© Art by Fortune Cryptocurrency narratives can often obscure cryptographic facts.The cryptocurrency industry is more volatile than most, so it's no surprise that many see it through an all-or-nothing narrative. Depending on your point of view, cryptocurrencies are either going to take over the world or they will appear as a fraudulent fad and be wiped out once and for all. At the moment, the latter position is all the rage in the face of continued price declines and aggressive anti-crypto moves by regulators.
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That's not to say that doomsday is as exaggerated as the bullish case, something that came back to me after a recent conversation with two longtime crypto investors. Stephen Ouellette, founder of Toronto-based investment firm FRNT Financial, told me that today's regulatory environment may be hostile, but it's still infinitely better than the early days of cryptocurrency, when companies couldn't even get an account.
Ouellette said he was not surprised by the decline of big names like Celsius and FTX, and said his firm had always viewed their business models as suspect or illegitimate and avoided them in favor of long-term strategies. These strategies include a focus on institutional transactions and offering trading tools that are popular with large traditional investors. He added that he sees no reason to reveal the regulators or the inertia with which they operate.
"I worked for two years to get a derivative license. How long it takes - it's financing," Ouellette said, adding that his company doesn't touch DeFi because its profit is based on pumping tokens and he doesn't see why it does business. May not be satisfied with offering 15 trusted tokens instead of hundreds. of ideas
Ouellet added that the current environment for US cryptocurrencies is negative but cautioned against a narrow view. He noted that many state lawmakers, especially those led by Republicans, have a more positive view of cryptocurrency, and it's a mistake to see its future as a reaction to the current Securities and Exchange Commission chairman's agenda. "There's no need to blow up eight years of construction because an American regulator is chasing space."
I heard similar sentiments from David Pakman, an Apple industry and venture capital veteran who is now a managing partner at cryptocurrency-focused Coin Fund. He told me that the US regulatory environment strongly discourages, but has nothing to gain from engaging in public litigation with federal agencies. Pakman added that we would be concerned about the cryptocurrency sector, but despite US regulators trying to suppress it, the industry is growing in places like Europe, Dubai, Singapore and Hong Kong. The world, in other words.
The bottom line is that when assessing the state of cryptocurrencies, it's important to be wary of details that are often ephemeral and can cloud the bigger picture.
Jeff John Roberts
jeff.roberts@fortune.com
@JeffJohnRoberts
This story originally appeared on Fortune.com
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