It's because once people put their money into a cryptocurrency they have a stake in not seeing it fail. The more they have in the cryptocurrency, the more they need it to retain value.
If your life savings were at risk of becoming worthless, you would also be defending cryptocurrencies as rabidly as these people.
"As a market practitioner of many decades" -- I like that phrase.
In the first phase, it was purely retail speculation.
However, we are now entering into a new phase. ETFs are being issued. This makes it easier for institutional money to buy. Also scary. I'm not concerned about "fast money" (hedge funds), but rather "slow money" like pension funds.
Final phase: I notice that investment banks are slowly beginning to open cryptocurrency trading desks. They may trade directly, but mostly they are interested in derivatives. That is my biggest fear. How is that any different than CDS on MBS/ABS/CDO? (Credit default swap on sub-prime mortgage bonds) In short: The underlying was junk loans. Derivs on crypto feels like the same wolf, but in a different skin!
All crypto posts poke the hornets nest of angry engineers here at HN because (I think) crypto is now 90% a finance/economic/social phenomenon. There is little new to say from a technical perspective but people who are super smart in one field think it should generalize to a vaguely adjacent one. I’ve spent quite a lot of time on this stuff and the potential of Defi is massive compared to 99% of trad fintech startups but its impossible to even keep up with.
As a market practitioner of many decades, I must say I have never witness this level of froth and delusion before.
I'm studying it with great interest (and a touch of disdain about my fellow humans unbounded rationality/irrational exuberance about cryptos)