What I Got Right and Wrong in 2018
A year-end review of my predictions and beliefs. I was right about the bear market, institutional infrastructure, and stablecoin growth. I was wrong about timelines, the resilience of bad projects, and how long the market would take to clear.
What I Got Right and Wrong in 2018
Intellectual honesty requires looking back. It is easy to write about the future — predictions are free, and nobody checks the receipts until much later. It is harder to review your own record honestly, acknowledge what you got wrong, and update your thinking accordingly. But that is the only way to improve as an analyst and as a thinker.
Here is my scorecard for 2018.
What I Got Right
The bear market was coming. I wrote in late 2017 that the market was overheated, that valuations had detached from fundamentals, and that a significant correction was inevitable. The specific timing was uncertain, but the direction was clear. The market peaked in January 2018 and has been declining ever since. The correction was not just inevitable — it was necessary. The speculative excess of 2017 needed to be purged before the industry could build on a solid foundation.
Institutional infrastructure would be built during the downturn. This was one of my highest-conviction predictions, and it played out almost exactly as expected. Fidelity launched its Digital Assets division. Bakkt was announced by ICE, the parent company of the New York Stock Exchange. Multiple custody providers — Coinbase Custody, BitGo, Anchorage — launched or expanded their offerings. The institutions did not wait for the market to recover. They built through the downturn, positioning themselves for the next cycle.
Stablecoins would grow in importance. USDC launched with Circle and Coinbase backing. Dai survived a brutal bear market with its peg intact. Stablecoin trading volume grew even as everything else contracted. The stablecoin thesis — that crypto markets need a stable unit of account and that the category would grow regardless of speculative sentiment — proved correct.
Most ICO projects would fail. They did. Massively. The vast majority of projects that raised capital through ICOs in 2017 have either shut down, run out of money, or become effectively inactive. The few that survive are the ones that had real teams, real products, and the discipline to manage their treasuries through the downturn.
Compliance would become a competitive advantage. The projects that invested early in legal and regulatory infrastructure — licensing, banking relationships, KYC/AML processes — are the ones still standing. The projects that treated compliance as an afterthought are the ones facing enforcement actions, losing banking relationships, or being forced out of key markets.
What I Got Wrong
Timeline optimism. I expected institutional products to arrive faster than they did. Bakkt delayed its launch multiple times. The Bitcoin ETF was rejected — again. Regulatory frameworks took longer to develop than I anticipated. The direction was right, but the timeline was too aggressive. Institutional adoption moves at institutional speed, which is measured in years, not months.
Underestimating bad project resilience. I expected the bear market to kill bad projects quickly. Instead, some projects with no product, no users, and no credible path to value survived far longer than they should have — sustained by treasury management, community inertia, and the reluctance of token holders to admit they had made a mistake. The zombie projects of 2018 are a reminder that markets can stay irrational longer than you expect, in both directions.
The depth of the drawdown. I expected a significant correction — perhaps 50-60% from the peak, consistent with previous crypto cycles. I did not expect an 85% decline in total market capitalisation. The leverage embedded in the system — margin trading, ICO treasuries denominated in ETH, structured products sold to retail investors — was deeper than I realised. When that leverage unwound, it amplified the decline far beyond what fundamentals alone would have produced.
The Lesson
Being directionally right is not enough. Timing matters — being right about the direction but wrong about the timeline can be just as costly as being wrong about the direction entirely. Magnitude matters — expecting a 50% correction and getting an 85% correction are very different experiences, even if both are "corrections." And humility about what you do not know matters most — the leverage embedded in the system, the resilience of bad projects, and the speed of institutional adoption were all areas where my model was incomplete.
The goal for 2019 is not to be right about everything. It is to be honest about what I got wrong, update my models accordingly, and make better predictions with better-calibrated confidence levels.
The goal is not to be right about everything. It is to be honest about what you got wrong — and to update your model accordingly. Intellectual honesty is the only edge that compounds over time.