(Bloomberg Opinion) -- Ignore the stripper poles. He won't be distracted by the illuminated floor. Disconnect from reggaeton.
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Actually, this is a story about cryptography: cryptography as the dreamers imagined it could be, before it all went so wrong.
"If you've got bear market blues, give me a round of applause."
That's Pedro Rivera, 43, in a striped ensemble and lavender-tinted sunglasses, yelling into a microphone.
It's 9 pm at the cavernous 7eight7 nightclub in Puerto Rico's capital: "Where partygoers, hedonists and dreamers come together," the website promises.
Tonight's not-so-big attraction: Crypto Mondays, a networking party that also passes for a bit of group therapy these days.
Before joke coins shot to the moon, bored ape NFTs sold in the millions, and FTX founder Sam Bankman-Fried built and spent billions in the Bahamas, there was Puerto Rico. Entrepreneurs flocked to San Juan as early as 2016, drawn by low taxes, wide beaches, and the hope of creating a crypto haven.
That is still a work in progress. The crypto universe has operated in crisis mode since May, when the collapse of the alleged TerraUSD stablecoin helped trigger a sell-off.
The implosion of FTX, once the world's second-largest cryptocurrency exchange, further unsettled investors last month. Bankman-Fried, 30, faces criminal charges and civil action in the US, a dramatic downfall for a former billionaire who once graced the covers of Fortune and Forbes.
Cryptocurrency prices have plummeted along with the reputation of Bankman-Fried. Bitcoin is now worth around $17,000, far from its November 2021 peak of $68,000.
smaller crowds
As a result, many of Puerto Rico's cryptographers are now poorer, though possibly wiser. Some sporting goods with the word "Broke", spelled with a Bitcoin-style "B".
And yet believers will believe. Puerto Rico Blockchain Week began for the second time in early December, the week before Bankman-Fried's arrest on December 12 in the Bahamas.
Crowds at Blockchain Week conferences and panel discussions were lighter than last year. But despite everything, his enthusiasm remained.
Inside 7eight7, cryptocurrency supporters scream as Rivera lowers the mic. He moved to Puerto Rico nearly five years ago from Miami and founded Crypto Mondays San Juan in 2018. Rivera, of Puerto Rican descent, hosts the weekly events with his brother Isaac, who joined him on the island two years ago.
About 40 men, and almost all of them are men, have shown up tonight. This time last year, Isaac Rivera says, 500 came out for Crypto Monday during Blockchain Week.
Don't believe the headlines, says Isaac, 48. Puerto Rico's cryptographers will bounce back.
"They'll be back once the market picks up, you know what I mean?" he says.
Alexander Pearson, 37, leans over the bar. He moved here to trade crypto in 2021 after living with his family in North Carolina during the worst of the pandemic.
Pearson says that the crypto winter, marked by falling token prices, has been difficult.
“I was feeling pretty low,” he says. Then she shakes him off. "While I got a great haircut, I'm alive and swimming."
Pearson, principal analyst at crypto trading education firm Cracking Cryptocurrency, characterizes the crypto community here as an “intellectual orgy.” He sees himself staying in Puerto Rico for at least three years. Lately, he has been talking about a post-FTX idea: an algorithmic trading platform.
He wears a black T-shirt that reads "End Ponzinomics" as he watches the crowd on 7eight7.
“The real deal happens at the after parties,” he says, dragging a vape pen around and exhaling a column of smoke through his nose.
'True Believers'
Elsewhere, people wait for the bus at the Fairmont El San Juan hotel on the beach in Isla Verde, where the CoinAgenda crypto conference is taking place. Some revelers wear Hawaiian shirts; others have feathered top hats, a la Burning Man.
Where? The Beverly Hills neighborhood of San Juan and home to Michael Terpin, a crypto entrepreneur who moved here from Las Vegas in 2016, during the initial wave of crypto adventurers. Terpin is the CEO of Transform Ventures, a blockchain incubator.
Behind the doors, guests party like it's 2021. Try the gravlax, grilled octopus, filet mignon tartare. Try this white bean soup with truffle, frothy like a cappuccino.
Everyone seems to know each other, or at least have heard of each other.
Isaac Rivera sits by the pool. These people, he says, are "the true believers of the future and what lies ahead."
“As my brother likes to say: bear markets pay off and bull markets produce stupidity,” says Rivera, citing Pedro's market wisdom.
Still, everyone agrees that the crowd is thinner. Half the tables in the Fairmont Ballroom were empty.
Terpin is fine with that. "Quality over quantity," he says.
Sitting in the restaurant at La Casa de Roberta in San Juan, Jack Purdy, who moved to Puerto Rico earlier this year, expresses a similar sentiment.
Bear markets purge “bad actors” and crypto tourists chasing the hype, he says. Purdy works at Messari, a crypto market intelligence firm, as the director of sales for protocol services and recently bought a house in Los Paseos, San Juan, a 15-minute drive from the beach.
At Wicked Lily restaurant on Condado beach, 43-year-old Han Kao reflects on crypto with a cold Medal. He arrived from Santa Monica, California, in 2021, opened an investment firm called Sanctor Capital, and bought a house in Dorado.
“On a surface level, it feels like everything is falling apart,” says Kao, to the sound of the waves and Bruno Mars. It's not true, she says, it's not true. "DeFi", decentralized finance, "is here to stay".
Back at the Fairmont, Luke Stokes also sounds optimistic. He's been here for four years, working with crypto wallets and protocols, and he says he's not going anywhere. The ups and downs of cryptocurrencies do not worry him.
“For people who have been through that cycle so many times that it's like, uh, it'll come back,” he says.
--With assistance from Jim Wyss and Peter Eichenbaum.
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