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The strength test: What the crypto winter means for blockchain projects

The blockchain industry is not only in crisis but also going through a test of maturity and strength. The crisis is forcing the industry to cool down, get rid of speculators, and continue to focus on the most resilient and efficient business models.
The strength test: What the crypto winter means for blockchain projects
The strength test: What the crypto winter means for blockchain projects
Now we can identify the truly effective and resilient blockchain projects
Now we can identify the truly effective and resilient blockchain projects
Crises strengthen the crypto industry and make it more mature
Crises strengthen the crypto industry and make it more mature
Regulation, mass adoption, and the end of the global crisis will change the channel on crypto
Regulation, mass adoption, and the end of the global crisis will change the channel on crypto
The crypto market is in crisis. However, the industry has reached a much higher level of maturity compared to previous crypto winters. The last one was in 2018, after a year that saw a boom in ICOs, cryptocurrencies, speculation, and a surge in the popularity of blockchain. Those who survived this crisis laid the foundation for the future of the crypto market.
The beginning of the cold spell
Two factors played a role in the start of the current crypto winter: the fall of the stock market and the infamous cases of LUNA and UST.

Since 2017, when the crypto market was flooded by venture capitalists, there’s been a correlation between the crypto market and the stock market. The global crisis, inflation, and rising interest rates have affected the declines of both stocks and crypto. The extent of the decline in crypto assets is comparable to the stocks of technology companies. When the global economic situation is unstable, people avoid risky investments.

The decline in the value of major cryptocurrencies has pressured numerous cryptocurrency companies to either sell their assets or file for bankruptcy. This, in turn, has put further pressure on cryptocurrencies and created a domino effect.
Now we can identify the truly effective and resilient blockchain projects
Now we can identify the truly effective and resilient blockchain projects
Crises strengthen the crypto industry and make it more mature
Crises strengthen the crypto industry and make it more mature
Regulation, mass adoption, and the end of the global crisis will change the channel on crypto
Regulation, mass adoption, and the end of the global crisis will change the channel on crypto
What the crypto winter reveals
The crypto winter is a time to expose inefficient blockchain tools, companies with poor management, and vulnerable credit systems. The sharp decline in crypto assets has exposed vulnerabilities that will help other projects become more resilient.

For example, the 92% drop in NFT market volume may indicate that this market still needs to be regulated. Large market volumes were created by a wave of speculation. But market value is not created by hype, and investors are now concentrating on projects that can create real value. Speculative or insufficiently resilient projects no longer receive investment and exit the market. The collapse of the TerraUSD algorithmic stablecoin has made investors doubt other similar projects, whose strength (or lack thereof) the market is now actively evaluating. It’s time for all interested industry players to strengthen their products and business models.
Spring will come
At the moment, there are no fundamental reasons for the recovery of growth. Until the global economic situation changes, investor sentiment will remain bearish. However, the crypto market now has a well-developed and solid base of crisis-resistant blockchain companies and investors. According to a Bank of America survey, the appetite for risk is still intact among many investors. Ninety percent of them will buy crypto assets within the next six months, and 30% don’t intend to sell their cryptocurrencies in the same period, despite the collapse.

In the coming years, it's likely that the recovery of the crypto market, which will include real applications and well-established blockchain regulation, will help the economy emerge from the present crisis. Now it’s vital to track what company practices persist in the market and which ones successfully survive the stress test. This will be the basis for further market development.
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