The crypto market is currently facing a difficult period – the Terra collapse in May has significantly affected the whole industry, record inflation rates do not cheer up investors either. However, the history of cryptocurrencies, even though it is relatively young, has already proven that all the market sentiments are cyclical and are constantly replacing each other with incredible speed. This article will cover the question of why shall businesses continue developing their projects in the crypto industry and Web 3.0, despite the bear run and the ongoing crypto winter. ❄️
What is a bear run?
A bear run is a cryptocurrency market cycle, during which all the assets lose their price due to every cryptocurrency being more or less connected to others.
Past vs Present
Most of us definitely remember the 2018 collapse and, continuing the idea of crypto cycles, DappRadar have recently presented a comparison research between the situations of 2018 and right now. 🔍
By 2017, the crypto sector market was flooded byICOs - numerous startups and companies were using cryptocurrencies as a way for fundraising and promoting their ideas. During that period, almost any startup, containing the words “blockchain” and “crypto” in its name could have raised serious amounts of money. 💸
Dozens of ill-conceived ideas made the investors lose faith in crypto. According to DappRadar, about 90% of projects dated back to the ICO era could not survive just 6 months after launch, becoming bankrupt. 😵
That crypto winter lasted for 18 months and not only were the asset prices critically low, but also the investor interest was decreasing daily. 📉
That, however, could not stop a plenty of projects that are still keeping up to date from being launched. Such giants as Axie infinity, Aave, Curve and many others were introduced right by that time. NFT markets, the P2E games industry, the metaverse, and just Web 3.0 overall were gaining momentum preparing for the incoming bull run and succeeding afterwards. 🙌
Here is a list of companies, established during the 2017-2018 time period:
What has changed?
Even though the market is cyclical there are still several important differences.
Blockchain networks are different
During that period, we could see just a few isolated networks, the features of which were often misunderstood by the masses. Now, blockchain is an actual ecosystem with dozens of projects interacting and cooperating with each other, thus attracting millions of daily users. The development of tools, improving interoperability, speed, scalability, as well user and developer friendliness have made a huge impact on how people view the technology. 👀
The investors’ portrait is different.
By 2017-2018, crypto startups would mostly gain support from small private investor-enthusiasts. Nowadays, the scale has increased dramatically. It is no longer individuals who invest - worldwide funds and corporations are allocating millions of dollars into the development of blockchain and web 3.0 projects. 🪙
Large funds are still in search
In the past, the sector would lose any interest during the crypto winter, with investors switching to traditional assets the moment they see a slight dump. On the other hand, currently, investors are trying to save the industry by opening additional funds and investment piggy banks. As an example, by early summer, the Huobi cryptocurrency exchange had announced the creation of an investment unit with a fund of $1 billion. Crypto funds are not investing in blockchain companies alone. Every individual, even slightly connected with trading knows who Sequoia Capital are. Their portfolio currently includes such startups as StepN and the FTX crypto exchange. 💱
Cryptocurrencies are no longer illegal
Millions are now using blockchain on a regular basis: transferring money to family, buying big brand products, and even paying utility bills. Bitcoin is now officially accepted in a number of South American states, and you can pay taxes with Tether in the Swiss commune of Lugano. 🇨🇭
The blockchain industry has changed.
It is now a diverse market, ranging from DeFi tools to the art world and NFTs. Multi-million dollar Web 3.0 brands have shown significant growth. Projects like The Sandbox or Decentraland, are having partnerships with Adidas, McDonalds, Gucci and many others. 👔
In short, the cryptocurrency market in 2018 can’t be compared to what we see now. And if the crypto-skeptics could not burst “the bubble” then, they are sure to fail now. After all, most blockchain startups have changed from a smart contract and a line on a stock chart to something much more unique. 🤔
How to start?
We’ve witnessed projects failing during both the bull and the bear run. The advice remain universal:
- Show an outstanding idea that will catch the investors’ eye. The pickiness of those is on its peak right now, so it is only the unique projects that get attention. 💡
- Community is key. Weak market gives you the opportunity to focus more on uniting reliable customers that will follow your project, when the bull run starts. 🐂
- Do rational planning. Showing investors a clear plan is the thing that will definitely give you their loyalty and consequently financial support. 🤝
Starting up a project right is not just possible, but might also benefit you in certain scenarios. This doesn’t mean that any project would succeed when launched during a bear run - it is up to you whether to make investors support you or not.
Stay tuned 📻