Crypto is growing up: Goodbye yacht parties and NFTs, hello regulation and practical tech

• The three-day Messari Mainnet conference in New York was less expensive and less fun than it was a year ago.
• Gone were the Reddit bros and yacht parties, and in their place came suits and talk of regulation. 
• Insider's Phil Rosen caught up with dozens of attendees and executives at the conference.

Crypto isn't dead, it's just growing up.  

That's the sense I got after spending three days rubbing shoulders with crypto founders, blockchain pros, politicians and executives at Messari Mainnet in New York City. 

In contrast to previous years when the halls were full of tech bros and Reddit enthusiasts, most of the 3,000 attendees were buttoned-up professionals representing companies or brands. 

At the same conference last September — when the events seemed more well-attended and tickets were more expensive — many of the conversations I had were about speculative bets, NFTs, and the metaverse. I couldn't keep up with inbound interview requests, happy hours, and party invites. I had even secured a ticket to a networking event aboard a yacht — a level of opulence that was absent at this year's event. 

While crypto has come back from a brutal bear market in 2022, prices are still far below their peak, and some markets, like NFTs, are faring even worse – a recent report showed that 95% of the digital collectibles are probably worthless.

Dozens of attendees told me this week that they found last year's conference buzzier, more lively, and more fun — though not necessarily more productive for the industry players that are still standing.

A more boring scene, it seems, could be a good thing.

"There is less of the hype, speculation, costumes, and boat parties, and more serious discussion about opening up real-world assets like private equity, private credit, fixed income, and other alternatives to investors for the first time," Carlos Domingo, the chief executive of Securitize, told me. "The work to make this possible went on without notice the past few years, while the focus was on the hype stuff."

No more get-rich-quick schemes

When money comes easy and liquidity is high, there's no shortage of snake-oil salesmen convinced they're sitting on the next big thing. 

But in a bear market, it's a lot harder to stomach a half-baked project or obscure alt-coin.

At Messari this week, Skybridge Capital founder Anthony Scaramucci, a Wall Street bigwig and former White House communications chief, seemed to be the only one who gave an outlook on a specific asset, but the majority of speakers didn't talk about investments. 

The focus instead seemed to be on regulation, policy, and building practical tools that could help bring nascent technology into mainstream. Panels had titles like "Crypto Tax and Accounting," "What's the SEC's End Game for DeFi?," and "How to Make Crypto Actually Useful."

In a press breakfast hosted by Coinbase, executives demonstrated how to pay for coffee using crypto, and unveiled a new messaging feature for digital wallets that aims to streamline communication for peer-to-peer transactions. 

"The thing that will encourage skeptics is crypto as a technology, and moving away from crypto as an asset and speculation," said Jesse Pollak, the creator of Base, Coinbase's layer 2 ethereum blockchain. "We're moving more toward how crypto is helping small businesses, restaurants, advocacy groups. Those use-cases are what move the needle for everyday people, not another get-rich-quick scheme."

Crypto as an industry, he told me Thursday, has entered a new era. Bear market or not, more products and startups with real-world applications are springing up. 

Jess Houlgrave, the chief operating officer of WalletConnect, told me the heads-down mindset has been reflected in the conference, which she thinks was quieter than last year but higher quality.  

"You have key decision makers here from businesses, less noise around the edges, less retail investors," Houlgrave said. "Events continue to happen in a downturn, but they're smaller, more curated events rather than splashy parties."

The notion of "invisible technology" kept coming up in conversations. Crypto applications, the idea goes, will gain mainstream adoption once people use it without realizing it. 

"There's less gimmicky things, which is reflective of the maturity of the industry," Houlgrave said. "The business-to-business focus we're in right now is here to stay, since crypto won't be consumer-facing anyway. Eventually, consumers will be interacting with blockchain everyday but they just won't know it."

Crypto's biggest obstacle now, attendees said, has nothing to do with price action or investing in the next winning project, but figuring out how to keep innovating under the eye of increasingly tough US regulators. 

The long shadow of Gary Gensler

Gary Gensler, the chairman of the Securities and Exchange Commission, did not attend Messari Mainnet, but no one could stop saying his name. Scaramucci likened him to Jiminy Cricket, and presidential candidate Vivek Ramaswamy called out the regulator as a government redundancy. 

The SEC, Ramaswamy said in a fireside chat, should be chopped down to 25% of its staff because Gensler has "a bunch of people showing up to work  that shouldn't have a job in the first place."

Gensler most recently lost a battle with Grayscale after the SEC had rejected its bitcoin ETF proposal. Attendees said that their problem with the SEC chief lies with his inability to articulate clear guidelines for crypto. 

"Gary Gensler cannot state whether ethereum is a security or not," Ramaswamy told the audience. "Tomorrow, is a bank deposit a security? The US dollar? You have an agency that is purposely obscuring."

The lack of clarity is what cripples innovation particularly in the US, Coinbase's Pollak told me, and it's capping potential on those already in the industry while keeping skeptics sidelined. Singapore, Hong Kong, and some European countries are all becoming more attractive destinations for crypto companies looking to grow and make an impact. 

"We need a clear policy framework so people can innovate," Pollak said. "Innovators are moving outside the US, moving to regions that are being more proactive from a policy perspective."

To that point, the Singapore conference Token 2049 happened days before Messari Mainnet. Asia's crypto scene, apparently, has no shortage of festivities and hype, according to people who attended.

While I didn't find Messari Mainnet as fast-paced or fun this year — a consensus view shared by many other attendees — that isn't a necessarily a bad thing. It just shows how priorities have shifted. 

The industry is growing up, and the grown-ups appear to be taking the lead.

"In a bull market there's so much noise and it's so distracting, no real building gets done," Pollak said. "The people showing up to Mainnet now are people who have their heads down, building awesome products."