Image Source: Unsplash

I don’t really “get” crypto. To be clear, I understand the basics, or at least, some of it. I understand that “crypto” actually refers to an entire universe of assets – some of which might have some value and others that are downright (and purposefully) silly.

I understand (in theory, at least) how a blockchain would work, how a decentralized ledger could manage transactions without the need for a central intermediary.

And I understand that, yes, many of these assets are up over the past year. Bitcoin – the largest asset by market capitalization – has been trading at around approximately $107,000. It was around $68,000 last October.

I understand all that. But I don’t quite get it. Maybe it’s my experience as a real estate developer and investor.

You know the great thing about real estate? You can see it. You can touch it. You can operate real businesses (with real earnings) with it. It can provide rental income that you can deposit into your bank account. And it doesn’t (usually, at least) crash in value in a single day.

I’m not sure I could say the same about most digital assets, which I’m told is the preferred term.

But let it never be said that I can’t have an open mind. And I will admit that there are some potentially interesting applications. For instance, I’m very intrigued by the possibility of “tokenizing” assets like real estate. In theory, it could create a market and provide liquidity to an otherwise illiquid asset.

As I shared in past essays, what I do know about this market has come from my son, who has been educating me about these assets. And he told me something interesting about the crypto crash last week.

The $20,000 Candle

Stock markets had a rough day last Friday. President Trump announced he was considering adding large tariffs on Chinese goods. A few hours later, he followed up by telling us how large – 100%.

As Nick Ward shared in the latest update, investors didn’t like that at all. Here’s the recap:

The Nasdaq Composite Index fell more than 2% almost immediately. Nvidia (NVDA) and Advanced Micro Devices (AMD) fell 5% and 8%, respectively, on Friday.

But the downturn was, apparently, much worse over in the crypto world, with Bitcoin falling 16.5% for the day:
 

Source: X.com

Bitcoin falling more than 16% in a single day isn’t great, but it’s probably not world-ending. But things got downright ugly for the altcoins (alternative coins), the smaller, less liquid assets. Here’s how my son, Nicholas Thomas, explained it:

Last week’s brutal selloff exposed another critical weakness in the altcoin market: liquidity, or rather the lack of it. While Bitcoin dropped 16.50% in a single session, the broader altcoin market collapsed over 30% in one day, with many individual tokens plunging 50% to 70%. These aren’t just larger percentage moves – they’re evidence of dangerously thin order books that can evaporate instantly when selling pressure hits.

[…]

The same thin markets that allow tokens to double or triple quickly during rallies become death spirals during selloffs, amplifying losses far beyond what the underlying fundamentals – if any exist – would justify.

I’m biased, of course, but I think Nick is spot on.

I’ve never traded crypto, but I know what it means to be on the wrong side of a liquidity crunch. I’ve been very open about my experience as a real estate investor and developer during the 2008/2009 crisis. And it’s why risk management and SWAN (sleep well at night) investing is such a cornerstone of the research we publish.

I’m glad my son learned that lesson from his old man. But it would seem some of the less-experienced crypto traders are learning that lesson the hard way. I’ve seen posts from traders claiming to have been totally wiped out.
 

Source: X.com

That’s an expensive lesson to learn. But as my son puts it, “illiquidity cuts both ways.”

It’s Not All Bad News for Crypto

While the crypto traders lick their wounds, things haven’t been all bad for this market. Something else my son taught me is that this ecosystem looks to be evolving, perhaps even maturing.

Specifically, he points to stablecoins, which are digital assets typically pegged to a fiat currency like the dollar, hence the name. Here’s how Nick put it:

This surge in on-chain activity is far from just retail speculation – it reflects substantial real-world adoption and growth within the stablecoin ecosystem. In 2025, stablecoins shattered records with over $15.6 trillion in on-chain transfer volume during Q3 alone, representing a 150% year-over-year increase.

This growth was driven by both regulatory clarity, such as the passage of the GENIUS Act, and strong institutional demand, which fueled a $45 billion increase in stablecoin supply. Ethereum remains the dominant network, hosting nearly two-thirds of stablecoin supply and processing $1.74 trillion in transfers in September 2025.

Again, Nick puts it in terms even his dad can understand. I can’t tell you how many developments I’ve worked on that have been bogged down by foggy regulations. I also know what it means to actually utilize a project (in my experience, real estate) versus just speculating on it. It tends to be the sign of a maturing market.

But here’s the real question investors need to consider: Will these assets prove themselves as projects that can stand on their own two feet? Or are they still riding a wave of speculation and optimism like so many unprofitable stocks right now? I’ll let Nick have the last word:

[Speculation] is a defining characteristic of today’s market, where narrative trumps fundamentals and retail investors chase momentum regardless of profitability timelines. In this context, crypto’s volatility doesn’t look quite as extreme – it’s simply participating in a broader market environment where speculative assets of all kinds are experiencing wild swings based on sentiment rather than earnings.

I won’t pretend to know what comes next for crypto. But I’ll admit that Nick’s analysis has led me to keep an open mind. I don’t think we’ll be recommending these assets, but I also won’t dismiss them outright.

I’m very proud of my son. I appreciate that he approaches this market with a seriousness that you don’t always see. He treats it as a real asset class that deserves real analysis. And I’m relieved he understands the downsides that come along with it. As parents, we spend years teaching our kids what we know. It’s always a pleasant surprise when they can teach us a thing or two.

More By This Author: