In May, Bitcoin (BTC) plunged 40%, Ether (ETH) sank 50%, and the crypto market went below $1 trillion for the first time since January 2021. In a bear market, the blockchain industry’s traditional recommendation is construction.
Bitcoin, Ether, and the rest of the crypto business may be suffering from economic jitters. Quantitative tightening and increasing interest rates have sparked stock and crypto market sell-offs. Terra’s ecological deconstruction, Celsius’s ramifications, and Three Arrows Capital’s $400 million liquidation losses could happen again.
2022 Market Catastrophe vs. 2018 Crypto Winter
The crypto winter of 2022 will be an indirect result of the economy as a whole, unlike the crypto winter of 2018. Decentralized finance, equities markets, and international trade have declined. Contrary to popular assumption, this bear market is occurring across numerous markets simultaneously.
VC firms and private investors have invested $30 billion in the blockchain. A third of Web3’s funding went to gaming and virtual world initiatives.
As talent exits Web2 ventures, we expect Web3 firms to succeed. These companies have cooperated with Adidas, Nike, HSBC, and Warner Bros. Blockchain-powered decentralised applications (DApp) and DeFi might take control of Web3 from a small handful of gatekeepers.
This means Web3 is close and requires a spreader. Crypto winter lets Web3 initiatives work on scalability and sustainability, making it a powerful accelerator.
Crypto Winter is a Time to Work, not Hibernate
OpenSea and Uniswap grew quickly during 2018’s crypto winter. Even if the blockchain sector was in decline, the top projects were increasing their offers.
These efforts took a long time. OpenSea’s $20 billion in NFT sales in 2021 and Uniswap’s quick expansion prove a decentralised monetary system works. DApps, DeFi, NFTs, and Web3 games have other applications.
Usefulness Drives Web3’s Growth
Due to the crypto winter, there may be more venture capital available to support new enterprises, enhancing their chances of surviving and thriving in the next boom. Existence also requires practicality. Bad, overhyped, or non-useful ventures fail. Crypto winter will separate the wheat from the chaff.
DeFi, GameFi, and NFT-related crypto efforts can benefit from on-chain lodging as they move from Web2 to Web3. Decrease overhead costs to speed expansion. Examining payment processors with high fees is legitimate, as is considering a profit-making strategy.
Web3 companies gain from payment solutions’ crypto on- and off-ramps since off-chain transactions have lower fees than on-chain ones, allowing them to expand more swiftly. Increasing conversions and income by letting consumers purchase and sell cryptos at market rates. Fully integrated on- and off-ramps can streamline crypto platforms’ payment infrastructure.
API solutions, such as on- and off-ramp platforms, are in high demand because they help organisations settle currency and crypto transactions with less risk and expense. Transparent pricing, including low exchange rates and tight conversion margins, ensures clients know precisely what they’re paying for.
As winter approaches, we should look for opportunities to engage in new, scalable infrastructure initiatives that will advance the digital asset ecosystem. Businesses with solid foundations can weather any storm, including the present crypto winter.