This article is from: Vanity Fair

Translation by: Moni, Odaily Planet Daily

“I really can’t take it anymore.”

In the first few days of February this year, a large cryptocurrency market maker's Signal inbox was flooded with dozens of messages like this. The crypto market plummeted again by 15%—in just a few days, a market cap of $400 billion evaporated. In the previous four months, dragged down by Bitcoin, the total market cap of cryptocurrencies had plunged nearly 50%, with Ethereum and Solana both approaching a 60% drop. This crash wiped out about $2 trillion in value, dragging the industry into a bear market, which the crypto community referred to as “crypto winter”—a somewhat nerdy metaphor that pays homage to the unsettling line from Game of Thrones: “Winter is coming.”

Project founders were in a panic: some urgently tried to privatize, some hurriedly initiated emergency equity financing, and others simply abandoned ship. To be honest, veterans of the crypto industry have experienced even more severe drops—markets once fell by 80% or even 90%, but this time, the chill was particularly different.

Coinbase CEO Brian Armstrong was grappling with regulators in Washington while watching his personal net worth evaporate by about $10 billion. Internal conflicts in Ethereum simmered, with co-founder Vitalik Buterin tweeting multiple times about concerns regarding the platform's scaling methods; as an early supporter of Polymarket, he expressed distaste for the direction of blockchain prediction markets becoming overly addictive. Ordinary traders were derided by industry veterans as “tourists,” either panic selling or turning to more fashionable trends like artificial intelligence and prediction markets.

Technology without faith and spiritual support is nothing; what we have built is a religious movement

“They are all cowards.”

Early crypto investor and current founder of Crucible Capital, Meltem Demirors, commented on her panicking peers. Decked out with layered diamond crosses and dressed in a black tracksuit, with her company's slogan—“Hold the faith”—emblazoned on her hips.

In this crypto winter, she began to buy back Bitcoin.

On a February afternoon, as the market continued to decline, a small group of true believers gathered inside a quirky art landmark building in Manhattan's Lower East Side—once known as the “Temple of Capitalism” bank, now transformed into the $300 million Nine Orchard hotel, with Galaxy Digital CEO Michael Novogratz as its new co-owner.

After collectively losing billions in paper wealth, Michael Novogratz, Meltem Demirors, Olaf Carlson-Wee, “Woodstock of Wall Street” Cathie Wood, Danny Ryan, and other core figures in the crypto community gathered to share insights—not discussing what they were selling, but what they were buying.

Cathie Wood held a wealth of exclusive research data, while Olaf Carlson-Wee insisted he never followed the news; both continued to increase their Bitcoin positions. Danny Ryan remained unconcerned about daily fluctuations: “I’m a Luddite,” he declared, “whatever I need to know, someone will tell me.”

“Technology without faith,” Meltem Demirors emphasized again, “technology without a spiritual core is worthless.” Unlike the doubting disciples of Jesus’ resurrection, dedicated believers in crypto remained unwavering. “Honestly, what we’re building is a religious movement.”

Gold, commodities, real estate, bonds, stocks—all asset classes answer the same question: where does value come from? In fact, they are products of social consensus, only having meaning because of collective recognition.

Gold: value comes from nature and scarcity; bonds: come from institutional trust; real estate: comes from land and permanence; commodities: come from the material itself; stocks: come from human creativity.

Every type of asset needs a creation myth, from scarcity to capitalism itself. And in the eyes of those who firmly believe that cryptocurrency is “the sixth asset class,” its value extends beyond the financial realm. “I have been waiting for this day since the dollar decoupled from gold in 1971,” Cathie Wood recalled, citing economic authority of the Reagan era Arthur Laffer, who presented the Laffer curve, as having said to her. Cathie Wood's actively managed ETF is heavily invested in disruptive technology; she asked Arthur Laffer, “How big can this idea get?” His answer revealed the ultimate fantasy of early crypto believers: “How large do you think the monetary base of the United States is?”

On Halloween 2008, six weeks after Lehman Brothers—the fourth largest investment bank in the U.S.—collapsed, the myth of institutional safety completely shattered. A mysterious figure, using the pseudonym Satoshi Nakamoto, quietly sent a 9-page PDF titled “Bitcoin: A Peer-to-Peer Electronic Cash System” to a handful of cryptographers. This “white paper” outlined a new financial system entirely bypassing banks, governments, Federal Reserve, and other central authorities, allowing ordinary people to escape inflation, asset freezes, and the capriciousness of monetary policy. Bitcoin achieved self-security through “mining”—computers specifically competing to crack cryptographic puzzles—while accessing assets relied on a string of unique mnemonic phrases: lose the mnemonic, and funds disappear forever; know it by heart, and wealth can be reclaimed anywhere in the world without permission.

In 2009, Satoshi Nakamoto turned Bitcoin from theory into reality by mining the genesis block. After the rules were established, the security mechanisms were put in place, and Bitcoin began to circulate (then still worth nothing), he disappeared completely. This retreat not only deepened the mythological aura of Bitcoin, but also gave it true decentralization: there would no longer be an omnipotent controller; this experiment belonged to everyone and to no one.

“I fell in love with Bitcoin at first sight.” Erik Voorhees, founder of ShapeShift exchange and Venice AI, said. In 2011, he discovered Bitcoin during his senior year at Vassar College, while participating in a libertarian Free State project in New Hampshire: “I thought Bitcoin could conquer the world; it couldn’t be devalued, no individual or institution could control it, and no one could stop it.”

This movement took root on society's fringes, attracting followers who were a rebellious bunch from the post-financial crisis era: disillusioned with reality, yearning for social and political reform. Early believers were mostly young, male, and deeply addicted to the internet, forming their own information cocoons on forums, firmly believing that cryptography could achieve what regulators never could: redistribute power—dressed in a new Valentino red suit, Michael Novogratz described Bitcoin: “It’s like the rebels in Star Wars.”

From “Fringe Rebels” to Mainstream Power

The founder of crypto hedge fund Polychain Capital, Carlson-Wee, stated: “Once you truly understand Bitcoin,” you can never turn a blind eye to it. In 2011, as a senior at Vassar College, he first encountered Bitcoin on online forums, quickly becoming convinced that cryptocurrency was the future of global finance, even persuading his thesis advisor to let him write his thesis on it. After graduation, Carlson-Wee worked as a lumberjack in Washington State, sending cold emails with his resume and thesis to Coinbase, a startup still operating out of an apartment in San Francisco at the time, and was hired within days, becoming the company's first employee. “In those early days, it seemed like everyone was guarding a secret that the whole world didn’t yet know.”

When the Occupy Wall Street movement sounded the alarm bells for growing wealth inequality in America, the financial autonomy and global inclusive finance concepts advocated by cryptocurrencies also resonated with a generation—they witnessed the evaporation of trillions of dollars in household wealth while the government stepped in to bail out banks. “The first day I stepped onto the trading floor was the day after Lehman Brothers collapsed,” Arthur Hayes recalled. At that time, he was stranded on a remote island in Japan, snowed in, sporting an unshaven beard and wearing a red thermal T-shirt. “Starting a financial career this way was pretty special.”

Arthur Hayes was once deeply rooted in traditional finance: Wharton School of the University of Pennsylvania, Deutsche Bank, Citigroup. But witnessing colleagues being laid off during the market crash made him pivot towards assets he could control—first gold, then Bitcoin in 2013. In 2014, he was unemployed, couch-surfing at a friend's place.

At 28, Arthur Hayes co-founded BitMEX, bringing Wall Street-level leverage and derivatives into crypto trading, ultimately creating the “perpetual contracts.” Traders didn't need to hold Bitcoin, only to bet on its price fluctuations with leverage of 5x, 50x, or even 100x. “Some lost their fortunes, some became rich overnight,” Arthur Hayes said flatly, noting that the fates of early believers were often sealed in minutes.

The creation of the “perpetual contract” product exploded in the market, generating trillions of dollars in scale, and birthed a new generation of “crypto gamblers”—willing to take massive risks for the chance to gain millions in wealth.

Thus, cryptocurrency became a casino.

No one is in control; who decides the future? This is the crux of crypto and its fatal flaw. From ethical use cases to whether the Bitcoin ecosystem should expand into new tokens, divisions abound. But it was this motley crew of alliances—libertarians, venture capitalists, builders, traders, and scammers—that ultimately pushed cryptocurrencies into the mainstream.

In the same year that Arthur Hayes made Bitcoin feel more like gambling than gold, 20-year-old Vitalik Buterin—slender, a Thiel Fellow, and looking like he should be walking in a Balenciaga show during the Demna era—completely disrupted the industry.

One day in 2014, Joseph Lubin took Michael Novogratz to Brooklyn to meet members of the Ethereum Foundation— the next year, the Ethereum platform officially launched. Through “smart contracts”—automated executable code running on the blockchain—Ethereum allowed developers to build a complete financial system: lending platforms, digital art markets, and autonomous organizations. No banks, no corporate overlords, only code.

“Joseph Lubin went through what was almost a religious conversion,” Michael Novogratz said, “Ethereum will change the world, save the world.” The entire economic system would migrate on-chain, stablecoins would support weak third world currencies, and open finance would replace the opacity of traditional banks. “I was already rich and didn't need the world saved, but I thought what Ethereum was doing was interesting.”

“I never had an epiphany about Bitcoin,” Danny Ryan, co-founder and president of Etherealize, said. In New York, with the temperature below zero, his long hair braided, dressed in a thin black T-shirt and denim jacket, with a plastic yellow nose ring he claimed helped with breathing. Danny Ryan’s awakening moment came in 2016 when he discovered Ethereum; by January 2017, he had fully committed to Vitalik Buterin's foundation and was quickly hired—just as cryptocurrencies were exploding into the mainstream.

“It was a crazy golden age,” Meltem Demirors recalled.

At a meeting in November 2017, she watched Ethereum “geeks” in unicorn T-shirts and Hawaiian shirts help investors from Goldman Sachs and a16z set up MetaMask wallets and participate in initial coin offerings.

Subsequently, Bitcoin broke through $10,000, and the total market cap of cryptocurrencies skyrocketed from $16 billion to a peak of $535 billion, with an annual growth rate exceeding 3,200%.

The emergence of Ethereum made the crypto world no longer limited to a single token, a creation myth, or a singular ideology. Anyone could build anything, breaking singularity and tearing apart cohesion. The U.S. government has always been at a loss regarding this industry, with its aversion to centralization; in the eyes of regulators, cryptocurrency is just a murky network scam.

In the following decade, the market swung repeatedly between frenzy and collapse, leading to countless individuals losing their life savings, while a select few who accurately timed the market created generational wealth. Meanwhile, inside the crypto ecosystem, fissures widened: veterans vs tourists, idealists vs scammers, builders vs traders.

Two Types of People in the Crypto Community: Believers and Fraudsters

The crypto community consists of two types of people—

The first type is believers: those who philosophically agree with Bitcoin's original concepts, who care about decentralization, privacy, and personal sovereignty. They are often vilified simply because their principles contradict many modern institutions (especially governments and their allied banks).

The second type is fraudsters: those who sell meme coins in Lamborghinis, lacking principles, most of whom entered the scene after 2017. Ranging from outright scammers to mildly speculative, to ignorant fools.

A crypto holder using the pseudonym “Moose” pulled out a Palauan ID—this was a document he had purchased online for $200, signifying his access to an offshore derivatives platform that users in the U.S. could not access. “Everyone does it,” he said. At 27, he, like many men his age, first encountered cryptocurrency in the mid-2010s while buying drugs and fake IDs on the Silk Road website; his idols were not athletes or film stars, but anonymous Twitter accounts—anime avatars and obscure bios, with fans ardently tracking their trading moves.

Jordan Fish, at another layer within the same circle, uses the handle “Cobie,” his Telegram avatar being a leaping white puppy. He profited early from the Ethereum staking protocol Lido and later founded a members-only crypto investment platform called Echo, valued over $300 million. “In 2019, being a cryptobro was pretty cool, but now, it's not cool at all.”

As crypto moved from the fringe to mainstream, and then became a cultural laughingstock, its promise of disruptive innovation gradually faded. Those who once prided themselves on rebellion increasingly resembled other deeply addicted youth: gaming, meme-making, trading—this poor image was exacerbated.

In 2023, Arthur Hayes attracted thousands at the TOKEN2049 party in Singapore, exhausting their liquor supply within the first hour, and ultimately, security had to fend off drunken attendees desperate to enter, some even threatening to jump walls. Two years later at the same conference in Dubai, Carlson-Wee traveled back and forth between California and the UAE (reportedly collaborating on projects with the local government), partying on the Lotus Super Yacht alongside Jordan Jefferson, the CEO of DogeOS, who donned a shirt featuring a Shiba Inu dressed in a UAE traditional headdress. (An Emirati-affiliated company had previously invested $500 million in a crypto project by his family before Trump’s inauguration.)

“Everyone thinks that if you make money in crypto, you’ll be on a yacht in Miami surrounded by a hundred prostitutes. I spent three days at La Guérite during the Cannes Ethereum conference,” Meltem Demirors said, “I got so drunk, I crawled across the table. Ethereum believers hate nice things, hate pleasure, they just want you to eat tofu and wear organic cotton, self-torturing.”

There is Another Creature in the Crypto Circle: the “Whales”

Whales are colossal entities in the world of Bitcoin.

In crypto vernacular, whales refer to those holding over 1,000 bitcoins, often possessing digital assets valued over $10 billion, capable of shaking the market with a single transaction. These whales remain entirely anonymous, never attending meetings or hosting parties, or posting controversial tweets: the loudest voices in the crypto sphere are never the richest.

Anonymity, once an ideological stance against centralization, has now become a necessity for survival. Making oneself known in the crypto sphere is akin to inviting trouble. The industry experiences dozens of violent incidents each year: kidnappings, home invasions, armed robberies. Large-scale data breaches expose asset holdings, turning digital wealth into real-world attack targets. Last year, a crypto holder in Nolita claimed he was kidnapped and tortured for two weeks, after which he managed to escape.

“I no longer want to be a public figure,” Fish said, because “it can likely lead to personal danger.” Devin Finzer, co-founder of OpenSea, was accompanied by a tall, rugged bodyguard resembling a Viking rather than a Secret Service agent while out with his wife Yu-Chi Lyra Kuo. “That’s our bodyguard.”

There is an unwritten rule in the crypto sphere for long-term survival, and the secret is: never become the main character. I am a supporting role; everyone knows me, but no one truly knows why I exist.

On the morning when Vanity Fair was photographing a gathering, Cathie Wood didn’t recognize Meltem Demirors, whom she hadn’t seen in ten years. “You look younger,” Cathie Wood said, embracing her. “Because I have money now,” Meltem Demirors replied with a wry smile. Carlson-Wee introduced himself to Cathie Wood like a little boy meeting an idol, and they immediately began to reminisce about the years when they were all seen as crazy for believing in the market downturn; together they firmly held the belief of “buying the dip”—gently avoiding the reality that cryptocurrencies had plunged nearly 50% within three months.

Michael Novogratz strode in wearing a silver long down jacket, greeting everyone warmly, and then complained he was suffering from a severe hangover on the second day—describing the night of revelry that peaked at 4 AM at a New York nightclub inspired by Burning Man, he prayed that his nearby 30-year-old daughter and her newlywed husband hadn’t seen it.

Ryan stayed in a corner of the room, watching with a mixture of amusement and horror. Meltem Demirors and her assistant browsed through the clothes they had brought. Michael Novogratz mulled over a diamond-studded black suit and a Valentino outfit, while Ryan had only brought two pairs of pants, one of which had a hole in the crotch, yet he still wore it. “It’s too hot,” he complained, barefoot as his hairstylist dried his thick hair which fell to his shoulders.

“Where’s Devin Finzer?” Meltem Demirors asked.

Devin Finzer and his wife Yu-Chi Lyra Kuo were in a private suite on the fourth floor, with a dedicated assistant, security, and a celebrity stylist, surrounded by custom high-end clothing.

Ultimately, after considering millions of dollars' worth of haute couture, Yu-Chi Lyra Kuo chose a non-haute couture Armani dress and didn’t wear any JAR jewelry.

In 2017, Devin Finzer founded the NFT marketplace OpenSea—by the eyes of crypto veterans and even his wife, he missed the key threshold to become an OG. His background was the dream of a Silicon Valley mother: growing up in the suburbs of San Francisco, graduating from Brown University with a major in computer science and math, previously a software engineer at Pinterest.

When the crypto market exploded, Devin Finzer and his friend Alex Atallah decided to build a digital asset version of eBay. Inspired by the tokenization of Ethereum, especially the hype surrounding the digital cat trading platform CryptoKitties, OpenSea was born.

Not long after, the COVID-19 pandemic hit. Bored young people flocked into the crypto universe, and NFTs soared.

In 2021, Beeple's NFT artwork sold for $69 million at Christie's; collections like Bored Ape Yacht Club and CryptoPunks became status symbols on par with Rolex and Porsche, with some even spending over a million dollars on a stone-cut collage.

In January 2022, OpenSea's valuation soared to $13 billion. That same year, young Devin Finzer was exhausted from rapidly expanding the company, suddenly finding himself in the upper echelons of Silicon Valley social circles, where he met Yu-Chi Lyra Kuo.

“Yu-Chi Lyra Kuo is like a Ferrari engine in a hot girl's body,” Devin Finzer said.

Yu-Chi Lyra Kuo stated that as early as 2022, before the crypto crash and the bursting of the NFT bubble, she had expressed her concerns about OpenSea to Devin Finzer, but no one listened. She believed OpenSea was too trend-following and that Devin Finzer was immature and shortsighted, failing to shift towards a more sustainable direction in time.

“Everyone was fawning over Devin Finzer; Forbes cover, 29 years old, handsome, everyone wanted to send him a private jet to the Super Bowl and to attend every dinner party.” Yu-Chi Lyra Kuo paused, “I’m not interested in any of that.”

“It has been a humbling journey,” Devin Finzer softly added, “even if everyone lifts you up to the skies, you still have so much to learn.”

The market collapse had long been brewing—

In 2021, Bitcoin fell from its peak of $69,000 to $16,000, initiating the harshest winter in the industry. OpenSea's valuation plummeted by about 90%.

In May 2022, the Terra/Luna collapse wiped out over $40 billion in value from the ecosystem within 72 hours, leaving retail investors empty-handed. One of the largest crypto hedge funds, Three Arrows Capital, subsequently collapsed.

In November 2022, the industry's darling SBF’s exchange FTX collapsed dramatically, disappearing in a week; he was ultimately arrested and sentenced for seven counts of fraud and conspiracy, stealing customer funds of up to $10 billion.

“Devin Finzer is not the first genius kid I've mentored,” Yu-Chi Lyra Kuo did not elaborate. As the company collapsed and the NFT bubble burst, Yu-Chi Lyra Kuo became Devin Finzer’s “product mom,” treating Devin Finzer like a “custom teddy bear.” Now, they claim to be relaunching OpenSea with a grander vision.

However, not everyone possesses the conviction of Devin Finzer and Yu-Chi Lyra Kuo.

As blockchain infrastructure matures, it becomes increasingly hard to explain the functionalities OpenSea offers that platforms like Coinbase and Gemini do not. Successful projects have raised barriers to entry—such as Hyperliquid and Uniswap now sharing profits with token holders. Most tokens cannot compete with this, as issuance is mainly for governance, with holders only able to vote on protocol decisions and holding no direct economic rights.

The collapse of FTX not only plunged the entire industry into an abyss but also triggered what the crypto community dubs the “witch hunt”: regulators coordinating efforts to try and strangle a technology they neither understand nor can control. Regulators see the crypto world as the Wild West; even if the rules are imperfect, protecting U.S. investors is a good starting point.

President Biden appointed Gary Gensler to lead the U.S. Securities and Exchange Commission—this former Goldman Sachs partner and blockchain professor at MIT understands cryptocurrency better than any other regulator. Gary Gensler's aim is to tame this industry, with the core question being: is cryptocurrency a security or a commodity? The answer determines everything: securities are under the purview of the SEC, and exchanges and token issuers must register, disclose, and comply with investor protection rules designed for stocks—rules intended for centralized institutions, not assets that can circulate globally without banks, brokers, or borders.

Applying traditional financial regulatory models to technologies centered on autonomy, privacy, anonymity, and breaking global boundaries is destined to fail. The crypto community refers to it as “enforcement-style regulation”: Gary Gensler has accused multiple companies of violating securities laws while forcefully squeezing crypto-friendly banks out of the system.

“The SEC was trying to eliminate crypto through litigation,” Ryan recalled. He recounted receiving a subpoena while setting the dinner table on Easter Sunday in 2024. “I was the highest-ranking person at the Ethereum Foundation in the U.S.”

Arthur Hayes was sentenced to six months of house arrest in May 2022 after admitting that BitMEX had intentionally failed to implement anti-money laundering controls—specifically, BitMEX allowed U.S. clients to access the platform via VPN, and he had once boasted in a meeting that bribing Seychelles officials was cheaper than following U.S. regulations. Binance CEO CZ faced a harsher outcome, sentenced to four months in federal prison in April 2024 for assisting in money laundering, while Binance paid a $4.3 billion fine, which became one of the largest corporate penalties in U.S. history.

Then, Trump made a second appearance. In 2021, he called Bitcoin a scam, yet just three years later, he delivered a keynote address at a Bitcoin convention pledging to make America the “global crypto capital.” Although Trump's values were contrary to the global utopian vision of crypto believers, his support for the industry was enough to win votes.

“No party in the U.S. is inherently supportive or against crypto,” Arthur Hayes noted. If crypto investors become single-issue voters, the only question for politicians is: “Should we court them?”

“I’m probably the only person in crypto who didn’t vote for Trump,” Michael Novogratz said. As a major donor to progressive causes, he has tried for years to persuade Elizabeth Warren to meet with him about industry matters, but to no avail. “This industry is still full of political controversies, which it shouldn’t be; it should be bipartisan consensus. We need rules. Without innovation, it’s because there are no rules.”

In the last few months before Trump's potential re-election, Ryan received a letter: case dismissed. Ryan's lawyer said they had never seen the SEC act in such a manner. “The best outcome is when they stop contacting you.” And this time, the securities fraud charges disappeared altogether.

According to Ryan, the Biden administration realized the advantages of the U.S. presidential election were slim and could no longer afford to alienate the entire tech industry. Ultimately, the crypto industry poured $135 million into the 2024 elections, with most reportedly flowing to Republican candidates, supporting districts with an over 90% win rate.

In 2025, Trump launched his own meme coin, TRUMP, which briefly surged to a market cap of $10 billion, but later plunged 80%. After taking office, he pardoned Arthur Hayes and CZ (while SBF remained in prison).

Conclusion

In the eyes of different people, as cryptocurrency permeates mainstream institutions, it is either a complete betrayal of the original intentions or proof of experimental success. Some of the most ardent decentralization believers now appear in closed-door meetings at the White House. Holders of cryptocurrencies are not just ordinary people, but also sovereign wealth funds, family offices, and companies equipped with private wealth managers. This movement, originally meant to render Wall Street ineffective, has now become its strongest lobbying force and most reliable customer.

“We won,” Moose said, “but after winning, does cryptocurrency become just another ordinary asset class?”

Has the crypto industry become what it once despised? Or is it changing the world from within?

Amidst the winter, the answer still lingers in the wind, while those believers continue to stand firm, holding onto their faith.

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