Economist and macro trader Alex Krueger has argued that “crypto” has largely failed as an asset class, even as blockchain-based adoption accelerates across stablecoins, tokenization, prediction markets, software, artificial intelligence, and privacy-focused assets.
In a mail In His central claim was straightforward: most cryptocurrencies have failed to produce lasting value for their holders, while founders and insiders have repeatedly used the sector’s weak guardrails to extract liquidity from retail investors.
“I largely believe that ‘crypto’ is a failed asset class at this point,” Krueger wrote. “I’ve written about the reasons several times. Mainly, most crypto assets are worthless, or have terrible cumulative value, and most founders have abused the lack of guardrails and dumped people randomly, or are outright scammers.”
Krueger said the damage was exacerbated by what he called the “Memecoins SuperBullshitCycle,” describing it as a speculative trend that “brought out the worst in people” and drained capital and morale from market participants. He also referred to “endlessness.” A wave of DeFi hacks“, which he said has increased sharply since last April, as another factor affecting the credibility of cryptocurrencies as an investable asset class.
Kroger Expects Adoption Rate to Rise, But Not in ‘Legacy Cryptocurrencies’
The economist admitted that his assessment may seem contradictory, given that many blockchain-related sectors are still expanding rapidly. He cited the growing adoption of stablecoins, publicly pro-crypto politicians in the US, TradFi’s push to tokenize assets, increased use of offshore stocks and commodities and decentralized finance, the early development of US Perps markets, and the growing presence of prediction markets in daily information flows.
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But Krueger framed many of these trends as “blockchain” rather than “crypto,” suggesting that the infrastructure and application layer may be advancing while the legacy token market remains structurally weak. In his view, the main exception is when tokens have more obvious links to revenue, user demand or capital return mechanisms.
“Some of these exceptions distribute most of the revenue to their owners through buybacks,” he wrote. Excess fluid in particular. “This is what every investor actually wants to see in order to invest in a good business rather than a fleeting narrative.”
This distinction lies at the heart of Krueger’s argument. He’s not saying that blockchain-based markets are dead. Instead, he argues that broad, narrative-based exposure to crypto has failed to deliver the kind of value accretion promised to investors, while a narrower set of sectors has begun to resemble operating companies or infrastructure plays.
Privacy and artificial intelligence stand out
Krueger identified privacy as one of the few “old school” crypto categories that is still relevant. He said the demand for non-custodial private stores of value is real, even if part of that demand comes from illicit flows. He pointed out that the US Department of Justice confiscated $15 billion in Bitcoin Pig slaughter operations linked to CambodiaSaying that the legal submission was made on October 8, 2025.
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“Of course, everyone needs privacy, not just criminals, but crime flows are real and significant,” Krueger wrote. “The asset that attracts the most flows in this space is Zcash. Zcash’s recent performance “It was great, as it was trending up as Bitcoin was trending down, a sign of real reallocation among Bitcoin users.”
Another category that Krueger said is not dead is artificial intelligence. However, his view of the sector was selective. He described most AI tokens as “high-flying tokens that fundamentally lack narrative,” while calling Venice a standout token because he sees it tied to a private AI platform with growing users and revenue.
This leaves Krueger with a more nuanced conclusion than the main claim alone suggests. He sees the legacy token market as broken, but not the broader trend of infrastructure supporting cryptocurrencies. Stablecoins, token assets, prediction markets, criminals, AI and privacy may form the next investable narrative in the sector, provided the tokens associated with them demonstrate actual value capture rather than recycled speculation.
“So one could say that legacy cryptocurrencies are a failed asset class, but from the ashes come new beginnings, and the new face of crypto is one strongly dominated by the needs of Tradfi, prediction markets, AI, and privacy,” Krueger wrote.
His closing statement captured the contradiction he sees in the market: “Cryptocurrencies are bad. Long live cryptocurrencies.”
At press time, the total market cap of cryptocurrencies was $2.28 trillion.
Featured image created with DALL.E, a chart from TradingView.com
