The Darkest Hour: Crypto in 2026 = The Internet in 2002

Author: DeFi Cheetah

Translation: PANews

Kyle Samani is leaving for AI, longevity technologies, and robotics. If you're a founder, a developer, or a believer still holding firm in the crypto industry today, you can feel it. The air has changed. The electrifying, chaotic idealism of 2021 has been replaced by a stale, collective silence.

Why did Kyle leave? You can find the answer in his quickly deleted tweets:

1. Cryptocurrencies are "fundamentally not as fun as we hoped."

2. Blockchain is merely an asset ledger.

3. Most of the "interesting questions have already been answered."

For me, this is more than just an investor's exhaustion. It's a surrender of blockchain and cryptocurrency. It marks a profound shift as high-belief capital begins to drift toward the glitz of AI, relegating cryptocurrency to a tedious backstage role in finance.

But I'm writing this to tell you that this despair is a lie.

We have reached the most dangerous, yet most critical, turning point in the industry. We are witnessing the "elitization" of cryptocurrencies, and if we are not careful, we will let the real revolution die at the hands of "fintech wrappers."

The Rise of "Fintech Wrappers"

Headlines are cheering that institutions are finally entering the space. ETFs have been approved, banks are piloting subnets, and asset management companies are tokenizing government bonds. But look further ahead.

These institutions are not built on the innovation and permissionless spirit of cryptocurrency. They are building “fintech wrappers”—products that merely use blockchain technology to improve settlement efficiency while retaining the same rent-seeking and intermediary structures found in legacy systems.

They're not investing in innovative cryptocurrency architecture; they're simply porting their own silos to the blockchain. To them, the blockchain is just a cheaper, global SQL database. If their product can exist on a private network (which most should), they're not building cryptocurrency; they're just upgrading their IT infrastructure.

When a bank launches a private blockchain or a "walled garden" stablecoin, they are building a fintech wrapper. They are merely using the technology to improve settlement efficiency while retaining the rent-seeking and intermediary structures of the legacy system.

• They disrupted liquidity.

• They need a licensed API to interact.

• They rely on reconciliation between different private ledgers.

If a product can exist on a private SQL database with just a few API keys, it is not an encrypted product. It is merely an IT upgrade.

Western Union Syndrome

The most serious culprits of the "fintech wrapper" syndrome are the endless stream of stablecoin payment startups.

These projects tout themselves as revolutionary because they allow you to send dollars across borders in seconds. But look at their architecture. They're simply treating blockchain as a transport track.

1. User A enters the currency.

2. The protocol converts to a stablecoin.

3. Stablecoins are moved from wallet X to wallet Y.

4. User B converts the currency off-chain to fiat currency.

This is not an encrypted product. This is a Western Union money transfer with a private key.

The fatal flaw of these wrappers is their inability to retain value on-chain. Value flows through the system but never settles into the ecosystem. Economic value is captured off-chain by startup equity holders, while the blockchain itself is treated as a commodified internet cable—simple, cheap, and invisible.

True encryption is more than just "sending money." It's about the synchronous execution of logic. In the legacy financial world, systems are asynchronous, and liquidity is fragmented between the NYSE, NASDAQ, London, and Tokyo. If you want to transfer funds from a broker to a bank and then to a lending platform, it takes several days (T+2 settlement). This involves three different ledgers, three different trust assumptions, and friction at every step.

In DeFi, however, liquidity pools are a global resource that any application, bot, or user can access instantly without requesting permission from an intermediary. This isn't "idealism" or "fundamentalism." It's capital efficiency.

2002 vs. 2026: The "Practicality" Shift

It's impossible to ignore the elephant in the room: AI. Artificial intelligence has sucked the oxygen out of the room, delivering tangible, magical, and productivity-enhancing results that make the clunky UX and governance farces of cryptocurrency seem outdated.

This has led to a crisis of faith. Founders are shifting their focus. VCs are rebranding. The narrative has shifted from a "decentralized world" to "reducing settlement time by 0.5 seconds."

But history has an interesting rhythm.

We are currently in the digital version of 2002.

It has collapsed. The media proclaims the internet is only useful for email and buying books. "Interesting questions" are supposedly answered. The narrative is the same after the Dot-Com bubble burst. The "information superhighway" is seen as a failure.

Why? Because early internet companies were merely "newspaper wrappers"—they put physical newspapers on screens. They didn't leverage the internet's native features (hyperlinks, social graphs, user-generated content).

But as tourists left and speculators went bankrupt, the builders who remained were quietly laying fiber optic cables and writing code for the cloud, social media, and mobile internet. The “boring” years of 2002–2005 were the gestation period for the world we live in today.

We are at the same point in time. "Fintech wrappers" are the "newspaper wrappers" of our time. They are putting old finance on a new track.

The winners of the next cycle will be those counter-revolutionaries who stop trying to please institutions with private networks and start leveraging the inherent physical properties of blockchain:

• A global database, not an isolated one.

• Atomic composability rather than API integration.

• Permissionless mobility, not a walled garden.

Contrarian Bet: Beyond the Ledger

Kyle Samani believes blockchain is simply an asset ledger. This is a consensus view that cryptocurrencies will only make Wall Street more efficient. However, in investing, consensus views rarely translate into alpha.

The counter-revolutionary bet is that we haven't even scratched the surface of what trustless coordination can do.

We're not here to build a better database for BlackRock. We're here to build things that simply can't exist on a private server.

Conclusion

This is the founder's darkest moment. The hype is gone. The "easy money" is gone. The visionary founder is leaving.

good.

Let them go. Let the price chasers chase. Let institutions build their private ledgers and call it innovation.

This is the big filter. The crypto projects that will seize the greatest opportunities in blockchain will not be those that imitate banks. They will be those that double down on the core attributes of blockchain—permissionless, composable, and trustless—to solve problems that legacy systems cannot.

"This is the best of times, this is the worst of times." We are not at the end. We are just at the beginning of the end. The era of "fintech wrappers" is a distraction. The real work—the work of building a sovereign internet—begins now.

Stay focused. Build the impossible.