Crypto Potential and Possibilities in the Market DownturnJune 4, 2022
During the previous weeks, a 50 percent drawdown of prices in the crypto markets took place. Expectedly, the downturn made many dreams collapse, covering both the developer space and the investor designs. When that took place, the public sentiment on crypto took a very predictable downturn as well. The same happens every couple of years, following the general ebb and flow of the markets. When these are booming, the public will take notice. That will usually involve people who are not esports players, tech enthusiasts, or anyone of that nature. Instead, it will focus on the everyday individuals who previously had nothing to do with crypto or even actively avoided it.
But, with the prices marching up and the news machine following it every step of the way, the attention regularly starts to rise. This gives way to a form of FOMO that leads so many to invest some money in this space and hope that it will turn into a small (or big) fortune. But then, as it happened a month ago once more, the markets collapsed. The crypto price bubble bursts and things slide towards zero, at least in the eyes of those newcomer investors. Quickly panic appears as well and selloff becomes even stepper. However, others have decided long ago to hold out and now is no different. Not only that, but many others are willing and able to make profits even when the markets are in a slump. Just like when the prices are marching up, the crypto winter also holds the potential for making money, both crypto and fiat kinds.
The drop in crypto value has not occurred in a vacuum. Instead, it coincided – or was partially triggered by a range of movements in the traditional stock market. In it, blue-chip stocks fell like stones as well. That includes companies like Netflix and Meta (former Facebook) which lost nearly as much as bitcoin’s BTC token in terms of USD value. But, the focus of the public and the niche press quickly moved exclusively to crypto. That is why crypto skeptic blogs, podcasts, and other outlets are generating so much attention in recent periods. The cryptosphere has welcomed much of that criticism if it managed to bring something constructive to the table.
For example, the issues related to the implosion of the Terra blockchain and its derivatives are more than open to improvements. Having critics is a good thing for almost any ecosystem, as it brings in a diverse range of views on a particular subject inside of a community that might be otherwise oblivious to them. But, the problem is that much of that criticism is not based on any actual fact and instead will generate nothing but nonsense that will also end with people losing money. The ongoing plunge in prices will add salt to the wound. Yet, at this very moment, people and institutions are still generating value from cryptocurrencies. A key element to that success is the process of playing beyond the present moment and focusing on the long-term potential in a particular crypto area.
There is no doubt that the coming period is going to be very rough for the crypto market. No one can tell how long it will last or where the bottom will be found. It could be already in and it could be that the markets are nowhere near it. Many in the crypto community have seen this cycle several times so far. There are variations in the way it shows itself but the essence remains the same. Each time, the same expected behaviors come about as crypto mania gives way to a cruel anti-crypto sentiment. This does not change the fact that the Crypto winter is here, for better or worse.
That is a key part of any substantially enduring calculation that could generate money in the future. Betting that the present drop is just a blip in the overall bull market is simply not correct. This kind of narrative is a mirror image of the notion that the cryptosphere is on its deathbed. Both skew the real situation to its extremes and thus rob anyone of the ability to generate value from the actual market conditions.
No Day Trading
Another huge move anyone can make in a strong bear market is to just drop any notion of day trading. Any bet on the location of the bottom is a shot in the dark. Making those types of trades at the present moment is nothing but playing a casino game and having a feeling where the dice will land. What should investors do instead is to focus on the actual usability of products and the communities that support them? Here is where the long-term potential lies and it will survive the bear market.
Also, this period should include a lot of learning about a range of projects that could make it. That means no more blind shots on things that are harnessing the power of buzzwords. Projects like that will almost certainly end up on the losing side of the Crypto winter period. There is a strong possibility that even projects that are on a more sound footing will lose out in the end. But, with some level of information and a strong foundation in real-world value, bets in the bear market could become a basis for some huge profits later on.
Finally, the most important factor in the survivability of a bear market is to just stick around. The cyclical nature of the market means that this is easier said than done. Without the ability to pump money in endlessly, investors can stay dry with investments locked in on higher positions. That includes a lot of idle waiting. However, as long as the person or an organization does not fade out from the market, there is a rebound potential. So far, this potential manifested itself very prominently several times over. There is no reason to think that it will not do the same thing this time around as well.