Crypto Hype Cycles and You

MOSHED-2021-3-31-11-15-52
31 March 2021

Yesterday, Messari founder and CEO Ryan Selkis tweeted that he’s looking to take on 1,000 new analysts and researchers at his boutique, cryptocurrency intelligence firm. It’s the type of goal that has come to define this moment in crypto: equal parts ambition and insanity.

I asked Selkis what he’d do with 1,000 analysts, how he’d coordinate such a team, what resources he’s willing to invest in their training and whether my father should be a fit applicant. He referred me to a blog post he had also tweeted out.

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It begins by quoting from an old newspaper advert:

"’Men Wanted: For hazardous journey. Small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful. Honour and recognition in case of success.’ - Ernest Shackleton, Antarctic explorer.”

The ideal candidate knows there isn’t much glory in writing longform posts about a maligned, though increasing relevant, industry and is probably willing to go unpaid. Stick it out for long enough, however, and you could build a portfolio, reputation and land a job.

Shortly after, Selkis tweeted, “How are so many people still so bad at resumes in 2021?” It may be fair to say his call to action is off to a rocky start, though I have no doubt Selkis will find success along the way.

A previous Messari cohort accepted 70 out of 200 applicants, Selkis wrote, and brought some of the industry’s sharpest minds (Ryan Watkins, Jack Purdy and Mason Nystrom) into the fold.

As others have pointed out, crypto’s greatest strength is its intellectual capital. Hedge fund giant and recent coiner Paul Tudor Jones II praised the “enormous contention of really, really smart and sophisticated people who believe” in bitcoin.

While Nic Carter has noted that even if a disastrous event befalls BTC – like a glitch in the code, a wave of state bans, a precipitous drop to zero – there will likely be enough developers and writers willing to stick around and rebuild.

Bitcoin has similar network effects as other communications and digital systems. While there is clearly cyclical boom and busts – where capital and people rush in, only to leave once the tide turns – bitcoin’s price level has steadily progressed over the years.

Following every major crash, bitcoin finds a higher level of support. After surging to almost $1,000 in 2014, BTC never fell below $200. After nearly reaching $20,000 in 2017, BTC found new footing above $3,000. Today, it’s an open question where bitcoin might stabilize after this hype cycle pops.

I’d argue that a similar phenomenon, harder to measure, governs crypto’s social capital.

“Crypto has exited every cycle stronger than it entered. This is true across all key metrics: entrepreneurial and developer activity, academic research, infrastructural maturity, corporate adoption, public awareness, and simplistic price, among others,” Paradigm’s Fred Ehrsam recently wrote.

According to Gartner, the research and advisory firm, “hype cycles” progress from a technology trigger (when a technology – like non-fungible tokens – lands), to peaks of “inflated expectations,” through a “trough of disillusionment,” up the “slope of enlightenment” and finally arrive at a “plateau of productivity.”

Messari’s 1,000-strong call to action is banking on people’s inflated expectations around the industry. College seniors, disaffected bankers (hi, Dad) and those looking for a change are probably having a hard time ignoring BTC’s surging price and the genuine fun happening in the NFT space.

When the bubble pops, we’ll still be here. 

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