Cryptocurrency is viewed as a grand casino for people to get rich almost overnight. Everyone wants to repeat what happened to those HODLing Bitcoin from the early days. The stories of Bitcoin millionaires are all over the place. Of course, one lesson to take away from their path is the ability to hand in there. Bitcoiners are known for their resiliency, something that might not be a characteristic of the later entrants into cryptocurrency.

Of course, much of this could stem from the fact that most are looking at cryptocurrency simply as a financial tool that one can make money from. The early Bitcoin adopters believed in the technology behind it and what they thought it could do for humanity.

This made price the primary focus of people. When the like of CNBC finally talk about cryptocurrency, sans the FUD, it is always in the context of price and where "the market is going". This further reinforces this idea that cryptocurrency is nothing more than a financial instrument.

Now that we saw a major reversal in the market, perhaps we are seeing the clearing out of the excess. It could be that people are leaving simply because the wounds of the market are too deep.

Where Is The Utility

A number of years ago, the talking point around cryptocurrency by those who questioned it was "what problem does it solve". This was a legitimate inquiry which emphasized the main point: what does it do?

It does not appear we see this asked anymore. The answer simply is presumed to be that one can make money off cryptocurrency. It is the only thing that matters.

Here we see how misguided this thinking can be. It is also something reflected in how the market prices different projects. Those with hype, a name, and perhaps some charisma get a lot of the attention. We also see the crypto-media playing into this by writing about these same projects even though little is truly taking place on them.

Thus, when we look at the markets for validation on projects, we might be putting our faith in something completely amiss.

At the end of the day, utility is an important component. If projects do not have use cases beyond a token, then it will fail. We often make the comparison to the early days of the Internet. Imagine for a second if this medium was developed and nobody used it. What would the value of the companies or projects online been worth?

The answer is clear. Without utility, all would be basically worthless.

The Demise Of The Mania

Bull markets create a mania. It is a time when logic goes out the window and people do some incredibly foolish things. This happens in all markets, regardless of the asset classes. Ultimately, markets are simply driven by human psychology which is why we see similar behavior in all of them.

Once the FOMO kicks off, everything changes. Mania sets in and people throw their money at whatever "is hot". They fail to look at anything sensibly. Perhaps we could say the craze with DOGE coin is a prime example of that. It seems that token skyrocketed based upon FOMO by an overall group of inexperienced investors while being egged on by the likes of Elon Musk and Snoop Doggy Dogg. These people failed to ask what purpose does this serve?

We also saw similar behavior in the NFT market. While many believe NFTs are a huge deal, the behavior was quite entertaining. It also bordered on the line of completely insane.

People were scoffing up whatever they could. Every NFT they bought was based upon the idea that it would moon. After all, this artist produced 10 digital works in the last week, so why wouldn't he or she be the next big thing? The reality is that when mania is in operation, everyone better be careful.

That does not mean that we are not seeing advancements that could radically alter things such as ownership of digital assets. Personally, it looks like that is the direction we are headed. Simply because it is easy to create ownership of a digital asset does not mean that asset has value. This is the distinction that many missed.

With the collapse in general cryptocurrency prices, the air came out of the NFT market also. The mania died a quick death, something that was foreseen by many. Behavior like this does not last forward.

What Is The Next Step?

Now we are confronted with where the industry is going. Make no mistake, we know speculation is going to be a part of the equation. There will come a time when the prices start to move higher. The strong hands are already preparing for this. Of course, as they head higher, more will be drawn in until the mania returns.

What was underlying all of this is now being exposed. Once we remove the excess we see what truly was taking place: development. The entire time, through both the bear and bull, people were building. They were hacking away at their keyboard, coding projects they believe have a future. They are looking for answers to problems they see out there.

A prime example is what came out of Brave the last couple of days. The Brave browser is entering beta with a new feature; a built-in, private search engine.

The new platform has not only been built on top of a, “completely independent index”, but it also promises not to track users in any way, including their searches or clicks.

Projects like this reveal the potential that is being created. At some point, we are going to see those that provide utility getting the attention. With so much "wrong" with the Internet, that are plenty of things to upgrade. Here is where we see the opportunity.

Web 3.0 and the advancement towards the Metaverse is a major deal that is going to take time to unfold. Nevertheless, as the excess is stripped away, we can see where progress is being made.

While the present bull market might not be over, instead opting for a breather, we can see marked differences between today and 4 years ago. The progress that was made in terms of development and applications with use cases is much further down the road. There are projects like Brave that are truly entering the realm of the Big Boys like Google in an effort to provide a viable alternative. We will have to see what that browser can do in that arena. Nevertheless, it does epitomize what is taking place.

Thus, we just keep building and developing. The Internet was not created overnight and took years to become an instant success. It is likely that cryptocurrency and all that is involved with it will follow the same route. People didn't understand the need for much of the online activity in the early days either.

Sometimes we simply need to clear out the excess to see what is really taking place.

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