Crypto Is A ‘Failed’ Asset Class, Says Renowned Economist

Economist Alex Krüger argues that most crypto tokens have failed as an asset class due to weak value accrual, founder misconduct, and speculative excess, though he acknowledges blockchain infrastructure—particularly stablecoins, tokenization, prediction markets, and privacy assets—continues advancing meaningfully. His nuanced critique distinguishes between the broken legacy token market and emerging blockchain applications with real revenue mechanisms and user demand.

Krüger's declaration that crypto has 'largely failed' as an asset class reflects growing frustration within the sophisticated investor community regarding the disconnect between speculative token narratives and actual business fundamentals. The critique centers on a structural problem: most tokens lack meaningful value capture mechanisms or revenue distribution to holders, while founders have exploited minimal regulatory oversight to liquidate positions at retail expense. This assessment carries weight because it comes from someone observing crypto markets across multiple cycles rather than dismissing blockchain technology outright.

The economist's distinction between 'old crypto' and emerging blockchain applications represents the market's natural evolution. While narrative-driven tokens have repeatedly disappointed, infrastructure layers—stablecoins now handling trillions in transaction volume, tokenized traditional assets attracting institutional capital, and prediction markets influencing information markets—operate with clearer economic logic. This bifurcation explains why crypto market cap remains substantial despite token performance failures.

Krüger identifies specific opportunities where tokens function as equity-like instruments with revenue sharing. Hyperliquid's buyback mechanism and Venice's connection to operating AI platforms exemplify tokens tied to actual value creation rather than speculative momentum. Privacy assets like Zcash demonstrate genuine demand independent of market cycles, evidenced by inflows during Bitcoin downturns. The security vulnerabilities he cites—DeFi hacks accelerating since April and meme coin speculation extracting capital—created legitimacy damage that fundamentals-based projects must overcome.

For investors, the implication is clear: blanket crypto exposure carries structural risks, but selective allocation toward tokens with demonstrable revenue capture and infrastructure projects serving real use cases remains defensible. The sector transitions from a speculative casino toward a diversified ecosystem where infrastructure and revenue-generating applications survive while pure narrative plays face persistent pressure.

• →Most crypto tokens lack durable value accrual mechanisms, with founders repeatedly dumping positions on retail investors without guardrails.
• →Blockchain infrastructure—stablecoins, tokenization, prediction markets—continues advancing while legacy token markets remain structurally broken.
• →Privacy assets and AI tokens show selective viability where tied to real user demand, revenue generation, or capital return mechanisms like buybacks.
• →DeFi hacks and memecoin speculation have significantly damaged crypto's credibility as an institutional investable asset class.
• →The sector's future depends on infrastructure plays and tokens with equity-like properties rather than narrative-driven speculative exposure.