The Gift of the Bear Market
June 14, 2022
By Robyn Vey, Head of Marketing, Aventus
The crypto industry has taken a serious hit recently. Triggered by challenging macroeconomic conditions and rising inflation, and exacerbated by the collapse of stablecoin TerraUSD and Luna, its related token, billions of dollars of value have been wiped off the crypto market within just a few weeks.
But it was a long time coming – and seriously needed. The last few years, a number of players in the industry were increasingly relying on snowballing media hype to grow their communities without actually focusing on strong fundamentals. As a result, the crypto market became somewhat reckless.
So this correction is necessary for the overall health of the industry as a whole. Think of it like medicine: hard to swallow in the short term, but good for you in the long term. It eradicates the projects with poor fundamentals, who were relying on hype and a bloated market to carry them along – making space for those who are there for the right reasons: those with a considered approach, robust fundamentals and a focus on creating developing technology that can help businesses in the real world.
And we’re not the only ones seeing this opportunity. Abigail Johnson, CEO of Fidelity Investments, shares our philosophy: “If you believe that the fundamentals of a long-term case are really strong when everybody else is dipping [out], that’s the time to double down and go extra hard into it,” she said recently.
This is exactly what we’ve seen in the past with technological innovation – look at the dot com bubble as an example. Following an explosion in the use and adoption of the internet, excessive speculation of Internet-related companies in the late 90s eventually led to an inevitable crash. This correction was exactly what Web 2 needed to put itself back on a trajectory of strong, sustainable growth – and Web 3 is no different.
When we emerge from this winter, the players left will be those who have historically taken their time to focus on developing their technology. They will be able to focus on building though this period, without necessarily having to worry about the price of their token – because absolutely everything is down right now. And the emerging landscape will be much quieter – where their voices, which may have until now been drowned out by the incredibly high volume of noise in the market, will finally be heard.