I’m starting realize that Vitalik was miles ahead of the rest of the industry when he prophesied that highly financialized crypto products have a hard ceiling on value.
Everyone is bullish HYPE rn, and there’s probably good upside potential there for traders. But how much upside realistically?
Let’s say HL becomes wildly successful. It’s mcap would probably trade at some modest multiple of the NASDAQ (~$55B), for arguments sake, let’s say 3x.
That would translate to a hefty $165B dollar HYPE valuation. Thats about a 4-5x price increase from its current level. And that’s on the most optimistic scenario.
Or a more reasonable comparison would be to that of present day Robinhood (~$80B mcap), which is a mere 2x from HYPE’s current Val. Again, this is in a very optimistic scenario.
The reason for this capped upside is that financial applications are but a small part of societal utility. The largest companies in the world sell goods and services unrelated to finance.
Google - An internet and digital products conglomerate - nothing to do with finance
Nvidia - chipmaker - nothing to do with finance
Meta - social media monopoly - nothing to do with finance
Tesla - EV maker / robotics company - nothing to do with finance
SpaceX - aerospace company - nothing to do with finance
EliLilly - pharma company - nothing to do with finance
Apple - computer and smart phone producer - nothing to do with finance
The list goes on and on and on.
For crypto to level up from here, we need to begin building non-financial (or semi-financial) use cases that are enhanced by decentralization.
Money and Finance were the proof of concept for crypto, but we need to begin venturing outside of that bubble.
If you peer hard enough, you’ll realize that Vitalik was 1000% right when he said that indexing too much on finance will make crypto an ouroboros.
That’s not to say that DeFi is small potatoes.
Quite the contrary, I think DeFi will eventually enable finance to grow much larger than its present day size.
But that doesn’t mean it’s wise to make DeFi the only onchain use case.
The leap doesn’t have to be too foreign either, imo the crypto industry as a whole can grow big time simply by combining the best of what we have in DeFi right now to create semi-financial super apps.
The lowest hanging fruit here is decentralized social media with some financial gamification built in.
Other more futuristic applications that are far above my pay grade would be zk-proven LLMs that use crypto-economics for verifiable compute.
But we need to begin building in these directions.
Failing to do so means the upside for all of us will remain severely capped.
A 5x isn’t cool.
You know what’s cool? 500x.
The year of the tail eating snake is over.
The year of the conquering Horse is here.
Time for crypto to stop eating its own tail and begin conquering uncharted territory outside of money and finance.