Pay no attention to crypto prices

Crypto is completely dead lately – if you just look at the price action.

Yes, Bitcoin is down 72% from its all-time high price in November 2021, almost a full year ago. Ethereum is down the same, 72% from its own high of $4,878. Whew.

Crypto advocates point out that it’s not just crypto, stocks have also been hammered. And they’re right: everything is down right now. But that’s cold comfort to crypto believers, who—I’ll tell you a little crypto media trade secret—don’t care to read crypto news when crypto prices are down. ConsenSys CEO Joe Lubin put on a brave face last week when he talked to me about the technological success of the Ethereum merger, but ETH is down a disappointing 21% since the event.

For a better temperature check on how crypto is doing, look at the key recent signs of mainstream adoption. Over the past two months, we have received a number of indications that major financial institutions and technology companies believe crypto is here to stay. You’d be forgiven for missing these breaking news stories as the global economy collapsed around us.

In August, BlackRock, the largest asset manager in the world, launched a spot Bitcoin private trust to give its clients exposure to the current price of Bitcoin. (As a reminder, the SEC has steadfastly refused to greenlight a publicly traded spot Bitcoin ETF, allowing only Bitcoin futures ETFs; but BlackRock can offer its own clients whatever service they want.) BlackRock also said it sees “significant interest ” for crypto. from its institutional clients, and that it is exploring stablecoins and tokenization. Wow.

Bitcoin didn’t budge on the BlackRock news, a sign of how much the economy is weighing on all types of assets.

This past week brought two more great demonstrations of faith.

Google announced that it will start accepting crypto as payment for cloud services early next year by connecting with Coinbase. As part of the deal, Coinbase Commerce will move its “data-related applications” from Amazon Web Services to Google. So not only is this Google Cloud crypto welcome, but also a form of connection between Google and Coinbase.

On the same day, 239-year-old Bank of New York Mellon launched its own custody service for Bitcoin and Ethereum. The bank will keep the customers’ private keys and provide accounting for their crypto portfolios. This follows BNY Mellon becoming the custodian of the cash reserves backing Circle’s USDC stablecoin in March. And last year, BNY Mellon launched a Bitcoin custody service in Ireland.

All this may appear to scoffing crypto-skeptics as an attempt at rationalization. The preferred mantra of Web3 builders, “bear markets are for building,” is so often repeated at times like these that it has become cliché. That doesn’t mean it’s untrue.

I first wrote about Bitcoin in 2011 and have seen the down cycles of 2014, 2018 and now. Some of the most famous crypto companies and platforms were built during these “winters.”

Lubin says crypto is “the tail wagging a very sick dog” right now, and that it won’t get better until the economy improves. Solana founder Anatoly Yakovenko believes it could take 12-18 months.

Meanwhile, they’re all still building, as signs of future adoption emerge.