I mean the end state of crypto isn’t a very positive one. Either it will crash catastrophically or it will slowly fizzle out until the majority of people just forget about it. Either way, at some point virtually nobody will be using it.
If that's the case, that end state will also coincide with government bans, and non-criminals leaving the space. Which will be catastrophic to both crypto's valuations, and to anyone doing business around it.
There wasn't exactly a huge amount of interest in the startup/Wall Street space for building speculative financial instruments around, say, ISIS-issued 5-year bonds.
Speculative assets rarely crash, despite people wanting the drama of it all. If ETH went to $100, enough people would buy it in the hopes it would skyrocket again and make them fabulously wealthy, pushing the price up, but lower than last time, until it cycled back and so on until it fizzles out.
Because it doesn't seem like Crypto is a good inflation hedge. If you're worried about inflation from unwise increases in the fiat money supply, then it seems like you want something with intrinsic value (real estate, other tangible assets, inflation protected bonds, etc), but crypto is the opposite of that. It's too volatile to be an actual currency so what is it exactly other than a purely speculative asset?
Nothing has intrinsic value. All value comes from subjective interpretation of what is valuable.
Assets with a cash flow have something you can calculate by discounting future income. But at what rate? The market rate? Some people have a higher time preference compared to the market rate, while others have a lower one. In any case, that preference is not negative as in the EU. Nobody wants to receive money later instead of now.
"Other tangible assets" are also a risky bet. Oil hit a negative price in 2020. If supply adjusts to demand, prices should go down as technology makes it cheaper and cheaper to produce things.
Even food is subjective. You can eat for optimal health, but few people are doing that, and instead eat much too much meat. Meat requires much more land per gram of protein.
What happens if people stop SUBJECTIVELY choosing branded sugar water? Coca Cola goes down, which is what "value" investor Warren Buffett owns as 6.71% of Berkshire.
Everything is a risky bet and there is always subjectivity involved in prices, but what I mean by "intrinsic value" is that the the asset has so tangible use that is valuable to people directly. Oil has intrinsic value because people can use it to generate electricity. As you say, equities have (theoretically) some cash flow associated with them so you are buying a cut of future profits.
But what is the theoretically correct price of Bitcoin? In some sense it's just like every other asset, the right price is what someone else will pay for it. But what you actually care about is what someone will pay for it 1/5/10 years from now (especially if you plan to use it as a store of value). And how do you even begin to model that?
