The bear market is alive and well it seems. This is a situation that might last a while. After all, markets do what they do. Rarely is there any logic to them.
While markets are usually an indication of very little, the real money tells the story. In this realm, this is Venture Capital and assortment of other funding mechanisms. The question is what is going on in this realm?
Here is where we might be able to separate cryptocurrency's future from the fluff. While the FUDsters would have us believe that cryptocurrency has no value, we see billions flowing in that could tell a different story.
So who do we believe?
Marc Andreeson Knows
Silicon Valley, for all its ills, does have some of the most insightful people in the world. We cannot tell if it is their ability to predict the future or create it. Either way, they tend to know where things are going.
For this reason, listening to someone like Marc Andressson is a good idea.
Perhaps you heard of this famous quote:
The main partner in Andreeson-Horowitz, one of the leading Tech VC firms appears to be still going all in regardless of the setback in the cryptocurrency markets.
That is a lot of change to be laying out in a bear market. The key to understand is guys like this do not look at bulls or bears. Market conditions are secondary to them. They are long term investors meaning that a couple years swing in the markets means nothing.
When we consider the fact that most of their VC contracts are 8 years, this show the timeline they are operating upon.
Imagine if we adopted that same mindset ourselves.
The Future Is In Development
One thing about Venture Capital money, it is not speculation on market activity. Funding of this nature is about finding business ideas and developing them. It is simply how they operate. In short, is the market speculation before something goes public for people to speculate upon.
Cryptocurrency is a hot item. We saw a record in VC Capital flow in during 2021. This totaled a hefty sum of $30 billion.
That will pay for a lot of developers.
Here is where a bit of common sense comes in. We all know the VC game is high risk. There is no guarantee that these projects will work out. In fact, we know many will not. However, there are going to be some that do.
This is where we see the future of the industry.
Since we do not know which projects are going to succeed, we have to count on the fact that some are. When we see $30 billion roll in from Venture Capital Firms in a single year, there is a lot more than just hype.
Ultimately, Web 3.0 is attracting this money. These technology investors see the potential of the next generation Internet. It is something they are not going to miss out on.
Considering that many of these firms made their money from investments in earlier Internet projects, it is a safe bet they understand where things are going. Even if they are creating it, we might as well follow suit.
Ignore Markets
This is why the smart money ignores the markets. We know this realm is filled with fools. This is evident by how many are parted from their money.
We are part of the formation of an entirely new industry. Actually, if we think about it, what is coming is going to penetrate many different industries. The digital realm is only expanding. Since cryptocurrency is a central part of that evolution, it stands to reason things will be more advanced a few years from now. After all, we are much further along than just two years ago.
Markets go up, and they come down. Development, on the other hand, that is steady. When looking to the future, it is best to follow those projects that are implementing their vision.
Here is where markets often get it wrong.
Cryptocurrency gives us the opportunity to partake in successful development without being part of the VC world. Of course, this is a benefit since most of us are banned from that realm due to the inability to be an Accredited Investor. With different cryptocurrency projects, we can partake.
Of course, that means being able to weather the ups and downs that come with waiting for development to take place.
For this reason, do like the VC in Silicon Valley: put your money down and then come back in 7-8 years.
By then the industry will really be something to behold.
Article by @taskmaster4450le.
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that's like millions of years in crypto :)
Kind of :)
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It is true, although the crypto market is currently falling, there are many signs that indicate that it will continue to grow in the coming years; we just need to remain patient so as not to fall into the panic that plagues most traders and retail investors in the market.
I think the essential thing here is to think long term and act smartly; Of course, the level of capital or liquidity that we have available will also greatly influence our mentality and action, but what we must be very clear about is that this bear market will become at some point in a bullish market; and that has no discussion.
Excellent post. Greetings.
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I'm starting to think that artificially inflated valuations are getting wrecked more than anything else. For example, BTC going from $20k to $60k to $30k to $70k to $30k in 1-3 month swings seems less like "crypto be crazy volatile, yo!" and more like the weirdness an abundance of COVID stimulus money introduces into organize value growth.
Everyone gets excited about "going to the moon" with this, that or the other coin, but there's only one way values go up or down: demand. BTC exploded in value because gobs of money flooded into it all at once before it was balanced by profit-taking. In other words, many coins were ramped up in value by a surge in buy-ins that wasn't tied to fundamentals. Wherever you believe that money came from, if the original source of these cash mountains flips the switch, them pulling out causes massive crypto slumps like we're currently experiencing. (In addition to events like Terra/Luna imploding)
Getting back to your post, I'd argue that many crypto coins are recovering from fake valuations propped up by a flood of excess money to prices more in line with where they would have been sans COVID. When zooming out, they're well above where they were 1-2 years ago which tells me that underneath it all, you're correct: There's still more interest going into crypto than out of it, but some particularly large players are messing with valuations in a way that can panic those caught unawares.
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VCs tend to go with the trend and I don't really think they are interested in investing during a bear market. I am just wondering how many of them understand the crypto market and which projects are sustainable.
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Billions would still keep flowing because people only realise more and more that cryptocurrency is the real deal with an ever increasing value.
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Usually we hope to see the dollar amount right away in form of crypto. Indeed it goes straight to development where it will generate steady flow down the line.
This is a slow and steady game plan with crypto.
Having the eyes to percolate the blockchain effect will be priceless.
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We thought everything was exponential in here, sir, time flowing falls into this category as well...
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For sure. These guys don't live off crypto and don't fall into the lambo boys category either.
It takes time to build wealth, but unfortunately the majority "doesn't have time" to do that. Instant gratification is what's killing this society.
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