Jason Yanowitz: Crypto’s identity crisis in the mainstream, the urgent need to rebuild trust, and the shift from adversaries to partners with banks | Bell Curve

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Key takeaways

Crypto has evolved from a fringe movement to a mainstream ideology, creating an identity crisis.
The industry is reevaluating its stance on banks, moving from adversarial to potential partnerships.
A trust problem is central to crypto’s current challenges, exacerbated by the lack of a clear adversary.
The crypto market faces issues with broken assets and diminished trust.
The median net return of tokens over the last five years is down 80%, highlighting industry problems.
Trust is becoming a fundamental selling point for the crypto industry.
The current state of the crypto industry is broken and faces existential challenges.
Despite an increase in assets, the average token’s market cap is similar to July 2020 levels.
The relationship between price and revenue in crypto has decoupled, impacting token prices.
Investor trust issues are significant, with confusion over token vs. equity valuation.
The crypto industry’s credibility is affected by major failures like FTX.
Institutional involvement and regulatory issues present ongoing challenges for crypto.
Token supply inflation impacts market cap trends, indicating potential market corrections.
Revenue generation alone does not drive token prices, complicating market dynamics.
The industry’s future growth depends on addressing the trust problem and asset performance.

Guest intro

Jason Yanowitz is the Co-Founder of Blockworks, a media, events, and data company focused on crypto and traditional finance. Prior to Blockworks, he built the business development team at Sisense, a data analytics startup that raised nearly $300M, and worked in venture capital at Intuitive Venture Partners. Since co-founding Blockworks in 2018 with Mike Ippolito, he has grown it into a profitable business generating over $30M in annual revenue through news, podcasts, events, and onchain data products.

The evolution of crypto’s identity

Crypto has transitioned from a fringe movement to a mainstream ideology, leading to an identity crisis.

— Jason Yanowitz
The shift from a countercultural movement to mainstream acceptance presents new challenges.
Crypto in many senses was an industry and a technology but it’s also kind of a political movement.

— Jason Yanowitz
The mainstreaming of crypto has led to an identity reevaluation within the industry.
Understanding the evolution of crypto is crucial for grasping its current challenges.
Now that it won, it moved from being a movement which is on the fringe to one which is in the mainstream.

— Jason Yanowitz
The transition has caused crypto to struggle with its identity in the mainstream.
The industry’s ideological roots influence its current dynamics and challenges.

Reevaluating relationships with banks

The crypto industry is currently in a phase of ideological reevaluation as it transitions from viewing banks as enemies to potential partners.

— Jason Yanowitz
Historically, crypto viewed banks as adversaries, but this dynamic is changing.
Crypto has always had it was us versus the banks.

— Jason Yanowitz
The potential for banks to become customers alters the crypto landscape.
Understanding this shift is essential for future collaborations between crypto and traditional finance.
The reevaluation of bank relationships signals a maturing industry.
The change in stance towards banks reflects broader industry transformations.
What happens when the banks actually start coming in and they’re actually the customers?

— Jason Yanowitz

The trust problem in crypto

The crypto industry is facing a trust problem, which is exacerbated by the lack of a clear enemy to rally against.

— Jason Yanowitz
Trust issues are central to the industry’s current challenges.
The absence of a clear adversary complicates efforts to unify the industry.
What’s happening at the heart of crypto right now is a trust problem.

— Jason Yanowitz
Addressing the trust problem is crucial for the industry’s credibility and growth.
Major failures like FTX have intensified trust issues within the market.
The industry’s future depends on resolving these trust challenges.
We need something else to rally the troops.

— Jason Yanowitz

Challenges with broken assets

The crypto industry is facing a fundamental issue with broken assets and a lack of trust.

— Jason Yanowitz
Asset problems are at the core of the industry’s current difficulties.
Understanding the state of crypto assets is key to addressing market challenges.
We have an asset problem and we have a trust problem.

— Jason Yanowitz
The industry’s credibility is affected by the performance of its assets.
A lack of trust exacerbates the issues with broken assets.
Addressing these challenges is essential for the industry’s recovery.
That’s the core of what’s happening right now.

— Jason Yanowitz

Declining token returns

The median net return of a token over the last five years is down 80%, highlighting the industry’s problems.

— Jason Yanowitz
Token performance metrics underscore the severity of industry issues.
Historical performance data provides insight into the market’s decline.
The median net return of a token over the last five years is down 80%.

— Jason Yanowitz
The decline in token returns reflects broader market challenges.
Understanding these metrics is crucial for navigating the crypto market.
The industry’s problems are evident in its performance data.
That’s the problem with the industry.

— Jason Yanowitz

Trust as a selling point

The crypto industry is converging on the idea of trust as a fundamental selling point.

— Jason Yanowitz
Trust is becoming central to the industry’s value proposition.
Traditional finance professionals emphasize trust in their offerings.
If you were to ask a fidelity product manager what are you selling they would say trust.

— Jason Yanowitz
The shift towards trust reflects a maturing industry.
Prioritizing trust is essential for crypto’s growth and acceptance.
The industry’s focus on trust aligns with mainstream financial practices.
The whole industry is converging on this same idea of meeting trust.

— Jason Yanowitz

Existential challenges in crypto

The current state of the crypto industry is broken and faces existential challenges.

— Jason Yanowitz
The industry is grappling with significant issues that threaten its future.
Institutional involvement presents both opportunities and challenges.
We talked about the institutional bull bull market… that’s something that’s really broken.

— Jason Yanowitz
Regulatory issues add complexity to the industry’s landscape.
Understanding these challenges is crucial for stakeholders navigating the market.
The industry’s future depends on addressing these existential issues.
Still existential to the industry.

— Jason Yanowitz

Market cap trends and corrections

The average token’s market cap is essentially where it was in July 2020, indicating a significant decline.

— Jason Yanowitz
Despite asset growth, market cap levels remain stagnant.
Token supply inflation impacts market cap trends.
The average token is essentially where it was in July 2020 pre two bull markets ago.

— Jason Yanowitz
Understanding these trends is key to anticipating market corrections.
The decline in market cap reflects broader industry challenges.
Historical data provides insight into the market’s performance.
If you look at it from the peak, the average token is down about 50% in market cap terms.

— Jason Yanowitz

Price and revenue decoupling

The relationship between price and revenue in the crypto market has decoupled.

— Jason Yanowitz
Increased on-chain fees do not necessarily lead to higher token prices.
It’s not just a revenue story… back in 2021 price and revenue… matched up pretty well.

— Jason Yanowitz
Understanding this decoupling is crucial for navigating market dynamics.
The assumption that revenue generation drives prices is challenged.
Market complexities impact token price movements.
We generated a ton of on-chain fees and the prices didn’t move.

— Jason Yanowitz
This decoupling reflects broader changes in the market’s dynamics.

Investor trust issues

There is a significant trust problem among investors in the token space.

— Jason Yanowitz
Investor confidence is affected by trust issues in the market.
Confusion over token vs. equity valuation complicates investment decisions.
There’s a trust problem investors have stopped.

— Jason Yanowitz
Understanding these dynamics is crucial for addressing investor concerns.
The lack of shared understanding impacts market valuation.
Trust issues are central to the industry’s current challenges.
They never really understood what the difference was between a token and equity in the project.

— Jason Yanowitz