Opinion

Tales from the crypto

Crypto has spent much of the past decade cultivating an aura of inevitability. From early adopters to institutional allocators, the narrative has steadily evolved from fringe experiment to “digital gold” and, in some quarters, a supposed hedge against everything from inflation to geopolitical instability. Yet the reality is more nuanced. Crypto is not a panacea and it is not an invincible asset class. Treating it as such risks repeating some very familiar financial mistakes.

Unlike traditional asset classes, which benefit from decades, if not centuries, of regulatory development, liquidity frameworks, and institutional oversight, crypto markets are still evolving in real time. Price formation is often driven less by underlying economic value and more by sentiment, flows, and momentum which underlines why , when confidence is strong, the upside can be dramatic. But this also creates fragility and when sentiment turns, there is often no real anchor to prevent sharp corrections.

You might conclude then that volatility is not just a feature of crypto; it is a defining characteristic. While proponents argue that this volatility reflects growth and opportunity, it also undermines the idea that it can serve as a reliable store of value. Assets that can lose significant portions of their value over short periods struggle to perform this role, particularly in times of broader market stress when diversification benefits are most needed.

The idea of crypto as a hedge against inflation has also proven inconsistent. In theory, limited supply, particularly in assets like Bitcoin, should provide protection against currency debasement. In practice, however, crypto has often traded in line with risk assets, particularly technology equities. During periods of rising interest rates and tightening liquidity, crypto markets have tended to fall alongside other speculative assets rather than act as a counterbalance which in turn prompts the question whether crypto is truly a new asset class or simply another expression of global liquidity cycles.

Around the world, policymakers are still grappling with how to treat crypto , be that as a currency, a commodity, a security, or something entirely new. This uncertainty creates ongoing risk for investors. Regulatory interventions can materially alter market dynamics overnight, from restrictions on exchanges to changes in taxation or outright bans. For an asset class that prides itself on decentralisation, its dependence on centralised infrastructure like exchanges introduces points of failure that regulators can and do influence – including its perception as being energy-intensive which attracts scrutiny from governments and investors alike. 

There are also structural risks embedded within the ecosystem itself. The collapse of high-profile exchanges and projects in recent years has highlighted issues around governance, transparency, and counterparty risk. In many cases, investors have discovered that the protections they take for granted in traditional finance—segregation of assets, capital requirements, and clear legal recourse—are either absent or inconsistently applied in crypto markets. The result is a landscape where operational risk can be just as significant as market risk.

None of this is should imply that crypto lacks value or future potential. The underlying technologies of distributed ledgers, programmable assets, and decentralised finance are already influencing how financial systems evolve. But there is a difference between recognising potential and assuming inevitability.

History is littered with asset classes and innovations that were once considered unstoppable. The lesson is not that they failed entirely, but that their paths were far more volatile, contested, and uncertain than early narratives suggested. Crypto is likely to follow a similar trajectory. It may well become a meaningful part of the global financial system, but it will do so through cycles of correction, regulation, and reinvention, not through invincibility.

For investors, the implication is clear. Crypto should be approached with the same discipline applied to any other asset class and measured accordingly. 

11th April 2026