Have you got your skis on yet? This will be the last crypto winter. So, if you haven’t got your skis on yet, get them and enjoy yourself. This is the third or fourth crypto winter, depending on your count. It’s certainly the most frustrating and difficult one, but it will be the last one. Let me explain: Crypto and Blockchain are about to become normal, regulated businesses. It’s difficult to distinguish between signals and noise but I see three positive signs in the future.



Paul Brody, EY’s global leader in blockchain and a CoinDesk contributor.

Increased enforcement actions by law enforcers

In the world of blockchain and crypto, there has always been a tension between do-gooders with rosy-eyed intentions (me included) and those who are ruthless and want to use that message for their own gain. It has been frustrating to see warnings about the speculative, dangerous and absurd nature of certain crypto and blockchain investments not being heeded. EY warned in 2018 about the abysmal performance of initial coin offering (ICO) and we did not speak alone. Warnings and social media flame-wars are not as effective as enforcement actions.

Inconsistencies and contradictions in public policy

The regulatory systems in many countries, including the U.S., are complex and decentralized. We shouldn’t be surprised if regulators do not agree on policy immediately. It is important that the legal system tries to give a consistent meaning to how the law is used. In these cases, regulators should present a consistent and clear opinion on what the law is. It will take time for this clarity to be apparent, but it will.

Product leadership in the industry

When expectations and excitement outstrip companies’ ability to deliver products and generate revenues, the boom-and bust cycle in the tech industry occurs. In the early 1980s when PCs and video game systems were introduced, the industry was not ready to adopt them. In the late 1990s, a second, larger boomcycle emerged as the network technologies and internet created tremendous excitement, but little in the way revenue or profit. The dot-com boom was similar to the crypto and blockchain business models of 2018-2022. Companies went public or raised hundreds of millions without any revenue or even a well-structured plan.

It is worth remembering the parallels between the dotcom boom and bust. Both industries experienced huge increases in valuations and investment based on what seemed like impossible future capabilities. In 1999, there were about $350 billion worth of digital online transactions. However, most of these transactions used legacy B2B software such as Electronic Data Interchange. This was not consumer ecommerce via a web-browser. At the height of the dotcom boom, major investment banks and academics made bold predictions that online commerce between $6 trillion and $4 trillion would occur annually by 2005. It was a joke. Total e-commerce, of the web browser type for consumers, reached $105 billion dollars in 2005. It’s no surprise that the market values plummeted and many of these generously funded firms went bankrupt. The technology market cap of nearly $1.75 trillion evaporated in 2000 alone. If you’re keeping score at home, this is more than $3 trillion dollars in 2023 and the entire market capitalization of the blockchain ecosystem.

The story becomes interesting when we realize that e-commerce is now everything we were promised back in 1999. In 2022, it is estimated that global ecommerce spending will be close to $5 trillion. In 2022, it surpassed $1 trillion in the United States alone. Market capitalization for the top 10 technology companies in the world is around $7 trillion. The U.S. market is dominated by technology stocks, which are larger than both the financial and energy sectors combined. While there have been some ups and downsides, there hasn’t been a technology bust since the year 2000. It’s because technology has become an industry that values are based on revenue and profits, rather than fanciful predictions about the future.

As well, signs of mature blockchain and crypto businesses and products are beginning to appear. Although it is still early, non-fungible (NFTs) tokens seem to have a permanent spot in the user and businesses ecosystems as digital trophies and tickets, as well as proofs of engagement and attendance. Anyone can now offer NFTs because they are so easy to create. Do you want my NFT of the month? Claim it Here. EY is seeing “boring” business like supply chain management, tracking emissions and product traceability grow as industrial companies use blockchain for applications that are not related to financial engineering. Privacy technology, which is not to be confused with anonymousness, has been key in unlocking practical uses cases for companies who want to leverage public technology infrastructure while protecting their sensitive business data.

The blockchain industry will also have a bright future as we work to clear the debris of the crypto-winter. The bad actors will be sent to prison. The rules are becoming clearer. Most importantly, companies in this ecosystem have started to create real products, and their valuations are based on revenues and profits. As a result, blockchain and crypto are able to become regular industries that have regulated products and services that are easily accessible. We will still experience ups anddowns as a regular business, but there won’t be any ridiculous booms or busts. Enjoy this crypto winter. This is the last crypto winter you will ever get.

Jeanhee Kim is the editor.