Author: Travis Kling (Founder of Ikigai Asset Management)
標題：《Pervasive Quiet Quitting》
Compiled by: Zombit
After experiencing this summer’s gloomy sentiment toward the cryptocurrency market, I’m about to post the third installment in a series that follows “This Stuff Doesn’t Work, or Ever” and “Financial Nihilism: U.S. The Zeitgeist of the Young Generation". This article is about 10 minutes to read and is titled "The Massive Silent Departure."
I have been focusing on the cryptocurrency space for seven years and running the asset management company Ikigai for over six years. I have quite a large network of contacts in the U.S. crypto community and regularly communicate with dozens of crypto people.
I have recently observed, or heard from others, an attitude or stance so frequently that I thought it must be a trend.
Cryptocurrencies are experiencing a massive “Quiet Quitting.” (Meaning to stay in this industry with a negative or bad attitude)
To illustrate, if you're not familiar with the term "Quiet Quitting," it's a relatively new concept.
Part of the reason why people come to me so often to discuss this quiet exit stance is because of my articles "This Stuff Doesn't Work, If Ever" and "Financial Nihilism."
These are two of the most widely read long-form articles I’ve ever written, and I’m still tagged on Twitter. I attended a cryptocurrency conference last week and at least six people mentioned these articles to their faces. These articles really resonate.
This “big push model silent exit” trend is a continuation of the current situation of cryptocurrency captured (and even predicted) in those articles.
What I’m seeing and hearing is that there’s a significant drop in engagement from some parts of the crypto community compared to previous years. The reason for their decline in participation is that their belief that cryptocurrency projects solve real-world problems and therefore achieve large-scale adoption has also declined significantly. This is a dream that has been marketed and embraced from 2017 (the year I joined) until 2022 – that “cryptocurrencies will solve real-world problems and thus achieve mass adoption.” Based on this premise, billions of dollars in venture capital funding were gathered.
There are phenomena along the way that make you believe that some sense of progress is happening: DeFi is an example, NFTs are an example, the popularity of stablecoins is an example, Axie Infinity is an example. Additionally, Bitcoin’s adoption rate has increased, and so has its price, with support for Bitcoin from Paul Tudor Jones, Michael Saylor, Elon Musk, and others making people more optimistic about the cryptocurrency as Bitcoin performs well.
The above mentioned plus other smaller phenomena (e.g. DAOs, Metaverse) have kept people generally optimistic and attracted many new people into the cryptocurrency space, including not only buyers but also full-time employees. Sometimes this optimism can turn into a frenzy, but even in the most frenzied moments, most people know deep down that much is unstable, overvalued, and lacks market fit. These concerns persist. During a bear market, these concerns will be amplified and optimism will turn to pessimism. However, even in the deepest bear market (such as the end of 2018 and the second half of 2019), people still maintain strong optimism about certain projects and have a strong interest in technology. The potential holds broad promise.
However, the situation we are currently facing is different (and many seem to agree). Now that the reality behind the scenes has been revealed, we see many projects that are pointless and ridiculously overrated, while the potential of existing projects becomes increasingly less credible.
The “points versus airdrops” blockchain is an embarrassing and ill-advised failure. The meme coin craze is even more embarrassing and stupid. For many players who have been through multiple cryptocurrency cycles, the reality is slowly setting in: We have simultaneously made tremendous progress while achieving next to nothing of substance. For those who have devoted so much time and energy to this field over the years, this reality is shocking.
Suddenly, your life's work seems meaningless. You are disappointed with what cryptocurrency has achieved and don’t like the direction it is going in the future.
Many people try to rationalize this reality through cognitive dissonance, but for many, this reality is deeply ingrained in their psyches. This realization has caused many people to leave the field entirely. People are leaving the cryptocurrency market in large numbers. But there are still some people who remain, but their motivation, enthusiasm and belief have been greatly weakened. The main reason many people stay is that it's hard to imagine spending their time doing anything else, or investing their money elsewhere. Are you looking for a traditional corporate job? This sounds like a disaster.
There is also a view of "using capital to make decisions". While many are disappointed that cryptocurrencies are realizing their potential, they remain in the space because they believe "time-adjusted, risk-adjusted" returns are still more attractive than elsewhere. This may sound contradictory, but the logic is this:
“I believe Bitcoin will outperform most other asset classes every year, with the occasional bad year. Additionally, I believe certain altcoins will significantly outperform Bitcoin in up years. Possibly a few altcoins, as well. Probably a lot of altcoins, but at least there will be a few. If I can identify these coins, I can easily double my capital or more, so it's worth me staying and watching the market..."
Imagine that you are 30 years old and have a liquid net worth of $2 million, which you have earned by investing in cryptocurrencies over the past five years. That's a lot of money, sure, but probably not enough to retire you. You need to turn that $2 million into $5 million or $10 million to really settle down. And you're still young and not ready to retire.
You entered the cryptocurrency market in 2017 because it was exciting, revolutionary, and full of potential. You're doing well personally financially, but are disillusioned with what the space has actually accomplished and increasingly less optimistic about the future of cryptocurrencies...but you're not leaving. You can't. Will you spend your time doing other things? Shifting to the stock market instead of altcoins? That makes no sense. More competition, more efficiency, and less reward. So you just stay here and keep watching the market, hoping for an opportunity to triple your net worth in a year... There are so, so many situations like this.
This stance is common, even as there is growing waning confidence that these things simply don’t work, and may never work. Crypto enthusiasts cannot foresee where the next major rally will be driven. There is no DeFi Summer, no NFT Summer. The game is currently dead and the metaverse is proven to be a complete joke. Decentralized social media has also stalled. People are trying to get excited about “crypto x AI,” but I (and many others) think that excitement may be misplaced (at least for now).
DePIN is running and growing, which is exciting - the brightest spot in the altcoin space right now. This is really an area where people expect strong future price performance because it has real-world applications. However, there are very few projects involving this area in cryptocurrency.
Another aspect worth watching is the much-maligned investment landscape of cryptocurrency venture capital. Simply put, the cryptocurrency market continues to reward venture capital firms that invest early in token projects, even when those projects make little apparent progress toward their intended use.
These token projects can:
Run a "points for airdrops" chain;
Fabricating a ridiculous market valuation;
Hire a market maker, pay them a lot, and they'll make money no matter what happens;
List tokens on major exchanges;
Sold all the way to the crash.
Even if the token price drops 85% since listing, early stage VCs can still make multiples of their gains. This is the main feature of the current altcoin market structure. The cryptocurrency market allows VC firms to return their money (and raise new funds) based on investments that never really progress. This is a cruel case of inconsistent incentives. You can’t blame VCs—people act on incentives. So far, the response from the market has been “please VCs, let more junk coins be listed on major exchanges and sold to me at ridiculous fully diluted valuations.” Unless the market collectively decides it no longer offers this opportunity, you can hardly expect VC firms to behave differently. They made the money for their private jets from these deals.
There’s a saying in the crypto community popularized by a friend of mine: “Do you want to be right, or do you want to make money?” This is a slogan for many crypto practitioners. I understand this perspective, which emphasizes profit above all else, especially above your self-aggrandizing desire to be "right." But I would like to offer a counterargument - "Even if you can still make money when you make a mistake in judgment, if this mistake continues for a long time, you may still eventually lose the opportunity to continue to make money." We are seeing some of this now. Condition.
All of the above factors combined explain the phenomenon of “massive silent exits” in cryptocurrencies. Going back to the traditional definition of "Quiet Quitting" in the New Yorker article - "Quiet Quitting (the traditional definition is more easily understood when translated as "Quiet Quitting")" will kill the company's culture. This is an ambitious CEO's worst nightmare. When employees see others not working and not believing in the mission, you will naturally not work and not believe in the mission. We are creatures of imitation. Enthusiasm is contagious, and so is a lack of enthusiasm. Therefore, quiet resignations lead to more quiet resignations.
And in this cycle, we are not even close to the number of new people brought in in previous cycles (excluding ETF investors). Cryptocurrency isn’t exactly the industry of choice for America’s best and brightest young people. The damage done in 2022 has cast a pall over the industry, and we haven’t done enough yet to make up for the loss of our reputation in attracting top talent. Imagine you are considering joining a company that is experiencing a much-hyped “quiet resignation.” Does this sound like an opportunity you would jump into?
So what to do?
I know very well that articles like this will be interpreted by traders as "bottom signals." Historically, in cryptocurrencies, buying when sentiment is at its most negative and selling when sentiment is at its most optimistic has often led to incredible returns. And this "massive silent exit" thesis is definitely a negative sign, so generally you would want to buy heavily in this situation. I understand the logic.
Another counterargument to the argument I'm making here is "we're still in the early days, bro". Don't say that. It's already late.
Bitcoin is already worth a trillion dollars, and half of Wall Street now owns it. All other cryptocurrencies combined are also worth another trillion dollars. Tether owns more U.S. Treasuries than Germany. More than $20 billion in venture capital has poured into the space over the past four years. We're getting late.
And stop comparing it to "the Internet in the late 1990s" and look at what happened after that. This is not the internet of the late 90s. Bitcoin has market fit, stablecoins have market fit, and the rest is lost in the ocean. These solutions are, at best, problem-finding, and at worst, endless, cruel scams.
Still, there are some reasons to be optimistic about altcoins. From my perspective, the most exciting possibility is that once Trump wins the election in November, there may be a de facto regulatory framework in place that would allow token structures to be redesigned and introduce security-like features, Thus achieving attractive value accumulation.
We've been talking about this concept here for years - value creation and value accumulation, and the bridge between the two is the token structure. Under a Trump administration, useless governance tokens may be phased out and replaced by yield-generating, token-burning quasi-securities — something that would only be possible thanks to the U.S. regulatory framework. In such a world, you can imagine the altcoin market in two years being less illusive.
This is something worth keeping at least one eye on...
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