The crypto markets still have many puzzles, but they are beginning to reveal their secrets. The last few months of chaos show what Bitcoin and other crypto assets are for: they are advanced tools of globalization, luxury goods for complex and well-functioning markets, not protections against the depredations of hostile governments.

A common story, especially popular in libertarian circles, has been that when inflation soars and governments confiscate private wealth, cryptocurrencies will be a vital haven. It seems more and more that this story is wrong.

In February, Canadian Prime Minister Justin Trudeau froze the bank accounts of many of the truckers arriving in Ottawa. That action was soon reversed, but the message was clear: the wealth of political opponents is vulnerable. Additionally, payment providers stopped the flow of donated funds to truckers. You might have hoped that crypto would have been used as an alternative, but it didn’t.

Since then, the rate of price inflation in the US has risen to 7.9%, much higher than was generally anticipated a year ago. Given the turmoil in the oil and grain markets, European inflation rates also appear poised to rise. However, the prices of Bitcoin and Ether have dropped radically since November and more so since the beginning of March.

Russia’s attack on Ukraine has likely raised the possibility of a broader war, perhaps including nuclear weapons. However, this has not worked to the benefit of cryptocurrencies either.

Wealth confiscations have been applied to various Russian oligarchs, mostly in Europe, and such policies appear to be popular. However, a recent increase in the price of cryptocurrencies appears to be the result of a relatively lenient executive order by President Joe Biden on crypto regulation.

So instead of thinking of crypto as the last resort for totalitarian, doomsday, or “Mad Max” scenarios, I suggest a more prosaic truth: the future of crypto assets lies in joining the financial and regulatory establishment, not to rebel against him. If most of the world goes to hell, that is bearish for cryptocurrencies. Crypto will work best in conjunction with other financial networks, not as substitutes for them.

Think about some of the possible legitimate use cases for cryptocurrencies. Perhaps entrepreneurs will build a meaningful online metaverse, one that spans national borders and allows for fruitful interactions, including commercial ones. For many transactions, especially micropayments, cryptocurrency transfers may make more sense than trying to process all operations through current networks in dollars. There is at least the promise that cryptocurrencies will become faster, more reliable, and more secure.

In this scenario, cryptocurrencies are worth more when global business networks and internet connections are stable. Right now, they are moving in the opposite direction, and as a result, the price of cryptocurrencies is falling. The reality is that the world of cryptocurrencies has been a globalized product from the beginning.

Or consider DeFi, or decentralized finance. The real potential of DeFi is lending over long distances, for example, sending funds to the most talented entrepreneurs in Africa or Southeast Asia, or, for that matter, Russia and Ukraine. As with the metaverse, that too is unrealized potential, but it has been and remains a possibility. Or imagine any of the dozens of other productive uses of cryptocurrencies, perhaps currently little publicized or unimaginable, just as NFTs were not “a thing” until very recently. Like loans, these uses will only see their best and maximum development in a stable and globalized world economy.

It is encouraging to see many people making charitable crypto donations to the resistance in Ukraine. But the true future of cryptocurrencies lies in sustainable trading, not one-time transfers. I also can’t help but notice that crypto innovator Vitalik Buterin hails from Ukraine. A stable Ukraine, or Russia, for that matter, is more likely to produce value-enhancing entrepreneurs.

To be clear, this is not a skeptical argument against cryptocurrencies. If cryptocurrencies are good for many different purposes, and not just a doomsday scenario, their value should expand with a healthier and more stable global economy. That is exactly what the current drop in cryptocurrency market prices indicates.

It is also important to put aside the doomsday scenarios for cryptocurrencies. Probably nothing will work well or be of great value on those worlds.

One day, perhaps, although that day seems far away now, cryptocurrencies may become just another boring financial instrument. When that day comes, it will be worth remembering that when it comes to financial matters, boredom may be exactly what you’re looking for.

(This story has not been edited by NDTV staff and is automatically generated from a syndicated feed.)