Indulge me for just a minute. For more than a year now, I’ve watched the industry I cover with a mix of disbelief and despair—there are only so many hacks, frauds, and arrests you can witness without getting jaded. But this week, for the first time in months, I felt something else: optimism.
The feeling came as the price of Bitcoin reached its highest level since 2022 on Tuesday, and amid a growing consensus the SEC is on the cusp of approving applications for a Bitcoin ETF, and that it will soon do the same for Ethereum. When this happens, ETF providers like BlackRock and Fidelity will likely nudge the thousands of funds they serve to add a small percentage of crypto to their portfolio, driving the price up further. By mid-2024, memories of post-FTX Bitcoin at $15,000 could become quite distant, as the top cryptocurrency—currently sitting above $34,000—climbs to $50,000 and beyond.
This has certainly happened before. I recall Bitcoin shaking off a post-crash low of $300 in 2014 to climb to nearly $20,000 in 2017, and then, in the next cycle, recovering from a then-floor of $3,000 in 2018 to go all the way to its all-time high of around $65,000. Crypto aficionados with a technical bent say the industry operates in four-year cycles and that we are entering the upswing of another one. They’re not the only ones—Morgan Stanley just published a report titled “Will Crypto Spring Ever Come?” that suggests the worst is over.
If the good times are indeed returning, it’s interesting to consider who the winners of this cycle will be. In the 2017 boom, cryptographers and technology experts reaped newfound crypto riches, while in 2021 money also flowed to chipmakers and to artists through the NFT market—and also to Lamborghini dealers and makers of tungsten cubes. When it comes to the current cycle, one of the biggest beneficiaries is likely to be the traditional financial industry, which is not only seeking to dominate the impending ETF market but is making use of crypto for payments and settlements.
This would be an ironic outcome. After all, Satoshi Nakamoto founded Bitcoin to usurp the traditional banking industry—not empower it with new tools. But I don’t think it’s a zero-sum game. Even if legacy companies reap a big part of the next crypto boom, there will be plenty of other winners—including long-suffering exchanges like Coinbase and the entire Ethereum ecosystem. Meanwhile, if past booms are an indication, there will be an appetite for startups with new ideas. And maybe this time around, investors will actually remember to do due diligence instead of shoveling money to fly-by-night projects and con men.
Remember this is all a best-case scenario. It’s also very possible that a fresh wave of regulatory crackdowns or another massive collapse (you doing okay, Binance?) could snuff out the current rally before it properly takes off. But for today at least, let’s be optimistic.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
