitarian things with it.<p>Real world: Assets which have both Utility &amp; Investment Potential are somewhat rare. Cash has little investment potential, but high utility. Gold, Silver, etc; low utility (not zero, but low), classic investment options. Corporate shares? Low&#x2F;moderate utility; maybe you can use them to vote on corporate direction, but at the end of the day that vote is in service to investment potential.<p>It turns out that assets which overload Utility and Investment Potential inevitably screw over someone who needs that utility. They aren&#x27;t egalitarian, even by the perverted definition of capitalistic egalitarianism. They inordinately favor early adopters and capital holders. The biggest real world asset class which suffers from this: real estate; and our world is observing, in real time, the decades-long consequences of treating housing like an investment.<p>That leads me to three conclusions about crypto:<p>1. Crypto &amp; Blockchains are too intertwined with money. It will never not be about money. Most will recover from this crash, and still be about money.<p>2. Some people say: &quot;How can bitcoin have value? it&#x27;s nothing. just bits in a computer.&quot; That&#x27;s <i>literally</i> its best feature! Not only is it irrelevant that it can&#x27;t do anything; it&#x27;s a good thing. It&#x27;s among the purest investment vehicles ever created. A store of wealth with near-zero utility. I say let it grow! Every dollar tied up in BTC is a dollar not being spent to make housing more expensive, or grow the tendrils of gigacorporations into every nook and cranny of our lives.<p>3. Some people say: &quot;This crypto project will be successful; it&#x27;s doing something really cool, blockchain for wifi networks, or dogs, NFTs for games, whatever&quot;. I disagree. Crypto projects which try to be utilitarian Will Always Fail; unless they can detangle themselves from the deflationary investmentization of their tokens. None do that; all are started to make money; their founders being the biggest holders of the tokens, look for a return on investment of their time and effort. You can&#x27;t engineer greed away.<p>And here&#x27;s a prediction for the immediate future: The stock markets are red this month, abstractly, simplistically, because of Fed rate hikes. Recent analysis has suggested that the markets have already priced in <i>more</i> rate hikes than the Fed has gestured it wants to do, for the foreseeable future. That would tend to signal that a broad market crash isn&#x27;t forthcoming; I&#x27;m not timing the bottom, or saying we&#x27;re heading up, I&#x27;m just saying that there&#x27;s reasons to be positive right now.<p>Crypto is still dumping; hard. The first reason is the Luna situation, which is REALLY bad, I don&#x27;t think its possible to understate how bad that is. The second reason is really that last paragraph; value, or money, is a fixed entity. If institutions are seeing positive signs concerning the stock market right now, they&#x27;re seeing whats happening to Luna, they may be positioning to move capital out of the crypto markets and back into the stock markets.<p>Crypto diehards will be unhappy to discover that most coins are correlated with one-another. That&#x27;s sad; there&#x27;s an alternate reality where people could lose faith in Luna, but still maintain faith in BTC or ETH, and different coins become inversely correlated.<p>But there&#x27;s another test running in parallel to that: is the crypto market as a whole inversely correlated with the stock market? Over the past eight years, the answer to that has been No; but its also not been tested in the fires of a major sell-off in one or the other. Today is that test. And if the result ends up, actually, being Yes: that&#x27;s REALLY good. I can&#x27;t understate how good that is, for both crypto and our economy; it will give our economy another $1T+ alternative store-of-value to bonds, it&#x27;ll desync boom-bust cycles which lessens the economic impact of recessions, it just gives capital holders optionality.<p>What we don&#x27;t want is: everything crashing at the same time. Crashes are necessary; but its healthier to have smaller, isolated crashes in specific asset classes.