hearing on the digital dollar two weeks ago was not only a public exploration and introduction to the concept a central bank-backed digital currency, the hearing was also used as a platform to publicly assassinate the viability of the private (“bogus” in the words of Senator Warren) cryptocurrency market (bitcoin, stablecoins, etc.).
With this in mind, the Chinese government has continually tightened control over the crypto market in China, most recently cracking down on cryptocurrency mining in the country. The U.S. Justice Department announced a few weeks ago that it “recovered” $2.3 million in cryptocurrency of the ransom collected from the Colonial Pipeline hack. And today, it was reported that South Korea seized almost $50 million of crypto assets from citizens accused of tax evasion.
So the benefits of the private cryptocurrency market are being deconstructed by governments. Add to that, even after gaining traction, the private crypto market continues to be used primarily as a tool of corruption and speculation. With that, this chart set up argues for a typical bubble outcome (crash).
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You write about "benefits of the private cryptocurrency market [...] being deconstructed", yet your examples focus on governments fighting crime (extortion, tax evasion).
I don't understand why people committing crimes would be representative or even relevant to the "benefits of the private cryptocurrency market.
If the police arrests a telephone scammer, would you claim that governments deconstruct the benefits of private telephony infrastructure?
One characteristic benefit of many cryptocurrencies is that the dependency on middlemen for transferring value was reduced. I think this benefit is still there, although there are a lot of people who don't use it - not because governments would "deconstruct" it, but because the users themselves aren't capable of handling a value transmission mechanism that comes with some volatility in comparison with the mechanisms they are used to.