Crypto Failed as an Asset Class, Say Economist Alex Kruger

Economist and trader Alex Kruger says crypto has largely failed as an asset class despite years of industry growth and blockchain adoption. His remarks come as Bitcoin trades near $67,000, almost 50% below its 2025 peak of $126,000.

Meanwhile, approximately 15% to 25% of Bitcoin investors currently hold their assets at an unrealized loss.

Why Crypto Has Failed as an Asset Class?

In a recent post, Kruger said many crypto assets failed to deliver meaningful value to investors despite years of industry growth.

According to him, a large portion of tokens have little real utility, weak value capture models, or founders who repeatedly sold tokens into the market. He also pointed to the recent memecoin boom, describing it as a cycle that drained both capital and confidence from retail investors.

Another concern is the growing number of DeFi exploits. More than $600 million was reportedly lost to hacks in April 2026 alone, reinforcing concerns around security and investor protection.

The combination of token dilution, speculation, and hacks has made it harder for new users to trust the broader crypto market.

Privacy and AI Tokens Stand Out

Kruger also noted that a few sectors continue attracting capital. Privacy-focused networks remain relevant as demand grows for private, non-custodial stores of value. He specifically pointed to Zcash, which has recently outperformed Bitcoin despite broader market weakness.

He also identified AI-related crypto projects as one of the few active growth areas, though he warned that many remain driven by narratives rather than fundamentals. One exception, he said, is Venice, which links token value directly to business performance.

Blockchain Adoption Continues to Expand

Despite his criticism of crypto assets, Kruger argued that blockchain technology itself is thriving.

Stablecoin supply has climbed to nearly $322 billion, while prediction markets have generated roughly $60 billion in trading volume this year. Meanwhile, traditional finance firms are increasingly embracing tokenization, with BlackRock’s tokenized fund growing to approximately $2.5 billion.

Kruger noted that many of today’s strongest blockchain use cases are tied to financial infrastructure rather than speculative tokens. Areas such as stablecoins, tokenized assets, perpetual futures, and prediction markets continue attracting users and institutional interest.

Bitcoin Traders Prediction Bearish Crash

On the slip side, traders on major prediction platforms like Polymarket & Kalshi are becoming less confident about Bitcoin’s near-term outlook. Their odds of Bitcoin dropping below $50,000 have jumped to 30% by the end of the year.

However, popular trader Michael van de Poppe said the area below $66,000 could present opportunities for long-term buyers, while identifying the 200-week moving average near $61,000 as a major support level.