LOSS $1.35 TRILLION! But the Cryptocurrency price crash strengthens the case for crypto!

tech.hindustantimes.com:

Cryptocurrency prices are tumbling. By one account, crypto assets have lost about $1.35 trillion globally since November, with some falling in price by 80% or more. Many investors feel a real pinch. The good news is that the global economy, or for that matter American society, is not poorer. And thus there need not be much of an economic response to adjust to these new prices. (The flipside is that if crypto prices see another steep increase, there won’t be much cause to celebrate.)

Over time I have moved from crypto-skeptical to what I call crypto-hopeful. So this is a good moment to assess how radically lower crypto prices will affect how socially valuable crypto will prove to be.

One possibility is that crypto prices, even at current levels, are mostly a bubble and that crypto won’t do much that is useful. In that case lower crypto prices mean less purchasing power for crypto holders, but that doesn’t translate into less wealth for the economy as a whole. People who don’t own much crypto will, over the longer run, have greater command over goods and services. The crypto holders who were bidding against them will, over time, spend less. Purchasing power will shift to the non-crypto holders.

In these scenarios the psychological losses are felt before the psychological gains. Most crypto holders are unhappy right now, but few non-holders are celebrating their (modest) boost in purchasing power. Over time, however, these non-crypto-holders will be able to buy more at better prices than they had been expecting. What the crypto holders lose will be roughly about what the non-crypto holders gain.

Consider another scenario — one where crypto is poised to provide a lot of useful services. Perhaps crypto assets will underpin useful