Introduction
In the past year, the cryptocurrency market experienced a rapid decline that turned into a bear market. The last time we saw such a steep drop in prices was around 2017-2018, when Bitcoin experienced a major correction after its meteoric rise from $1,000 to $21,000, and back down to $3,000. At the time, many people were convinced that Bitcoin was dead. It seemed like nothing could save it from going extinct. And yet here we are today: Bitcoin is thriving and has recovered from this crash even better than before!
People tend to feel frustrated and pessimistic during a crypto bear market. They often feel overwhelmed by the rapidly declining prices and fear that their investments will never recover. Most people experience a sense of disappointment and anxiety as they watch their crypto assets plummet in value. Many investors also experience a feeling of helplessness as they struggle to determine what steps to take to protect their investments while the bear market persists.
Since its inception, the Web3 and DeFi sectors have experienced rapid growth.
Since its inception, the Web3 and DeFi sectors have experienced rapid growth. This is evident in the number of projects being developed to build a decentralized internet, as well as the increasing number of innovative companies using cryptocurrency for their payments. The crypto industry has been booming for quite some time now, but it’s still in its infancy with many more opportunities on the horizon.
Bull markets rely on hype.
Last year’s bull market was likely unsustainable. It was more a result of hype and the explosion of new investors, some less informed than others, than the strength of the underlying projects.
The bear market is preferable to a bubble because it will help to create stronger fundamentals for the future.
This will lead to six benefits for web3 and DeFi:
1. Web3 projects will have to become more realistic about their goals and timelines. It is easy for developers to get carried away with the hype surrounding blockchain technology, but it’s important for everyone to remember that it’s still very early days.
2. The bear market will help identify scams and weak projects; this will lead to better vetting of new projects in the future.
3. The recession will allow investors to focus on fundamentals and differentiate between valuable projects and empty promises by focusing on factors such as user growth, adoption rates, developer activity, token economics etc.
4. The bear market will force projects to focus on building real value, rather than just hype.
5. The bear market will lead to consolidation; the weak projects will fall by the wayside, while strong projects survive and thrive.
6. The bear market will help investors find diamonds in the rough; there are still many good projects that have been unfairly punished by FUD or bad press during this downturn.
The bear market is necessary for a healthy industry; it allows developers time to work on product rather than marketing and it gives investors more time to properly vet new projects before investing in them.
A bear market is preferable to a bubble.
A “bubble” is when the price of an asset rises in a way that can’t be explained by fundamentals, like the public getting excited about something new or simply speculation on future appreciation of value. Bubbles are unpredictable and unsustainable—they occur when investors are caught up in the moment and place too much importance on short-term gains instead of long-term planning. Bubbles can lead to massive losses as they eventually pop, causing significant disruption in almost every industry they touch.
A bear market, on the other hand, is predictable and sustainable—it occurs when investors sell off assets because they think they are overvalued at current prices (and/or interest rates). Bear markets allow us to focus on building the future without worrying about whether there will be enough capital available for us to get there—in fact, it gives us time for realignment if we need it! This means we can focus more clearly than ever before: no more blind chasing after quick gains; no more panicking when times seem uncertain; no more worrying about whether everything will fall apart if someone pulls out early from an ICO or DeFi smart contract—instead we can enjoy what really matters most: building products that users love using every day!
The bear market gives us a chance to realign our focus on building the future, rather than chasing quick gains.
The bear market gives us a chance to realign our focus on building the future, rather than chasing quick gains.
This is an important period for the crypto ecosystem because it allows for reflection and introspection. In this moment, we need to be active participants in the bear market by reflecting on our progress together.
It’s also an opportunity for detached reflection and active participation.
- Reduce your portfolio’s risk exposure.
- Don’t panic sell.
- Don’t be afraid to buy.
- Don’t be afraid to sell.
- Don’t be afraid to hold—if you’re not comfortable selling, don’t do it! What matters is that you’re confident in the decisions you make with regard to your portfolio and its composition; if you are, then there’s no reason for concern about holding a position through a downturn or downturns in general because these things happen from time-to-time even if we don’t see them coming in advance.
We must embrace the bear market as a time to reflect on Web3’s progress together and build from there
Now is an excellent time to reflect on the state of Web3, and how we can improve it. The bear market has been brutal for many folks in the community, but it’s also a great opportunity for us to take stock of where we’ve been, where we are now and where we want to go next.
This isn’t about sitting back and waiting for the market to recover — because that might not happen any time soon. Instead, let’s use this downturn as a chance to focus on what needs improvement within our own projects and communities before we continue down this path together.
Conclusion
The bear market is not a bad thing and it’s not the end of the world. We have to be patient and wait for better days, because they are coming as long as we stick with our vision and continue working hard every day. The bear market lets us focus on building the future rather than chasing quick gains, which will only cause more problems down the road if left unchecked.
