I compare it to the dot com bubble. This is simply what happens when you introduce large amounts of stupid money to a very immature sector. The average American doesn't exist. But of course a lot of amateur investors with dollar signs that lost their money 20 years ago, are the same kind of gullible fools lining up for a repeat of that. So, I'm happy it is happening and it can't happen fast enough for me. In fact, it's long overdue.
Back in the day, if you even hinted at "we might get a domain name and a website", you'd be getting funding. People were dumping millions in some pretty moronic and misguided notions. A lot of those companies failed for quite obvious reasons. But not without making several people very rich. Investors have a way with money where they manage to not lose when things go bad and win a lot when that fails to happen. That's one of the perks of playing with other people's money. Worst case you just take your cut and then you wash your hands of the whole thing. Best case it was all you and your genius insights. Sometimes stupid money is tempting for smart investors. When it's on offer, there will be people taking it.
And of course few companies actually had some good ideas and got a little more funding than they would have otherwise gotten and used that to become amazingly successful. Amazon, Google, Ebay, and a few others survived the bursting of the bubble and survived and thrived.
The same is happening with crypto and blockchain companies. Most of them are obviously empty shells run by charlatans operating out of dodgy jurisdictions. But those are actually pretty easy to spot. If it looks dodgy, it more than likely is super dodgy. If it looks to good to be true, it probably is. So, people losing their money are mostly just fools. The exact same kind of fools that lost their money 20 years ago. When some of those fools are institutional investors betting with your pension money, you'd be right to be a bit concerned about that though. That too happened 20 years ago.
More interesting is to look for the things that just aren't that dodgy at a first glance. Some of these companies are looking pretty serious actually. Solid investors, actual customers, working products, etc. It's not all scams and pyramid schemes and those might be the possible survivors of the crypto bubble bursting. Some of the tech is actually quite impressive and looks like it might be used to solve some real problems.
There are probably more than few very good tech companies just putting their heads down and getting some real work done right now. Those are the interesting ones to follow.