Crypto winter is here. Ethereum is down 75% from its all-time highs. Trillions of dollars have been wiped out from the total crypto market cap. We’ve seen spectacular implosions like Luna, and rumors of insolvency and potential collapses of Celsius, 3AC, and others.
OpenSea volume has dried out. Liquidity has disappeared. On top of it all, the global economic outlook looks grim. The S&P500 has officially fallen into a bear market.
As someone who has been through a crypto winter before - it’s brutal. It can feel as if the world is ending. Jason Yanowitz took to Twitter to describe what an intense bear market feels like. The last crypto winter went exactly as how it was described in his tweet thread:
https://twitter.com/JasonYanowitz/status/1536365738906202112
To those who are enduring their first economic downturn, but more specifically, their first crypto winter - I understand you’re shaken up.
During the last crypto winter in 2018, Ethereum quickly plummeted 94% from ~$1400 to $80. Bitcoin fell from almost $20,000 to $3,300. Many DeFi projects disappeared. Public interest in crypto nosedived. The crypto market traded sideways for two years before showing signs of life again.
But the true believers remained. Real builders weren’t knocked off course. Unicorns like Uniswap, Polygon and so many others were founded during the last crypto winter. Many of the leaders that were marveled at for being such great beneficiaries of the last bull-run were the ones in the trenches, feeling the exact same way you do now.
https://twitter.com/cz_binance/status/1535991698035294214
Will crypto now follow its decade-old pattern of trading sideways again before erupting into a spectacular bull-run? This is impossible to answer. Ethereum could have found its bottom, gearing up for another trip to the moon. It could also crash another 90%. Any and every opinion here is nothing but a guess.
No one knows what will happen next. There is no guarantee crypto will follow the same market cycle as before. Today’s market conditions are unique, because it’s the first crypto winter that coincides with a global market downturn.
What you do next depends entirely on your circumstance. What is your level of conviction? What is your risk-tolerance? How is your financial situation? What are your goals in the space?
It would be unwise of me to offer any advice, because there is no right or wrong answer on what to do next. There is certainly not a one-sized-fits-all approach. We do have a very tight-knit community on the MV3 Discord and I invite you to join our family and speak with other like-minded individuals, many who are likely feeling the same way you do, with similar situations. Let’s all learn from one another, and grow together.
We started MV3 because we believe in the world-changing opportunities that blockchain tech empowers. Web3 is a beautiful evolution of the internet — one that democratizes ownership while unlocking creative sovereignty and user-controlled data.
We saw an opportunity to pioneer how stories are told and IP is developed, allowing our community to directly participate in the upside of what we’re building.
That, to me, is enormously exciting. We are building what we believe can become a timeless franchise - IP that not only can be translated into film & television, but gaming, theme parks, and beyond. The possibilities are endless.
From the beginning, we’ve indicated that this is a long-term project. As much as we love our degen culture, we also understand that most serious investors, and the large majority of the mainstream don’t have the appetite to speculate on memes or JPEGs. Most NFT projects are ponzis of influence. There is no actual substance, no product - no value. We are here to build timeless IP, and an important Web3 business. What happens in the short term is irrelevant to these goals.
https://twitter.com/kevinrose/status/1536361217039601667
However, there’s no secret that Ethereum plummeting in value will have a financial impact on MV3. Due to macro market conditions, we will be likely be raising a lot less money than anticipated — an important resource to build our vision. Capital allocation will become very disciplined, and our ability to hire top tier talent will be impacted.
However, we are in this for the long term. We are resilient. We have been discussing the possibility of raising capital as there is a lot of investor interest. If we deem it necessary, we will be pursuing a formal seed round to ensure we have a healthy runway to pursue our blueprint - a vision that is capital intensive.
Of course, nothing in this entry constitutes financial advice. As I mentioned above - no one has the slightest idea of what will happen next. Everything and anything is at best, an educated guess.
My conviction on blockchain tech remains as high as ever. I remain an Ethereum maxi, and in my humble opinion, I think that Ethereum, along with its vibrant developer ecosystem and upcoming merge - will become the “winning” blockchain.
Web3, in particular the open metaverse we envision will require a blockchain with incredibly high throughput, with several sidechains and L2s, low gas fees, powerful IPFS integration for NFTs, cross-chain interoperability, and more. This blockchain may need to solve the “trilemma” - a widely held belief that decentralized networks can only provide two of three important benefits - decentralization, security, and scalability. I believe Ethereum is best suited to become the blockchain required to unlock the ability for the metaverse to work smoothly.
As bullish as I am, I also know that it can get much worse before it gets better. If we are to mimic the 2018 crypto winter with a 94% collapse, that would mean Ethereum would go down to under $400. That’s perfectly possible. This is crypto. It could even get worse than that. But long term, I remain confident - and bull or bear, I’m as excited as ever to build in the Web3 space.