Opinion Significance of the Present Bear Market

Significance of the Present Bear Market

September 24, 2022

Anyone who is following the current state of the crypto market knows all too well that it is in a bearish period. After the summer crash and the drastic fall in prices, the digital currencies of the world cannot find their proper footing for an increase in value or market cap. Instead of a rebound, the cryptosphere saw a few failed rallies that did not push the token prices very high. These took place in the past weeks and presently, there is not even one on the radar for the coming early fall period.

The same is bad news for anyone who wishes to see an increase in market activity that comes from a bullish sentiment. But, many analysts are also pointing out that the current bear market has an even bigger significance than just its relevance for the ongoing investment strategies. According to them, much more than a simple reversal in market trends is needed to return the crypto space, including its biggest BTC token and bitcoin network, to the path of growth and development. 

Bear Cycle

It is said that every bearish cycle is, paradoxically, greeted with a sense of relief by engineers, project founders, and others working actively in the crypto domain. At the same time is a relief for so many because it frees them from the burdens of chasing new deposits, mainstream attention, and use adoption. Instead of all of that, they are all, in their own capacity, able to focus on their project and build long-term plans, both in terms of technology and their business strategy.

Here is where the stability and longevity of the projects can be found. This is also the point where ideas and business drafts become something more feasible and doable, not just for the development team, but also for the part of the operation that has to sell it to the wider world. During the bear market, not many will be buying, which is precisely the reason why it is a great time to hammer things out in relative peace.

Capital Efficiency

Among all of the ongoing initiatives, one of the main themes for the developers was a focus on the financial mechanisms and overall capital efficiency. That goes in particular for decentralized finance or DeFi, as well as other services taking place on-chain. In other words, developers are finding different ways to scalably get more leverage and liquidity from a smaller amount of collateral. The same factor could become the key competitive edge in the coming years, with platforms and systems that offer it having more of a chance of making their undertaking work. 

Right now, ventures tend to waste their capital in manners that are less than financially ideal. Here, like in esports, streaming services, and many other digital domains, a small tweak can add up to a huge difference down the line. However, the systems that can offer the same will take a lot of energy and time from the developers. But, the present period seems like an ideal time to muscle out the same capital management benefits. 

Better Front-End Systems

Besides the control and management of capital, many developers are also working on another big element of most crypto projects – user-friendliness (or the lack of it) when it comes to platforms’ UI and front end. These are, in turn, connected to whether or not crypto projects can attain a level of security and data protection that can also offer user-friendly environments. In theory, all of this is more than possible, but reality shows that ventures in the past did not easily reach a point where both bases are covered. 

Instead, crypto initiatives still struggle today to figure out how precisely they should make sure that users can easily navigate around their platforms and not make the same very vulnerable to a range of potential security breaches. In a bear market, the tricks of new users are generally slow and gradual, which makes it a good period to test out new UI solutions. The same goes for cryptocurrency security and overall stability, which can easily go sideways when modified during the peak activity times of bullish markets.

Most Important Bear Market

In many ways, the present bear market might be the most important one yet for the crypto space and its users. The previous bull market was also an unprecedented one, with prices going up starting in 2020 and ending in 2022. That period saw a range of investment pools into the cryptocurrency space, some of them wise, others not so much. 

Additionally, the same timeframe also brought about completely new and exciting areas into focus, like NFTs and other products that simply were not there back during the previous bull run. But, the next bull market will have to birth additional technological advancements and make sure that there is an audience that would want to see them in action. That will take months in the best-case scenario. In a more realistic scenario, the world will be well in 2023 before anything major like that even appears on the periphery of the radar. 

Bull Market Necessities

The cryptocurrency markets need a range of additional things to make them into a solid foundation for a new bull market. End-user products and services need to encompass many additional features and benefits, which will be there to enforce stronger adoption. The start of that massive adoption wave will have to come during the ending times of the bear market, which will also be a huge challenge. 

However, the industry needs all of these things to push the prices of tokens and capitalization of the networks up in a strong and sustainable manner. Yes, the developers have more time and less pressure to develop these. But, they will still have to do it, otherwise, the bear market will persist. Some rumors are floating that major institutions are getting ready to jump into things like DAO. But, these rumors are always there. Innovation and real change for the better will have to follow.