Spectacular cryptocurrency failures in 2022 have raised the stakes for the industry amid questions about the enduring viability of a technology that advocates say has the potential to revolutionize finance.
The crypto market lost trillions in valuation last year, spurred by the crash of the algorithmic stablecoin TerraUSD in May and the failure of FTX, one of the largest crypto exchanges, in November. With a total global market cap once put at close to $3 trillion, the industry now has a value that CoinMarketCap, a site that tracks prices, puts closer to $800 billion.
In Congress, where the industry once had a vocal contingent of backers, the hostility is now louder, with calls to severely restrict cryptocurrencies or ban them entirely.
Despite the setbacks, crypto is still a cultural phenomenon, Nicole Valentine, fintech director of the Center for Financial Markets at the Milken Institute, a nonpartisan think tank, said in an interview.
“I do think that there still will be dinner table conversations around crypto,” Valentine said. “For one thing, people still have a fear of missing out. … We should be asking ourselves questions about how we’re developing and building this industry. I don’t see it dying, and I don’t see it losing its cultural interest at this point.”
