Travis Kling, founder of the crypto asset management agency Iikigai, recently published a series of articles on "The Development of Cryptocurrency in the Next Two Years", following "Don't Pretend This Shit Can or Will Achieve Anything" and "Financial Nihilism: Young Americans After "Zeitgeist", Kling issued the third article "Large-scale in-service layoff". (Note: Quiet quitting, lying flat on the job)
He shared why "many people who entered the cryptocurrency field with great expectations quietly quit one after another", as if they were silent and left silently like employees who were about to leave.
This time, we will take readers through his thoughts and let us find out.
The encryption market atmosphere is sluggish, and practitioners are "living on the job"
In the summer of 2024, the cryptocurrency market sentiment continued to be depressed. Kling has been running Ikigai Asset Management for more than six years, has extensive connections and resources, and regularly communicates with industry players. However, he observed a worrying phenomenon: more and more people are losing confidence in the industry, forming a trend called "employment layoffs."
Kling pointed out that from 2017 to 2022, the market was full of optimism and continued to promote the vision that "cryptocurrencies will solve real-world problems and achieve widespread application." The dream attracted billions of dollars in venture capital.
However, most of these expected solutions have not been implemented. For investors who regard cryptocurrency as their faith, this is undoubtedly a heavy blow to confidence, leading to a significant decline in participation in the entire community.
Source: Lian News
He also noticed that certain products such as DeFi, NFT, stablecoins, and ideas such as Axie Infinity have attracted the attention of many people, making people believe that there is still potential for the development of cryptocurrency. In addition, Bitcoin’s adoption rate and price continue to rise, coupled with support for Bitcoin from celebrities such as Tudor Investment founder Paul Tudor Jones, MicroStrategy founder Michael Saylor and Musk, further increasing the market’s optimistic expectations for cryptocurrencies.
Years of investment have yielded little tangible results, and participants have gradually lost confidence.
He pointed out that certain products such as DAO (Decentralized Autonomous Organization) and Metaverse (Metaverse) and other highlights have continued the market's optimism and attracted many new blood to join the encryption industry. While optimism can sometimes be overzealous, most people have an inkling that many projects are unstable, overvalued, and out of line with market demand. These doubts become more pronounced during bear markets, yet even in the most difficult bear markets (such as late 2018 and the second half of 2019), the market still has certain expectations for the potential of crypto technologies.
However, the sentiment is different now (a sentiment shared by Kling and others). Facts gradually revealed that many projects had limited uses and were overestimated, and the potential of existing projects gradually lost market confidence.
Kling believes that the marketing strategy of accumulating points in exchange for cryptocurrency airdrops has failed, and the meme coin craze is embarrassing and ridiculous. People who have been invested in cryptocurrencies for a long time have gradually realized that although the industry appears to be making progress on the surface, the actual results are not proportional. This is a huge blow to the players who have put in so much effort over the years.
“Suddenly, you feel like all your years of hard work are meaningless,” he said. “You don’t like the results of cryptocurrency and you don’t like its future direction.”
What’s the way out beyond the crypto industry?
Many people work hard to adjust the psychological gap and try to rationalize these contradictory perceptions, but reality eventually wakes them up, causing many people with ideals to leave the cryptocurrency industry and withdraw from the entire team. Still, some chose to stay, but their motivation and enthusiasm dwindled significantly, and their faith faded. Most people stay because they can't imagine themselves doing anything else, or investing their money elsewhere.
Kling asked readers: "What would you do? Get a regular job? That sounds really sad." This speaks to the inner conflict of many people who believe in cryptocurrency when facing reality, explaining why Why do they still stay in this field.
Motivation to stay in crypto market, attractiveness of potentially high returns
He mentioned the point of "making choices with economic benefits." Although many people are disappointed with the prospects of cryptocurrency, the return potential after evaluating time and risk is still better than other investment categories, and they still choose to stay in this field.
He pointed out that this may seem contradictory, but the logic is this: "I believe that Bitcoin can outperform other assets in most annualized returns, although there are occasional bad years. At the same time, I also believe that certain altcoins can outperform other assets in annual returns." If you can seize these opportunities and outperform Bitcoin by a lot, it is worthwhile to stay here.”
This passage reflects the mentality of some investors who still expect high returns even if they are uncertain about the future of cryptocurrency.
He gave an example: "A 30-year-old person has earned US$2 million by investing in cryptocurrency in the past five years, but this amount is not enough to retire. He needs to turn this 2 million into 5 million or 10 million to truly be stable." "
He also said: "You got into cryptocurrencies in 2017 because it was full of potential. Despite the financial gains, you were disappointed with the actual progress of cryptocurrencies and no longer had all that much hope for the future. However, you still didn't Leave. Then choose the stock market? The stock market is more competitive and more efficient, but the returns are lower, so continue to wait for an opportunity that can quickly increase the value of your assets.
Such examples abound in the currency circle.
The market encourages the creation of new coins, arbitrarily overestimating the market value and profiting from retail investors
People cannot foresee the next breakthrough product that will drive the market. The craze of DeFi and NFT has passed, the gaming industry has long since failed, the Metaverse has become a joke, and the development of decentralized social media has stagnated. While there are expectations for the marriage of cryptocurrencies and AI, Kling believes the excitement may be misplaced.
Currently, DePIN is a bright spot in the crypto space, it is working smoothly and has the opportunity to be applied in the real world and drive price performance. However, such bright spots are uncommon across the crypto market.
On the other hand, the venture capital environment in the crypto market has been criticized. Simply put, the crypto market is still rewarding venture capital firms that invest in token projects early, and they can make huge profits through large-scale sell-offs to retail investors, even if these projects barely make any progress.
Most new coin companies will:
Operate a chain of points airdrops
Fabricating and exaggerating the market value of a project
Hire market makers to ensure they make a profit no matter what
List tokens on major exchanges
Finally sell off
Even if the token price drops by 85%, early stage VCs can still make huge profits. This is a feature of the current altcoin market structure. It’s a mistake for VCs to be able to make huge returns and raise more money even though the project hasn’t achieved its goals.
Kling said such behavior will continue as long as the market remains unchanged. They earn huge profits through this process.
Do you want to be a gentleman, or do you want to make money?
Kling quoted a friend who said, "Do you want to do the right thing, or do you want to make money?" This sentence has become a motto for cryptocurrency enthusiasts. He understands this thinking, which reflects the value of profit above all, especially over ethical considerations. However, he also made a counterargument: "If you go on the wrong path for a long time, even if you make money in the process, you will eventually lose the opportunity to continue making mistakes and making money." He believes that we are currently seeing such a situation.
All this explains why the cryptocurrency industry has begun to see the phenomenon of "large-scale job layoffs."
On-the-job layoffs are gradually spreading, making it difficult to attract top talent
Being on the job can destroy a company's culture. This is the worst-case scenario for an ambitious CEO. When employees see others not working hard and losing confidence in the company's mission, they will naturally lose motivation. Humans are imitative creatures. Enthusiasm is contagious, but so is lack of enthusiasm. Therefore, quiet resignations will continue to spread.
So far, this crypto cycle hasn’t attracted the same new talent as previous ones (except for ETF investors). Cryptocurrency is no longer the top choice for attracting America’s top talent. A series of events in 2022 has devastated the industry, and efforts now are not enough to repair the reputation. Can you imagine? If you were considering joining a company that was experiencing “widespread quiet departures,” would you find this a challenging opportunity?
The market is no longer in its early stages and panic signals cannot be viewed as buying opportunities
Kling believes that this article may be regarded as a "bottom signal" by traders, but he disagrees. He pointed out that the history of the cryptocurrency market tells us that entering the market when the market is panic and leaving the market when it is optimistic can often bring huge returns. Although his analysis of "the gradual and widespread quiet resignation" is full of pessimism, based on past experience, this is actually a good time to enter the market.
Some questioned him, saying "We're still early, brother." But Kling bluntly retorted: "Shut up, it's not early at all!"
He emphasized that Bitcoin has reached a market capitalization of $1.1 trillion and more than half of Wall Street holds it. Other cryptocurrencies also have a combined market capitalization of $1 trillion. Tether holds more U.S. Treasury bonds than even Germany. More than $20 billion in venture capital has poured into the crypto market over the past four years. We're really not in the "early stages" anymore.
He also mentioned that stop comparing cryptocurrencies to the Internet of the 1990s. They are completely different things. Bitcoin and stablecoins have found market fit, while most other crypto projects are just superficial and may even be heartless scams.
The future of altcoins will turn around, and regulatory reforms after Trump’s victory may change the market
Still, Kling believes there are reasons to be optimistic about altcoins. He pointed out that assuming Trump is elected president in November, it may bring about a substantial regulatory structure that allows altcoins to be redesigned to resemble securities and thus accumulate value.
For years, we have been discussing "value creation" and "value accumulation," and token structure is the key bridge between the two. If a Trump administration takes office, we may say goodbye to useless governance tokens and welcome pseudo-securities with yield and token destruction capabilities, thanks to Trump’s new regulatory measures. In this way, the crypto market in two years may have a more stable market without "Fugazi" altcoins.
At present, this is a trend worth paying attention to.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reprinted with permission from: "Chain News"
