Crypto in January 2022
The one thing you have to understand about crypto is two things.
First, it's constantly diluting the language it invents to make sense of itself — to the point of near meaninglessness.
Second, everything moves too fast, including the immolation of its own sense-making apparatuses.
This is important somewhat ironically because the core theme in January 2022 on the many blockchains was this: are we slowing down?
There was a vibe throughout crypto that we could be headed into a bear market. Here's where we get to language: the traditional definition of a bear market (20 or 30% off a high point) is nonsense in crypto. Number go up. Number go down. We can do 30% on a Sunday from a mean tweet by Elon. It's nothing.
A bear market in crypto is another thing. A bear market is when a pall falls. This is still a relatively small space. It's not so small as it was, but it's small enough. It's a bear when we collectively feel a fear that we have run out of things that make everyone from Gen X and up go "What the fuck!?" And everyone from Millennial down go "What the eff?!?"
The key news of the month should have been bullish for the indie nature of the crypto industry. Facebook (you can call it Meta if you want) admitted defeat on cryptocurrency. That was the very end of the month. But Facebook is the king of chasing other people's ideas and if its people no longer believed the company could steal some of cryptocurrency's valor in the near term that could indicate a diminish supply of valor to steal.
To normies, this looked like a big month for crypto. It opened with OpenSea, the NFT marketplace, securing a $13.3 billion valuation. Mid-way through word came that a16z was looking at a fresh $4.5B fund, meaning the already over-inflated funding rounds in the space were going to get even nuttier. It ended with Zuck getting out, with no intention any longer of throwing Facebook and WhatsApp's firepower behind everyone's beloved stablecoins.
Crypto denizens — mostly through private channels — knew there might be a different way to see it. A truth of investing that is even more true in these markets: sell the news.
The news feels too big.
Is there actually enough people to do all the work that can be funded with amounts that large? And are there enough people interested in crypto that can make use of all that work once it's done?
It felt maybe, possibly, like a top signal. Not a top in price. A top in vibes. That's what crypto really runs on: confidence and excitement. At least that is what it runs on for now.
And all that big news felt like it might be a little too much. No one was certain and everyone on Crypto Twitter would flame at anyone who had the temerity to so much as drop a bear emoji in a group text.
But there were bears in people's minds — all over people's minds.
The fact that Facebook was copying a bunch of prior crypto projects shouldn't have discouraged Menlo Park. Copying good work by others in a flashy or splashy way has been a good path to millions or even billions in this space for a very long time.
Look at Doge.
Look at Tron.
And that's why the greatest copycat in all of tech, Facebook, bagging on crypto and its silly coin Diem (née Libra) was the most emblematic news of January 2022.
2021 was a year of "hell yes" in the industry. January 2022 was the month of: Maybe?
March 2, 2022