If you’ve been in crypto long enough to witness the Alt-coin explosions, the NFT and memecoin crazes, and multiple bull and bear cycles (and still in the game like me), you’re either a bit crazy or genuinely convinced that this thing will revolutionize the world.
We’ve seen wild highs and brutal crashes. Bitcoin surged around 800 thousand percent since January 1, 2013, even though around 75 percent of Bitcoin investors lost money between 2015 and 2022, according to a study by the Bank of International Settlements.
And while the market expanded by over 100,000 percent over the last 10 years, thousands, if not millions, of cryptocurrencies have become “dead coins” since 2017, abandoned, exposed as scams, or simply failed.
Sure, we can discuss crypto’s volatility, but this data both validates its massive potential and exposes a serious flaw in the way people approach crypto investing. If we’re to build the future of finance, we can’t keep treating crypto like a poker table.
Yes, the thrill is real. The opportunity is real. But the risk is concentrated, and too often ignored.
The real risk of crypto is its structure
For over a decade, the all-in mindset has dominated how users engage with crypto, and if you look at a few isolated cases of “Bitcoin millionaires,” it’s understandable. However, this mindset has led to the industry’s notorious reliance on hype, grandiose initiatives, and flashy marketing campaigns to sustain the ecosystem. This has specifically impacted retail investors, many of whom don’t fully understand the ever-evolving nuances of crypto and decentralized finance.
As the industry progresses, there’s a growing emphasis on risk mitigation, but old habits die hard. Projects still push tokens without offering basic investor protections, and many also intentionally avoid transparency-enhancing mechanisms such as third-party audits. Major corporations can avoid full transparency, but crypto projects no longer have this luxury because it defies the very nature of blockchain and decentralization.
Transparency in crypto isn’t solely about trust, it’s about survival. In this permissionless environment, withholding details is a conscious decision that typically signals there’s something worth hiding.
And when a project’s token crashes, or worse, the entire market plunges, the ones left holding the bag are usually the ones with the least experience: retail investors sucked up in the hype. This isn’t the result of simple bad luck or a project failing to meet its expectations. It’s a structural problem centered around a lack of education, diversification, and real mechanisms to safeguard investors.
To be fair, the industry has made progress with KYC, smarter wallets, and even AI-based fraud detection. And while the industry is more open to implementing regulatory standards, we’re still miles away from offering the same safety nets that traditional markets take for granted.
Projects can rise fast, but if users can’t rely on strong frameworks—compliance, security, and smart investing—they’ll walk away. Therefore, it’s paramount to build tools and structures that align with long-term trust, not just the short-term gains.
Regulations aren’t the enemy
There are still many “purists” in the industry who oppose any regulatory action whatsoever, opting for more of the same anarchy that we’ve seen plague the industry over the last several years. These motivations may come from a total belief in the power of crypto and DeFi, but are out of touch with most users, and reality.
It’s time to acknowledge that regulation and decentralization can coexist, and this isn’t a compromise because there have always been varying degrees of centralization in everything crypto, except for, perhaps, Bitcoin. KYC, AML, regular audits, and other monitoring and transparency protocols won’t kill innovation, instead, they’ll make it investable.
And while these compliance measures slowly become more prominent, what’s missing is a robust suite of investment products that mirror the kind of structured, diversified options available in traditional finance. Index-style strategies that track entire market segments such as DeFi, AI, or real-world assets afford investors opportunities to gain exposure to promising projects and sectors without relying on biased social media influencers.
This type of thematic exposure reduces individualistic risk and makes the market accessible to individuals who prefer a more balanced, long-term approach. This benefits the individual, of course, but it can also make the industry more palatable for a more diverse class of investors.
At the same time, yield generation mechanisms need to move on from the basic liquidity mining and unsustainable APR (annual percentage yield) gimmicks that have been prevalent in DeFi over the past few years. Smart yield products, those that actively allocate capital across lending platforms, staking opportunities, and protocol-native yield sources, can help mitigate risk while maximizing returns. A true win-win scenario.
Layering this with real diversification across crypto’s growing number of sectors creates a more resilient portfolio. If the industry wants an infusion of serious capital—meaning institutional—it needs to offer the tools that are built for capital preservation and long-term growth instead of speculation.
The next wave of crypto adoption won’t be reeled in via hype. The house of crypto doesn’t need to be a casino. Let’s build it like a bank, but better.