2019: A year of quiet infrastructure deployment
This essay draws from a letter I wrote to investors at the end of 2019, when I was managing a crypto fund through the industry’s first true post-bubble cycle. Reading it now, it feels like a time capsule from an era when the noise was still louder than the signal.
2019 began with confidence and ended with contradiction. Equity markets rallied, the yield curve inverted, and talk of recession filled the air. In that environment, crypto rose from the ashes of its 2018 bear market, then promptly reminded everyone how volatile belief can be.
Bitcoin led a 230% rally from April to July before losing half its value in the second half. Yet even after the deflation, the asset class finished the year up roughly 90%—beating the NASDAQ, the S&P, and REITs. Still, sentiment was dark. Investors anchored on the summer’s highs, unable to see through recency bias and loss aversion.
That dissonance—the gap between absolute performance and perceived failure—captures much of what defines crypto’s psychology. When narratives swing faster than fundamentals can evolve, volatility becomes emotional before it becomes financial.
2019 wasn’t a year of explosive returns. It was a year when infrastructure quietly solidified—both top-down, through institutional adoption, and bottom-up, through open-source experimentation.
Top-down—Custody, derivatives, and data pipelines matured. Fidelity, ICE, CME, and Coinbase expanded the financial plumbing that future strategies will rely on. ETFs were still premature—markets too fragmented, prices too contested, but institutional curiosity deepened. Millennials treated Grayscale’s Bitcoin Trust like a tech stock. Regulators, meanwhile, wavered between curiosity and caution. Libra’s short-lived ascent into Washington hearings clarified one thing: no one quite knows who should hold the pen on crypto policy.
China did. Xi Jinping’s October endorsement of blockchain as national strategy triggered a chain reaction. Within months, German banks gained approval to custody crypto, and the ECB began testing digital currency concepts. The U.S., as usual, legislated by committee.
Bottom-up—While policymakers debated, builders built. Ethereum consolidated its position as the laboratory of decentralized finance. In 2019 alone, protocols like Maker, Compound, Uniswap, and Synthetix demonstrated that capital coordination could happen entirely on-chain—without banks, brokers, or trusted intermediaries.
Each protocol was small by traditional standards, but collectively they proved a point: money is programmable, and finance is now open to iteration. Ethereum grew more expressive; developers could compose financial logic as software. New frameworks, tools, and primitives made experimentation cheaper, faster, and, crucially, cumulative.
Meanwhile, domain-specific chains began to appear. Different architectures optimized for different tasks; Ethereum for high-value settlement, EOS and WAX for high-frequency, low-value interaction. Layer 2 solutions promised scalability, but specialization hinted at something deeper: an ecosystem evolving toward purpose-built diversity, not one-chain monopoly.
Every market cycle hides a deeper project beneath it. 2019’s was construction. The industry moved from speculation to capability, from narrative to infrastructure. Institutions built the rails; developers built the applications. The foundation was being laid for systems that could carry real economic weight.
Progress, in crypto as in any frontier, is uneven and recursive. Hype retreats, builders stay, and what remains becomes the new baseline for the next wave.
2019 was that baseline year.