Cryptocurrency fans and critics both say this year proved them right

Cryptocurrency’s biggest fans and harshest critics don’t have a lot in common, but one thing unites them: both believe 2023 delivered a decisive verdict on the future of the technology. 

But like patients interpreting an inkblot test in wildly different ways, their views about what this year means for crypto vary despite looking at the same picture.

On one hand, 2023 was the year that consequences caught up with the crypto industry. The highest-profile event was the criminal trial of Sam Bankman-Fried and his cryptocurrency exchange FTX, which revealed how the former golden child of crypto had brazenly been doing a lot of crime (and a lot of cringe, too). His rival, Binance’s CEO Changpeng Zhao, looked ascendant in its aftermath — before he, too, was convicted of a crime after pleading guilty to money laundering charges and subsequently resigned from his position. 

It’s not just crime galore at the top of the industry but also what many experience at the grassroots level. Anecdotally, there feels like an endless stream of stories about huge crypto scams ripping off Australians.

All this has hardened the stance of its critics. American antitrust advocate and director of research at the American Economic Liberties Project Matt Stoller summed it up when he shut down a question on X, formerly Twitter: “I not interested in an in-depth good faith discussion of bitcoin after the scams, fraud, grift, and terrorist financing facilitated by crypto of the last two years. If you’re in the industry today you’re a scumbag.”

And yet, the crypto bulls are quietly — at least compared to their brashness at crypto’s hype peak a few years back — chuffed about how the industry is maturing. Normal people don’t know about crypto developments such as those cited in cryptocurrency publication CoinDesk’s piece by Paul Brody, like legislation allowing regulated trading in the EU and the creation of ETFs in the US, but these things have nudged crypto towards responsibility. These are the green shoots of a less cowboy, more careful industry that people can trust and use, they claim.

Or, if you want to ignore all the boring stuff, line go up. Cryptocurrency prices have rallied, like Bitcoin going above US$40,000 for the first time in two years. And exchanges are seeing more volume. Even though the hype level isn’t the same as it was when we were at the same point of the price curve last time, the truth is more people care about cryptocurrency when the going is good.

But the fact that people are starting to care more about cryptocurrency again as prices spike might be the biggest indictment for the industry, despite the attention and, presumably, riches it brings them. That’s because it shows that the crypto industry does not have a killer use case other than speculation (notwithstanding its use for illegally buying drugs online and other crimes) that is attracting people even when prices aren’t going up.

The only thing the vast majority of people know about cryptocurrency is that it has a volatile value, and that maybe, just maybe, it could make them wealthy if they play it right. The great hope of the industry is that all the people buying it might then use it for something — after all, you can’t use it if you don’t have it. 

Perhaps there’s something nascent that hasn’t reached mainstream yet that will soon be a compelling case to use cryptocurrency. If that’s the case, future audience, I apologise for my naivety. But until that’s the case, 2023 marked another year that the crypto industry failed to prove that most people should care.