Some Are Saying Crypto Is Dead—Are They Right?

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Is crypto dead? Is there hope for its revival? Are there other uses for blockchain technology?

In November 2021, the price of Bitcoin peaked at over $68,000. A year later the price had dropped below $18,000 and the cryptocurrency industry witnessed the collapse of the cryptocurrency exchange FTX. Today, the promising world of virtual currencies is growing more fringe and isolated.

Keep reading to learn why some are saying “crypto is dead” in 2023.

Is Crypto Dead?

Cryptocurrency, or crypto, is a digital currency that uses advanced mathematical algorithms and techniques that make it nearly impossible to counterfeit or spend the same unit of currency twice. Many cryptocurrencies operate on decentralized networks called blockchain technology, which uses a secure, distributed system maintained by a diverse network of computers. 

However, the health of crypto began to deteriorate in mid-2022 after a series of cryptocurrency collapses triggered a wave of bankruptcies among crypto lenders. The implosion of the $32 billion cryptocurrency exchange FTX later that year rocked the crypto world and prompted congressional and SEC investigations, leading some to ask whether crypto is dead.

View 1: Crypto Is Dead

A key reason experts say the cryptocurrency industry may be on its last legs is that it faces a regulatory crisis. Crypto companies had operated largely unregulated until recently, when the US Security and Exchange Commission (SEC) intensified enforcement of the industry. In June, the SEC sent a shot across the bow when it charged top crypto companies Binance and Coinbase with: a) running unlicensed US exchanges for unregistered financial securities, and b) illegally merging brokerage and clearing. Many crypto firms would struggle to profit or survive under government regulation. And with 150 SEC crypto lawsuits in play, US crypto exchanges may be forced to comply with regulations or shut down.

Experts cite a number of additional reasons that crypto may be on its last legs: 

  • Price collapses. As a whole, cryptocurrencies’ value is down almost two-thirds since their November 2021 peak, and trading volumes are a fraction (less than 10%) of their highest recorded levels.
  • Investors have moved on from crypto, taking billions of dollars with them.
  • Scams. Fraud has penetrated every aspect of crypto, from big firms to small, and from stable coins to exchanges, NFTs, initial coin offerings and tokens.
  • Bubbles and volatility. Though many financial assets regularly go up and down in price, crypto’s highs and lows have been wildly unpredictable.
  • Crypto is cryptic. People won’t invest in what they can’t understand. Fourteen years after the birth of blockchains, many people still don’t understand how they work.

View 2: Crypto Isn’t Dead

Other experts say that while some parts of crypto are dead—like the dream that the digital currency would eliminate the need for the Federal Reserve, replace Wall Street and Main Street, and transform the web into Web3—other aspects are alive and well:

  • Bitcoin remains popular. People still see Bitcoin as a good investment opportunity, and the currency remains a good way to send money in situations where stable banking networks aren’t a viable option.
  • Blockchain is a strong, general-use technology with the potential to disrupt industries outside of finance, including health care, voting systems, and supply chain management.

Why Bitcoin Makes Good Money

In The Bitcoin Standard, Saifedean Ammous explains that there are two properties that determine how suitable something is for use as money: ‘salability’ and ‘hardness.’ Then there’s the issue of trust in the payer: The form of money can influence the likelihood of a transaction failing due to nonpayment. We’ll discuss each of these factors in turn to show why Ammous thinks bitcoin makes good money.

Bitcoin Has Good Salability

As Ammous uses the term, ‘salability’ is the ability of something to transmit value. He says there are three dimensions to salability: scale, space, and time.


The scale-salability of something is its ability to transmit value between purchases of different size. For example, maybe you sell something of great value, like a house, and then you want to use a little bit of the money from the sale to purchase something of small value, like a loaf of bread. The scale-salability of something that is used as money depends mostly on how easily divisible it is into units of different value. 

Bitcoins have excellent scale-salability because they’re easily divisible in practice: The bitcoin network supports transactions as small as 0.00000001 bitcoin. So you could sell a house for 25 bitcoins and buy a loaf of bread for 0.00015 bitcoins without any trouble.


The space-salability of something is its ability to transmit value over geographical distances. For example, maybe you want to sell a house in New York and buy one in Colorado. If your buyer offered to pay in either gold or cattle (both of which Ammous notes have historically been used as money), it would be much easier to carry 250 gold coins with you across the country than to transport 250 head of cattle. As such, gold has much better space-salability than cattle.

Bitcoins have excellent space-salability because they only exist as entries in a digital ledger, which is stored redundantly on many “nodes” throughout the world and accessed via the internet. So you can access your bitcoins from anywhere in the world, provided you can connect to the internet. 


The time-salability of something is its ability to transmit value across time. For example, maybe you want to save up for a big purchase over a period of years or decades. Ammous warns that if you try to save up your money in dollars or other fiat currency, your savings will lose value over time due to inflation. 

At present, bitcoin’s time-salability is not as good as its scale-salability or space-salability because its value fluctuates unpredictably. Ammous discusses several factors that contribute to bitcoin’s volatile price. 

Bitcoin Is Hard Money

Bitcoin’s time-salability isn’t ideal because bitcoin’s value tends to fluctuate, but Ammous asserts that despite these short-term fluctuations, bitcoin does have good time-salability in the long run because it is a very “hard” currency, and thus does not lose value due to inflation.

Ammous explains that the “hardness” of a type of money is the ratio of the total quantity in circulation to the maximum amount that could be added in a given amount of time, usually one year. 

For example, wheat has a very low hardness, because it is produced and consumed every year, and so the total supply is about the same as the annual production. By contrast, gold has a very high hardness, because it is relatively scarce and humans have been stockpiling it for thousands of years, so the amount of gold produced by gold mines in any given year is only a tiny fraction of the world’s total gold supply. 

Bitcoin is designed such that bitcoins are added to circulation at a predictable rate that is halved every four years, and will cease altogether once the total number in circulation reaches 21,000,000 bitcoins. Thus, bitcoin has a high hardness, and that hardness will continue to increase until all the bitcoins are in circulation, at which point its hardness will become infinite.

Hard Money Prevents Inflation From Redistributing Wealth 

Ammous demonstrates the importance of hard money by observing what happens to a society that uses money with low hardness: Over time, all the real value in that society goes to those who provide the supply of money.

As Ammous explains, this is because there’s always a demand for any material that a society uses as money (such as gold or silver), which motivates people to produce it (for example, by mining gold). Yet, increasing the money supply decreases the value of the money that’s already in circulation. 

It takes time for the economy to adjust to changes in the value of money, so when producers of money (such as gold miners) sell their product, they receive more payment for it than it will be worth once the economy adjusts to the increased money supply. This is what allows the producers of money to accumulate a greater and greater fraction of society’s real wealth over time.

If the society uses hard money, such as gold or bitcoin, the magnitude of this effect is small. But it gets larger the faster the money supply increases. For example, if the money supply abruptly doubles, then the value of money will be cut in half, so the people who increased the supply will acquire half of the total value that the money supply represented before it doubled.

Bitcoin Is Based on Verification Instead of Trust

Ammous asserts that the final desirable characteristic of bitcoin is its system of complete verification, which eliminates the need for trust. 

He explains that many other types of transactions require a degree of trust: If someone writes you a check, you’ll only accept it as payment if you trust that their check won’t bounce. If someone pays you with a credit card, the credit card company acts as a trusted third party, verifying her credit and guaranteeing payment of her debts. But that means the credit card company can block any transaction that it disapproves of, even if the payer and the payee both approve of it. But with bitcoin, there’s no need to trust either the payer or a third party because of its system of complete verification.

Complete verification means that the network first checks to make sure the payer can make the payment (they have sufficient funds in their account) and then irreversibly transfers the funds, ensuring that the payer does make the payment. Furthermore, these checks are performed not just by a single payment processor, but by a majority of the network—a large number of independently-operated servers all over the world. To default on a payment or make a fraudulent payment, the payer would have to gain control of a majority of the entire bitcoin network, which, as we’ve discussed, would be virtually impossible. This is how the network ensures that the payer can’t default, eliminating the need for trust.

Ammous points out that this is ideal for settlements between parties located in different countries, who might have limited options for enforcing an agreement to pay. It also means that all bitcoin transactions are final, irreversible, and immune to third-party stipulations, much like paying someone in cash or gold. 

But, as Ammous concedes, this approach also creates a large amount of redundancy (relative to using a trusted third party like a credit card company) since each transaction is independently verified by a majority of the entire network, not just a single server. This redundancy reduces the efficiency and speed of processing transactions. 

Looking Ahead 

Though crypto has a lot working against it, some experts caution against counting it out in the years ahead. Beneath the digital currency’s troubles lies its potential to empower Americans to take back financial and political control at a time when many feel they have neither. To survive and fulfill this promise, the crypto industry will have to overcome its reputation for fraud and abuse, earn back public trust, and demonstrate to central bankers that digital currencies don’t pose risks to monetary policy or existing payment infrastructure.

Some Are Saying Crypto Is Dead—Are They Right?

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Hannah Aster

Hannah graduated summa cum laude with a degree in English and double minors in Professional Writing and Creative Writing. She grew up reading books like Harry Potter and His Dark Materials and has always carried a passion for fiction. However, Hannah transitioned to non-fiction writing when she started her travel website in 2018 and now enjoys sharing travel guides and trying to inspire others to see the world.

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