Everybody exposed to crypto is taking a major haircut together.
Everybody, crypto and nocoiners, are affected by the broader markets.
Everybody’s watching their net worth plummet while inflation spirals.
Nowhere to run, nowhere to hide. And I’d guess it’s not getting better anytime soon.
This bloody spectacle is undoubtedly scaring away the most squeamish from the community. So congrats to whoever is still with us. We’ve deduced (correctly in my opinion) that the entirety of “cryptocurrency” is not going to simply disappear just because numbers are going down again. Zoom out, and things look spectacular.
Now we just have to survive.
First and foremost, let’s take care of everybody who’s still with us. This is our fam. We have an obligation to help everybody up. Some people are really hurting badly. Against all advice, some people cashed in their savings to speculate, and they got themselves thoroughly rekt. Check in with your community and make sure everybody is OK. If you can, offer to help the truly needy. We’re best off if we can all take advantage of what’s next together.
Max pain = max opportunity. By now everybody hopefully understands why it’s always useful to keep stablecoins around, or have access to a consistent stream of stablecoins so you can actually go shopping when this happens. Even if you are out of dry powder, the opportunity for anybody still with us is at a peak.
Builders have a freakin’ golden opportunity. When we’re at the top of the hype cycle, there’s far too many garbage projects to get any attention. In a bear market there’s way less noise for you to drop your signal. Now people are panicked, and craving distractions. If you’re not a coder but have ever thought about learning and launching your ideas, now’s the best time.
Content Creators have a similar opportunity. “Starving artists” may be particularly ill-equipped to ride out a bear market. I wouldn’t be surprised if some percentage of meme-makers already threw in the towel, which means less competition for you.
Screwball comedies thrived through the Great Depression of the 1930s because people needed an escape, and memes in the 2020s could fill the same niche. If we enter a prolonged crypto winter and you keep people laughing throughout, you’ll be well situated for the next pump.
I’ve been floating a “cash-for-memes” program, but not seeing any takers on the creator side yet (plenty of willing investors though). This suggests the artists have already left the space, they’re doing fine as it is, or they’ve all starved to death already.
Finally the OGs, or anybody who remained otherwise wealthy, may not particularly care about the most recent dip. Years ago the prospect of a crash to Bitcoin $30K and Ethereum $2K would have been a pipe dream. A lot of HODL-ers lost half their net worth and still happen to be loaded.
Now’s a good time to put this capital to work for the community instead of hoarding it. If we are in fact in a crypto winter, HODLing won’t get you anywhere. Yield farming is great, but investing in the community will bring you both wealth and power. If you invest in using your funds to grow your influence, when crypto moons next you’ll have both coins and an empire.
Offer some tokens for some work you might need done. Hire an intern to help you research. Commission some artists. Offer to invest in projects.
Finally, where should you look to ride out an extended bear market? I’m a Curve maximalist, so naturally I’m biased towards the flywheel. The price of $CRV may be in the toilet, but I care a whole lot more about making my overall quantity of $CRV tokens go up than I do about selling $CRV for dollars anytime soon.
Trading fees for $CRV within a panic remain glorious.
Where other AMMs have trouble during sudden market crashes, Curve’s v2 pools are proving exquisitely resilient. Their internal oracle is fun to watch during market dumps, given how it reacts correctly in nearly real-time. The pools represent a large opportunity for quick on the trigger arbitrage traders. They’ve also proven capable of handling large volumes of liquidity when overly-leveraged traders have nowhere else to turn.
We also note the overall health of the flywheel ecosystem amidst the crash. If the bribes started to dry up, this might be a cause for concern. Instead, bribes are through the roof.
Once again, the lion’s share of bribes come from the $FRAX/$FXS community. Users looking for good projects to buy in a dip may want to do more research into all projects that are solvent enough to keep bribing. These projects are clearly signalling they are planning for growth ahead.
If chaos is coming, the crypto community is where I’m going to place my bets.
Disclaimers! Author is also long USD, but longer flywheel, ETH, and BTC. Author plans to mostly buy ETH this week after earnings calls.