Binance founder Changpeng Zhao was this week sentenced to four months in an American prison for failing to take adequate measures against cybercriminals and terrorist groups on his exchange. For some crypto enthusiasts, there may yet be a silver lining to this sad episode. As crypto goes from being a buccaneering innovator in finance to one of the grown-ups in the room, the increased scrutiny from regulators will weed out some bad apples, in turn enabling a cleaned-up sector to move forward.

However, the incident underscores a tension at the heart of crypto. Created by libertarians angry at the bank bailouts that followed the 2008 global financial crisis, it was originally intended as a new form of money that would operate outside the formal system. Along with new dark web spaces that sprang up around that time, such as Silk Road, its whole purpose was to create an autonomous space where a new economy could emerge. If a few bad apples used it, that was a price worth paying for sticking it to the man. After all, the 2008 crash had revealed plenty of villains in the regulated banking sector.

But that anarchist origin sits uneasily with the recent push to turn crypto into yet another branch of the financial sector, replete with regulations and oversight by the authorities. Whether this is maturation or betrayal depends on one’s point of view. What seems less contestable is that it’s no longer clear just what crypto’s purpose is — or indeed whether it still has one.

What’s more, events this week point to an even bigger problem facing crypto than an identity crisis. For those of us who’ve only ever seen Bitcoin as an ingenious hack of central bank policy, one designed to exploit and expose the tactic of preserving asset values by printing money, the end of the cheap money era was always going to spell the end of the crypto boom.

Jerome Powell has repeatedly intimated that the implicit assurance that the central bank will rescue asset prices from a rapid fall with cheap money, what’s known as the “Fed put”, is still in place. But to judge from the activity in bond markets, where investors keep demanding higher interest rates in order to lend to governments, the markets have begun losing faith in him. There is an ongoing tug of war between the Fed and the bond vigilantes who doubt its competence, as revealed at this week’s meeting when Powell’s message that the central bank wouldn’t hike rates triggered a market rally that then reversed. But in its battle with inflation, the Fed keeps losing ground.

As is always the case with living history, we’ll only know with hindsight when the end of the cheap money era has come. But it’s a good bet that if it hasn’t done so already, it soon will. Since last year, it’s been growing apparent that the tightening of central bank policies, only ever intended to be a temporary pause in the upward march of markets, may become permanent. Inflation is turning out to be stickier than usual, and bond yields keep rising.

Bitcoin’s value ultimately depended on the same cheap money that supported stocks and bonds this last decade and a half. As the curtain slowly falls on that era, it seems the end of the crypto boom may soon be upon us. Bitcoin’s 20% drop since its January peak may be just a pause before the next surge, or it may be the beginning of the end. But it’s looking increasingly likely that the end is coming.

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