Tomorrow Is a Matter of Choice: Learn How to Amplify Your Business Amid the Bear Market
08.09.2022 | 4 min read
"It sucks, but," is one of the most frequently heard phrases in cryptocurrency sector discussions about the current bear market. It was no different with Rayan Rodenbaugh of TrueFi, with whom we could exchange a few words at the ETHWarsaw conference. Although the current crypto winter must be taken with full seriousness, history shows that in crises there is always a group of companies that do well. The question is, what does it take to be in this exclusive group?
This year, the value of cryptocurrencies has dropped by $2 trillion since 2021, when they were at the top of a huge rally. Bitcoin, the biggest digital currency in the world, is down 70% from its all-time high in November, when it was worth almost $69,000. Because of this, many experts have warned of a long-lasting bear market called "crypto winter."
Yet Another Bear Market, Though It's Different
A bear market is when the prices of assets go down for a long time. Most of the time, bear markets are marked by a lot of market uncertainty and pessimism. But a lot of people think this crisis is different from any other in the history of digital currencies. Even though cryptocurrencies fell in 2018 after a big rise in 2017, the current crash is a result of several economic factors like soaring inflation, which led to raise interest rates.
Another difference is that from 2020 onwards, a lot of things were built on yield-based DeFi solutions, which are blockchain-based financial products. It turned out that there was a lot of undercollateralized lending as credit risks. When market prices went down in the second quarter of this year, funds, lenders, and other people had no choice but to sell.
Last but not least, it's important to remember shocking events like the crash of Terra Luna, the coin that was used as a protocol token to make stablecoins on the Terra blockchain less volatile. Most people didn't expect the Terra blockchain and UST stablecoin to fail, which sent shockwaves through the crypto industry.
Grayscale Investments, a company that manages digital assets, says that the bear market could last for another six months, or until about March 2023. The researchers also said that from peak to trough, a crypto market cycle lasts about 4 years. As of July 12, the current cycle, which started in 2020, had been going for about 1,198 days. Bitcoin took the longest time (952 days) to reach its peak compared to previous cycles. This suggests that the next rally to record highs will take even longer.
"It Sucks, But"
"This is officially my second bear market, and the truth is that it sucks. When you look at the bear market, you can see that it was mostly caused by what happened on the credit market or made worse by it. Whether the result is the Terra Luna or the Arrow situation. So, in that sense, we've been very lucky that this process hasn't led to any defaults so far. Sadly, many of our competitors have had to deal with huge losses,” said the head of business development at TrueFi, Ryan Rodenbaugh.
He added that during this bear market, DeFi companies can point to that track record as a way to get more business and continue to build trust with lenders.
In a crisis, it's not good for investors, markets, or people who want to develop their products in DeFi to make decisions based on fear and uncertainty. This is a common occurance especially when investors don't know enough about cryptocurrencies. This means that learning from people who have been through cycles before and figuring out these mistakes ahead of time could save both money and emotional stress.
Needless to say, panic is always a bad thing. When it comes to trading and investing, panic selling is when a large number of people sell a cryptocurrency out of fear, rumor, or a general overreaction instead of a well-thought-out plan. Investing in a cryptocurrency is a decision that should not be based on how you feel, but on what you know to be true. Still, it's important to think about how to come out of a crisis stronger.
How to Accelerate Your Business in a Time of Crisis
History shows that even when the economy is in a bad spot or going through a recession, a small number of companies can do well and even become unicorns. The question worth a million dollars is: What are the companies doing to do well while everyone else fails? How can specific business opportunities that lead to growth be found? All of this might come down to a completely new strategy: going on the growth offensive instead of just letting bad economic news roll off your back.
If you want to learn how to grow your company during a crisis, tune in for the leatest 10C Voices episode. Our 10Clouds and Entrepreneur Sales Institute experts talked about:
- Business management amid crisis
- Lack of talent
- How important it is to find a product
- Getting money during the economic crisis
- Getting into and staying in the market
- Making more money