Crypto Largely a Failed Asset Class, But Blockchain Innovation Continues, Says Analyst
Economist and macro trader Alex Krüger has asserted that “crypto” has largely failed as an asset class, despite accelerating adoption of blockchain-based technologies across stablecoins, tokenization, prediction markets, perpetual futures, AI, and privacy-focused assets. In a recent post on X, Krüger drew a clear distinction between the speculative crypto market of past cycles and the segments of the industry he believes are still demonstrating significant traction.
His central argument was stark: most crypto tokens have failed to generate lasting value for their holders, while founders and insiders have repeatedly exploited the sector’s limited regulatory oversight to extract liquidity from retail investors.
“I largely think of ‘crypto’ as a failed asset class at this point,” Krüger stated. “I’ve written about the causes multiple times. Mainly, most crypto assets are worthless, or have dreadful value accrual, and most founders have abused the lack of guardrails and dumped on people indiscriminately, or are outright scammers.”
Krüger attributed further damage to what he termed the “Memecoins SuperBullshitCycle,” describing it as a speculative trend that “brought the worst out of people” and depleted both capital and morale among market participants. He also highlighted the “never-ending wave of DeFi hacks,” which he noted has increased sharply since last April, as another factor undermining crypto’s credibility as an investable asset class.
Krüger Sees Adoption Rising, But Not in “Old Crypto”
The economist acknowledged that his assessment might appear contradictory, given the rapid expansion of several blockchain-linked sectors. He pointed to growing stablecoin adoption, the emergence of openly pro-crypto politicians in the United States, traditional finance’s push to tokenize assets, increased use of equity and commodity perpetuals on offshore and DeFi platforms, the early development of U.S. perpetual futures markets, and the growing presence of prediction markets in everyday information flows.
However, Krüger framed many of these trends as being “more ‘blockchain’ than ‘crypto’,” suggesting that while the infrastructure and application layers may be advancing, the legacy token market remains structurally weak. In his view, the key exceptions are where tokens exhibit clearer links to revenue, user demand, or capital return mechanisms.
“A few among those exceptions even distribute most revenue to holders via buybacks,” he wrote, specifically naming Hyperliquid. “Which is what every investor actually wants to see to be invested in a good business rather than a fleeting narrative.”
This distinction lies at the heart of Krüger’s argument. He is not suggesting that blockchain-based markets are defunct. Instead, he contends that broad, narrative-driven crypto exposure has failed to deliver the value accrual that investors were promised, while a more select group of sectors has begun to resemble operating businesses or infrastructure plays.
Privacy and AI Stand Out
Krüger identified privacy as one of the few “old school” crypto categories that retains relevance. He argued that demand for private, non-custodial stores of value is genuine, even if some of that demand originates from illicit flows. He referenced the U.S. Department of Justice’s seizure of $15 billion in Bitcoin from Cambodia-linked pig butchering operations, noting that the legal filing was submitted on October 8, 2025.
“Of course, everyone needs privacy, not just criminals, but crime flows are real, and large,” Krüger wrote. “The asset attracting the most flows in this niche is Zcash. Zcash’s recent performance has been fascinating, as it has been trending higher with bitcoin trending lower, a sign of real reallocation among bitcoiners.”
The other category Krüger believes is not dead is AI. However, his view of this sector was selective. He described most AI tokens as “high flying, fundamentally lacking, narrative driven tokens,” while singling out Venice as a standout, which he sees as tied to a private AI platform with growing users and revenue.
This leads Krüger to a more nuanced conclusion than his initial headline claim might suggest. He views the old token market as broken, but not the broader trajectory of crypto-enabled infrastructure. Stablecoins, tokenized assets, prediction markets, perpetual futures, AI, and privacy may constitute the sector’s next investable narrative, provided the associated tokens can demonstrate actual value capture rather than recycled speculation.
“So one could say old ‘crypto’ is a failed asset class,” Krüger wrote, “but from the ashes come new beginnings, and the new face of crypto is one heavily dominated by the needs of Tradfi, prediction markets, AI, and privacy.” His closing remark encapsulated the contradiction he perceives in the market: “Crypto sucks. Long live crypto.”
At press time, the total cryptocurrency market capitalization stood at $2.28 trillion.
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