Every long-term position is painful, and it’s not fun to see the price collapse. It seemed like we should have done better risk management, but in hindsight it was still full. In cryptocurrencies, risk management is hard to do, as this is an early-stage venture (even BTC) in liquidity where prices have yet to be discovered.
Cryptocurrencies are still not decoupling from other risky assets this cycle. Yes, we have an opportunity to deploy more long-term capital in the space, but it’s still risky and probably at least 1.5-2x beta to Nasdaq.
So, cryptocurrencies are not going away . But this cycle will test the resilience of the protocol, a time period in which a lot of the bells and whistles die, and the era of cheap tokens that don’t generate cash flow and bad economics is coming to an end.
Cryptocurrency investors have had a great run over the past few years. Mean reversion these days, when a fund has billions to spend on a relatively small trading universe, it never ends well. Yes, crypto will transform many industries, but the narrative always leads the fundamentals .
Am I bearish? My long-term view remains the same, I’m still working on a number of Web3 projects that will provide value to this tangible and huge market. I don’t think DeFi will go away, and ideas like Web3 games and digital property (NFT) will continue to exist. I’m not bearish, I’m bullish on the early-stage teams with value, I’m seeing more Web2 talent coming in, and I’m looking forward to entry when the token price is below the seed price. Of course, I’m also ready to see more pain and losses.
In 2012, 2014 and even 2018, I felt risky because Bitcoin was basically the only game in the space. The idea of smart contracts is powerful, but there is not much practicality yet. This is not the case today, we have more thriving ecosystems (NFTs, DeFi, GameFi, DAOs).
The only keyword in this field is survival. As for now are we near the bottom? I do not know. We can always fall more than we think, so be prepared for that. Web3 is probably the most exciting new high-tech area, and investors are watching, watching when the shock is fully absorbed, and that’s when they’ll get in.
In short, cryptocurrencies are not going away . Given its broader future use cases and value unlocking, coordinated through global human and financial capital, it’s not hard to imagine this asset growing past $1.5 trillion, it’s hard not to get excited about it, but we need to play long game.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/on-the-state-of-the-crypto-market-the-only-key-word-in-this-field-is-survival/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.