Economist and macro trader Alex Krüger has argued that “crypto” has largely failed as an asset class, even as blockchain-based adoption accelerates across stablecoins, tokenization, predictive markets, perpetrators of crime, artificial intelligence, and privacy-focused assets.

In post on X Krüger made a clear distinction between the speculative cryptocurrency market of recent cycles and parts of the industry that he believes continue to show significant driving force. His central claim was blunt: most crypto tokens have failed to produce lasting value for holders, while founders and insiders have repeatedly exploited the sector’s tender barriers to extract liquidity from retail investors.

“At this point, I largely think of ‘crypto’ as a failed asset class,” Krüger wrote. “I have written about the reasons many times. Mainly, most crypto assets are worthless or have terrible appreciation, and most of the founders took advantage of the lack of guardrails and indiscriminately jumped on people, or are just plain scammers.”

Krüger said that the damage was deepened by the so-called “Memecoins SuperBullshitCycle”, describing it as a speculative trend that “brings out the worst in people” and deprives market participants of both capital and morale. He also pointed to the “never-ending wave of DeFi hacks,” which he said has skyrocketed since April last year, which is another factor affecting the credibility of cryptocurrencies as an investable asset class.

Krüger sees adoption increasing, but not in “old crypto”

The economist admitted that his assessment may seem contradictory, considering that several blockchain-related sectors are still developing dynamically. He cited the growing popularity of stablecoins, politicians openly supporting cryptocurrencies in the United States, TradFi’s push to tokenize assets, the growing utilize of stocks and commodities on offshore and DeFi platforms, the early development of US perps markets, and the growing presence of forecast markets in daily information flows.

However, Krüger described many of these trends as “more ‘blockchain’ than ‘crypto,'” suggesting that the infrastructure and application layer may be growing while the legacy token market remains structurally tender. The key exception, he says, is when tokens have clearer links to revenue, user demand or capital return mechanisms.

“A few of these exceptions even pass on most of the revenue to holders through redemptions,” he wrote, naming Hyperliquid in particular. “This is what every investor wants when they want to invest in a good business, not in a fleeting narrative.”

This distinction lies at the heart of Krüger’s argument. He is not saying that blockchain-based markets are dead. Rather, it says that broad, narrative-driven exposure to cryptocurrencies has failed to deliver the kind of value growth that investors were promised, while a narrower set of sectors have come to resemble operating businesses or infrastructure plays.

Privacy and AI stand out

Krüger identified privacy as one of the few “old school” cryptocurrency categories that remains relevant. He argued that demand for private, non-depository valuables is real, even if some of that demand comes from illicit flows. He referred to the U.S. Department of Justice’s seizure of $15 billion in Bitcoin from Cambodia-linked pig slaughter operations, saying the legal request was filed on October 8, 2025.

“Of course, everyone needs privacy, not just criminals, but the flow of crime is real and large,” Krüger wrote. “The stock attracting the most flows in this niche is Zcash. Zcash’s recent performance is fascinating as it is trending higher while bitcoin is trending down, a sign of true reallocation among bitcoiners.”

The second category that Krüger claims is not dead is artificial intelligence. Still, his view of the sector was selective. He described most AI tokens as “high-flying, essentially narrative-less tokens,” while citing Venice as a standout because he sees it as associated with a private AI platform with growing users and revenues.

This leaves Krüger with a more intricate conclusion than the headline itself suggests. He believes the legacy token market is broken, but not the broader direction of infrastructure supporting cryptocurrencies. Stablecoins, tokenized assets, prediction markets, perpetrators, artificial intelligence and privacy could create the next investable sector narrative, provided the tokens attached to them are able to show actual value capture rather than processed speculation.

“So you could say that old ‘crypto’ is a failed asset class,” Krüger wrote, “but new beginnings are rising from the ashes, and the new face of cryptocurrencies is heavily dominated by the needs of Tradfi, prediction markets, artificial intelligence and privacy.”
His last sentence captured the contradiction he sees in the market: “Crypto sucks. Long live crypto.”

At press time, the total market capitalization of cryptocurrencies was $2.28 trillion.

Featured image created with DALL.E, chart from TradingView.com