Multicoin founder: The technocratic crypto faction will dominate the market in the future, and Bitcoin will be reversed
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Multicoin founder: The technocratic crypto faction will dominate the market in the future, and Bitcoin will be reversed
In the struggle of 2017–2018, most of it was about money camps chasing power and relevance. Today, it is clear that tech crypto dominates the era.
Navigating Web3 tides with focused insightsAuthor: Kyle Samani, Founder of Multicoin
Translation: TechFlow
Why the next bear market won’t be like the last one?
In fact, we might not have a bear market at all—or we might only have a half one. How you define the market state depends on your perspective.
Broadly speaking, there are two camps in crypto: monetary crypto and technical crypto.
From 2011 to 2017, the zeitgeist of the space was dominated by monetary crypto enthusiasts. Since 2017, technical crypto has become mainstream.
The struggle during 2017–2018 was largely about the monetary camp fighting for power and relevance. Today, it’s clear that technical crypto dominates the era.
There are still many who view BTC purely as an inflation hedge, but their presence in media, social platforms, conference talks, etc., is shrinking.
Monetary crypto people focus on interest rates, central bank policies, etc., while technical people care about building projects.
As an inflation hedge, politicians and central banks will inevitably do things that hurt BTC—whether banning (or attempting to ban) it, raising interest rates, or taking other actions. Institutions will react accordingly, and the BTC-USD price will naturally respond.
Technical builders generally don’t care about these shifts—they just want to build innovative projects. If the BTC-USD price drops 50% due to government action, there’s no real reason for that to affect what people are building or how stage investors allocate capital into technical crypto.
Clearly, market prices are driven by investor sentiment, but directionally speaking, from the vantage point of the 2018 SaaS bear market—did SaaS builders slow down? Did VC investing slow down?
Crypto may still be too early to go fully mainstream, but I don’t think that matters anymore.
The train has already left the station: all technical builders and investors believe that technical crypto has the potential to reshape business, finance, and entire social structures—and they’re willing to engage with this idea for years to come.
There is massive capital that will never believe in BTC because they don’t believe in non-productive assets—but there is not a single investor in the world who doesn’t believe that software will eat the world.
Over the next roughly five years, every major capital pool around the world will buy crypto. 100% of them will invest in technical crypto, but not all of them will invest in monetary crypto.
That’s why I expect SOL and ETH to vastly outperform BTC in the next “bear market.” Technical capital doesn’t care about macro. They just want to build what they believe will change the world.
Only a small fraction of global capital is non-productive—fiat money is about $100T, gold around $10T—while public and private equity, debt, and real estate are collectively at least 100x larger.
The world doesn’t actually care much about non-productive assets. It wants productive ones. When they understand crypto, they’ll buy far more of the productive products than the non-productive ones.
One could argue that SOL and ETH aren’t productive—they’re clearly different from stocks, bonds, and real estate.
But I believe that everyone understands the reality that software is eating the world, which will lead them to buy SOL and ETH—even if they aren’t strictly productive in the same way as equities, debt, or real estate.
We can’t ignore that societal transformation is massive. Everyone wants to be long on the next big tech wave, and crypto is undoubtedly one of them.
Yes, I do expect BTC to be flipped in the medium term, as waves of tech capital enter the space and displace macro-driven capital.
Once BTC gets flipped, its game is mostly over. A large part of BTC’s value proposition is that it’s the largest and most liquid. Once that’s no longer true, it offers much less.
When people realize this is becoming real, massive capital currently in BTC will flow out and into SOL, ETH, and other more productive tokens.
Summary
1) The next bear market won’t be like the last one
2) Technical crypto is more likely to experience a shorter 2018-style SaaS bear market (e.g., May–June 2021)
3) Decoupling is real
4) Things get very interesting when BTC gets flipped.
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