According to a published report , the number of global crypto users increased by 178% last year to reach nearly 300 million people. Adoption signals partially played a role in this trend. While Morgan Stanley offers Bitcoin (BTC) to wealthy clients, El Salvador has declared the largest crypto by market cap as the official currency. The revival of NFT projects and new use cases for blockchain integration such as gaming have all led new investors to the crypto ecosystem.
Bitcoin and crypto industry continues to lose
As we reported on Kriptokoin.com, the market sentiment has been down this year, partly due to the collapse of LUNA and UST. Also, amid the Federal Reserve’s rate hikes to soften inflation, Bitcoin and Ethereum are trading similarly to risky tech stocks. While crypto supporters see Bitcoin as a safe haven to avoid inflation and macro effects, Bitcoin has not been able to provide it. BTC and ETH are down about 30.37% and 37.54% in the past month. Altcoins Solana and Avalanche are down about 81.17 percent and 80.75% from their all-time highs. When we look at the crypto money markets, it is seen that it lost 600 billion dollars last month.
Investors who have turned to cryptocurrencies over the past two years may not be accustomed to its volatile performance at times. However, this is nothing new for long-time crypto investors. In 2020, Bitcoin lost nearly 50 percent of its value to $4,000 in two days amid pandemic fears. But 13 months later it was up to $64,000.
Price movements do not reflect the long-term potential of the industry
Garrette David, co-founder of Atomic Form, a Web3 startup, previously said, “This is what you expect from crypto. “Sometimes you rise 100 floors and sometimes you perish.” Still, executives predict that adoption will continue. Coinbase CEO Brian Armstrong said that over a billion people will use cryptocurrency in the next ten years. Comparing the growth of the market to the early days of the internet, Armstrong said:
My guess is that in 10 to 20 years, we will see a significant portion of GDP take place in the crypto economy.
According to experts, cryptocurrency price movements do not reflect the long-term potential of the industry. So what should a less experienced investor do in a market? Executives from Dragonfly Capital, Volt Capital and Archetype investment companies shared their views on the subject. According to Dragonfly Capital Managing Partner Haseeb Qureshi, users should take the time to read the whitepapers. For Unititated, a whitepaper is a document submitted by developers that details the purpose and technology behind their offering. Speaking on a panel at the Permissionless conference on Tuesday, Qureshi said:
The great thing about bear markets is that you can sleep at night. It’s not that crazy and you don’t get that much FOMO. You can actually read the documentation and whitepapers.
You should know more about the industry
Dragonfly recently closed its third crypto fund at $650M. Limited partners of the fund include Sequoia China, Tiger Global, KKR, Invesco and others. Soona Ahmaz, partner at Volt Capital, advises users to build their reputation and learn more about the industry while the markets are scared. Ahmaz stated at the conference:
You sit in the front row to see what really works and what doesn’t.
Last year Volt announced a $10 million fund for early-stage crypto startups and stock games at blockchain research firm Nansen. Archetype founder Ash Egan told Insider that new investors should do more research and concentrate more on crypto during the bear market. In April, the firm announced plans to close a $150 million fund. Egan explained his views as follows:
I think there are a lot of tourists pouring capital there. It takes years to build something effective and that’s why I think you need to be in it 24/7. And I think you just have to dig a few times deeper.
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