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This past year of events and a serious lack of financial rectitude would have any investor, retail or institutional, grappling with their internal monologues about long-term market confidence. 2022 has seen some of the crypto the most lucrative empires in the industry crumble, unicorns disappear and the worst media discourse of 2008 resurfaces.
Having more monetary value than the GDP of Costa RicaIn the last eleven months alone, we have witnessed the collapse of the Terra stablecoin, the bankruptcy of the cryptocurrency hedge fund Three Arrows Capital, and Celsius cryptocurrency lender, as well as the most prolific year for network attacks, which together amount to an estimated loss of nearly $70 billion thus far. All of this happened before the unprecedented collapse of Sam Bankman-Fried's. FTX crypto exchange and its counterpart from Alameda Research. The result of this series of jabs at the industry is, of course, a myopic view of Web3the effectiveness of .
Related: Bear With Me: 3 Ways To Capitalize During The Crypto Winter
The impact
like the word recession begins to permeate the conversation around the world, and we potentially move into the new year within a declining market, a long-term strategic view is crucial to keeping this whole Web3 thing afloat and away from the phrase ' in vain'.
Bringing a thread of solace to the situation are our lessons from the bursting of the dotcom bubble in the early 2000s, the subsequent stabilization of the tech sector, and the rise of the giants we know today, showing that promising technology it sustains itself in the long run. . While the next chapter may be an impossible challenge for most, it's worth following through. After all, bull markets raise rich people; bear markets breed the rich.
Related: Are we in a recession? This is what the economists say
The severity of the 2008 financial crisis knows no bounds. The event was arguably the most shocking of our lifetime, devastating the entire global economy. Nearly 9 million people lost their jobs, and nearly 10 million people lost their homes due to foreclosures. After four years, more than 46.5 million Americans were living in poverty. Countless people defaulted on auto loans, leaving them without a car and with incredibly low income. credit scores. These low credit scores have led to an inability to access credit, leading to financial, social and practical exclusion.
The aftermath of this recession has continued to take many lives. We cannot and should not draw parallels between that event and what is happening with cryptocurrencies and technology. we are not seeing The Lehman Moment of Cryptoyou โ a media-driven narrative. Markets in recession do not denote an economy in recession. What we are seeing is a more substantial and volatile crypto winter than before. We also see a decrease in capital investments, something that may happen sooner Y after an economic recession is declared, but more importantly we are seeing an opportunity to understand the consequences of our current frameworks and the value proposition that still remains.
Related: Why the bear market is the best thing that can happen to Web3 and cryptocurrencies
Crypto and financial parity
I am no stranger to the financial losses suffered in recent months, losses of a significant magnitude from which many will not recover. I have nothing but empathy for investors who have been failed by a nascent system lacking effective regulation. However, there is a silver lining to this declining market for the vast majority of the American population who have not yet invested in digital assets.
For those who don't physically back down from the thought of funneling more money into crypto and Web3, the downward trajectory of the market price allows many people to buy the dip wholesale and build up a portfolio of assets that may have previously lost price.
Like the racial wealth gap continues to expand As the US and minority communities look to bet on cryptocurrencies to generate alternative income, declining markets, in some respects, present an opportunity. Warren Buffet's famous quote, "being fearful when others are greedy and greedy when others are fearful," It comes to mind.
Successful startups, and even some unicorns, are born during bear markets by serving new demands created by economic circumstances. Out of the last crypto winter came the crypto unicorns Uniswap and OpenSea. Based on previous business cycles, we know that with strong use cases, market confidence, institutional backing, and eventually mass adoption will return. Historically, bear markets are shorter than bull markets, and so if you can handle the volatility long enough to stay invested in the market, this can set you apart from the rest.
Related: 'We're the first group to lose out': African-Americans hit hard by cryptocurrency crash
African Americans own less than 3% of the total wealth in the US despite representing 16% of the population. Instead of trying to fight the systemic barriers of the traditional financial system that has been around for centuries, investing in digital assets gives us the opportunity to blaze our own trail, with access to markets at our fingertips with a minimum threshold of $5 investment. or $10. The biggest challenge we still face in this regard is education. the 2022 Black Investor Survey de Ariel-Schwab found that 29% of black Americans who invested in something they didn't fully understand did so because it seemed like a "sure deal.โ This is how you lose money, not earn it. As stocks and currencies continue to plummet, take some time to read, watch, and listen.
Now is the time to look beyond traditional wealth generation systems to reduce wealth disparity and level the playing field in the US and beyond. Probably the next unicorn, unrivaled digital asset or exclusive NFT collection is being built for public trading during this bear market. Imagine losing the opportunity to invest in it before the next guaranteed bull run.
TLDR: Crypto investment is chess, not checkers. And guess what? It's your move.
