Economist and macro trader Alex Krüger has argued that “crypto” has largely failed as an asset class, even as blockchain-based adoption grows in areas like stablecoins, tokenization, prediction markets, perpetuals, AI, and privacy-focused assets. In a post on X, Krüger made a clear distinction between the speculative crypto market of recent cycles and the parts of the industry he believes are still showing real progress. His main point was blunt: most crypto tokens haven’t created lasting value for holders, while founders and insiders have repeatedly taken advantage of weak safeguards to pull money from retail investors. “I largely think of ‘crypto’ as a failed asset class at this point,” Krüger wrote. “I’ve explained why several times. Mainly, most crypto assets are worthless or have terrible value accrual, and most founders have abused the lack of guardrails and dumped on people without discrimination, or are outright scammers.” Krüger said the damage was made worse by what he called the “Memecoins SuperBullshitCycle,” describing it as a speculative trend that “brought the worst out of people” and drained both money and morale from market participants. He also pointed to “the never-ending wave of DeFi hacks,” which he said has increased sharply since last April, as another factor hurting crypto’s credibility as an investable asset class.
Krüger Sees Adoption Rising, But Not In “Old Crypto”
The economist acknowledged that his view might seem contradictory, given that several blockchain-related sectors are still growing quickly. He mentioned rising stablecoin adoption, openly pro-crypto politicians in the United States, traditional finance’s push to tokenize assets, increased use of equities and commodities perpetuals on offshore and DeFi platforms, early development of US perpetuals markets, and the growing role of prediction markets in everyday information flows. But Krüger framed many of these trends as more “blockchain” than “crypto,” suggesting that the infrastructure and application layer may be advancing while the legacy token market remains structurally weak. In his view, the key exception is where tokens have 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, naming Hyperliquid in particular. “Which is what every investor actually wants to see to be invested in a good business rather than a fleeting narrative.” That distinction is at the heart of Krüger’s argument. He’s not saying blockchain-based markets are dead. Instead, he’s saying that broad, narrative-driven crypto exposure has failed to deliver the kind of value accrual investors were promised, while a narrower group of sectors has started to look like operating businesses or infrastructure plays.
Privacy And AI Stand Out
Krüger identified privacy as one of the few “old school” crypto categories that remains relevant. He argued that demand for private, non-custodial stores of value is real, even if some of that demand comes from illegal activities. He referenced the US Department of Justice’s seizure of $15 billion in Bitcoin from Cambodia-linked pig butchering operations, noting 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 said is not dead is AI. Still, his view of the sector was selective. He described most AI tokens as “high flying, fundamentally lacking, narrative driven tokens.”He highlights Venice as a standout because he sees it as linked to a private AI platform that’s gaining users and revenue. This leads Krüger to a more balanced conclusion than the headline alone suggests. He believes the old token market is broken, but not the broader direction of crypto-powered infrastructure. Stablecoins, tokenized assets, prediction markets, perpetuals, AI, and privacy could shape the sector’s next investable story—if the tokens tied to them show real value, not just 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 line captured the contradiction he sees in the market: “Crypto sucks. Long live crypto.” At press time, the total crypto market cap stood at $2.28 trillion. Featured image created with DALL.E, chart from TradingView.com.
Frequently Asked Questions
Here is a list of FAQs about the claim that crypto is a failed asset class written in a natural tone with clear concise answers
BeginnerLevel Questions
1 What does it mean when someone says crypto is a failed asset class
It means they believe crypto has not lived up to its promises Instead of becoming a reliable store of value or a widelyused payment system they argue its mostly used for speculation is extremely volatile and hasnt solved the problems it set out to fix
2 Why would a wellknown economist say that
Economists often focus on things like stability utility and longterm value They point to cryptos wild price swings lack of realworld use for everyday purchases and highprofile scams or crashes as proof it hasnt become a dependable investment
3 Is crypto actually worthless then
Not necessarily Something can have value without being a good asset class The economists argument is that its failed as a reliable investment or currencynot that its worth 0 Many people still make money trading it but its very risky
4 Whats the difference between crypto and regular money
Regular money is backed by a government is stable and is widely accepted for taxes and bills Crypto is not backed by any government its value changes wildly and very few places accept it for everyday things
5 Hasnt Bitcoin gone up a lot over time
Yes Bitcoin has seen huge gains But the failed asset class argument is about volatility and risk A 50 crash in a month is normal for Bitcoin whereas a stock market crash is a rare event That extreme volatility makes it a poor store of value for most people
AdvancedLevel Questions
6 What specific metrics do economists use to call crypto a failed asset
They look at
Volatility Crypto is 35x more volatile than stocks
Correlation It often acts like a riskon asset rising and falling with tech stocks not as a hedge against inflation
Adoption Very few businesses accept it for payment