The face of crypto —along with its prices— has always changed. Post-Covid new All-Time-Highs were reached due to multiple global factors. Once crypto became easily accessible on exchanges such as Coinbase, Robinhood, and Kraken and with a majority of individuals finding themselves locked in quarantine, we saw the rise that led to the crypto bull market of 2021.

Anyone could make a profit, whether they knew what they were doing or were just impulse buying. A bull market makes everyone feel like a genius. There were thousands to be made off buying and flipping NFTs. Yield-bearing protocols were lucrative and toted promises that led influencers to proclaim they were “retiring”. Tokens with no utility and silly names popped up and would 100x in value. Teams forming protocols found themselves either treated like beloved rockstars or chased by mob-like consumers.

It was chaos, profitable chaos, but chaos nonetheless.

George Goodman said it best when he said this:

“We are all at a wonderful ball where the champagne sparkles in every glass and soft laughter falls upon the summer air. We know, by the rules, that at some moment, the Black Horseman will come shattering through the great terrace doors, wreaking vengeance and scattering the survivors.

Those who leave early are saved, but the ball is so splendid no one wants to leave while there is still time, so that everyone keeps asking, ‘What time is it? What time is it?’ But none of the clocks have any hands.” — Adam Smith (pseudonym for George Goodman)

In simple terms, George Goodman’s quote points out, when everything is good, we continue to indulge, even though we know the party cannot last and that bad things are coming, we stay until it is too late to leave.

The Good

Crypto introduced the idea of investing to people who had never really taken an interest in doing anything beyond adding money to their savings account or an IRA. This was a good thing, people wanted to have a personal, hands-on approach to managing their own finances.

It seemed easy for people new to crypto, they simply signed up for an exchange, deposited some money into their accounts, bought a token, and watched it go up.

This made people interested in finding out what other tokens or crypto-related things existed. That is when they heard they needed to go off the exchange to get into where crypto really is. As new investors who had no experience in previous crypto-losses or bear markets poured into Decentralized Finance, it seems like a buffet of only good things.

As the pandemic, wars, and prices rose, it was assumed that crypto would be a shelter against the storm.

The Markets

There is a difference between stock value and true value. For instance, a company’s stock price shows its market value, but the real value is in the revenue the company generates. Silver has a paper price and then its real value; getting a paper receipt for silver is easy, demand the physical silver and you will see a delay in receiving it.

Crypto is no different, there is the price value of the token, versus the true value of the protocol it represents.

For instance, we see more and more companies getting involved in accepting crypto-based payments, and in the technology overall. Despite their involvement, the token price is not moving, this is because they are investing directly in the networks, and are not buying the tokens. It can give the appearance of a failing network, when in fact it is just the token price that is affected.

The Sentiment

Sentiment can affect prices. When the sentiment is positive and bullish, prices go up. When the sentiment is fearful and bearish, prices go down.

“With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future.” — Carlos Slim Helu

It is crucial to look into the past and analyze it. And even though people do not like to compare crypto and stocks, we need to compare at least as far as social mood and understanding human behavior for investing. It does not matter how much time has passed or technology has evolved, human emotion is the same as it was thousands of years ago. Humans have always had fear and excitement. Humans have always placed value on things based on their individual desires, wants, or needs.

So What is the Solution?

I personally look at the fact major companies such as Disney, Stripe, Coca-Cola, Reddit, and Starbucks have invested in Polygon Network. This shows a corporate interest in Web3 development, blockchain technology, and Metaverses. We know these things for a fact are going to grow and progress, but this growth is not being placed into the tokens, it is being put into the technology.

We are in a bear market. We faced a pandemic, there is global unrest, inflation, and more. Stock markets are hurting, real estate markets are hurting the crypto market is hurting. Food prices are high with some foods being removed from the market altogether. Some people run to cash, but lose their purchasing power with cash.

Everything is down, everything is being affected. It will never be summer all the time just like it will never be winter all the time. During winter, farmers store up their food and live frugally, in spring farmers plant and grow.

It is a difficult time in human history, and we are all fighting our way through this together. It is my personal feeling that a majority of the protocols and crypto-related businesses that were successful in 2021 may not last. Because most start-ups do not make it beyond their first few years. It has always been this way with businesses since before crypto came on the scene in 2008.

Crypto is not dead, but it can and will have to change forms. Tokens will need more intrinsic or real-world value attached to them if they want people to invest in them. Businesses will more than likely be investing in having dApps with their own personal tokenization for their user base.

Pharmaceutical companies such as Pfizer, Amgen, and Sanofi sought to use blockchain technology for the purpose of tracing the origins of pharmaceuticals, transportation, and procurement of materials.

What we will see decrease is more than likely what has already taken place — the general public pumping funds into volatile yield-bearing protocols, valueless NFTs, and meme tokens.

Conclusion

Just like the top ten coins of 2018 are not the same top ten of today, crypto has always been in a state of change. There has always been risk involved, and this is why risk management is so important. Investing is about hoping for the best and preparing for the worst.

There are no guarantees in anything, and no one has a crystal ball to predict the future. Sometimes people are right and sometimes they get it wrong. I personally believe in this space for the technology, and for the original purpose behind why crypto was developed. I feel that prices are volatile, and people should take great care if they enter into crypto to try and become rich because they stand to lose more than to gain.

But there are those of us who want an alternative to the current financial system and who want privacy like in tokens such as Monero, where the price does not matter so much as having a barter currency for trades. There are those of us who are investing directly in the tech that we believe in.

For some of us, it is not a fad or a way to “get rich quick”, it is a hope for a different form that allows the people to directly invest in businesses and businesses to be funded by the people instead of the banks.

Continue to study, grow in knowledge, and understand your real value. It does not matter your age, your job, or your education, the real value lies in the skills and mindset you chose to develop. It is our human nature to endure and adapt through hard times, and the more we know, the easier it will be to trudge through this period in history.

As always, you are your biggest asset, and your mind is your greatest tool.