Waiting Out A Bear Market: The Journey and Destination
Whereas bull markets are enraged with hype, excitement, and optimism, bear markets are dreaded for far more than the negative price actions the charts display. Fear, uncertainty, doubt — these words don’t merely encapsulate the act of spreading negativity and misinformation but are also emotions many in the industry feel.
Surely enough, when projects fail left and right, one begins to wonder about the future of the ones they’re invested in. As unpleasant as this market is, you might be pleasantly surprised to find that not all is doom and gloom.
What if we could redirect our focus towards productive acts that could benefit ourselves and the industry? Do calm, blue and sunny days lie behind the stormy clouds?
Let’s start by assessing the effect that bear markets have on various projects and whether or not it is a cause for concern. The fundamental principles of economics tell us that when we witness such stepbacks, investor risk appetite diminishes, causing many to lose faith in more experimental projects, instead focusing more on reliable and time-tested protocols.
The same thing can be said for projects that are based solely on the trending ideas and concepts of the preceding bull run, as they do not offer or introduce anything particularly new or innovative. We can observe this in the non-utility-rich NFT projects that the market was riddled with during the past two years and how their trading volume continues to touch all-time lows day after day.
However, when you take a look at the projects that have survived multiple bear markets, you’ll soon spot a pattern found across almost all of them. Projects that offer a legitimate use case have a significantly higher tendency to survive crypto winters than their speculative counterparts. It helps that most of these projects also have strong and dedicated communities (which we will get into later) who contribute to their projects at every opportunity they get.
This highlights the importance of investing in quality projects, not only for personal gain but also to contribute to a healthier ecosystem within the industry. The more reasonable and useful projects we have, the higher the rate of adoption in the wider world. Despite being over a decade old, the technology is still misunderstood by the vast majority of the global population, and opportunistic projects further add fuel to that fire.
Those with the time and energy to spare or those simply looking for a few distractions from the charts may find these proactive approaches helpful during this bear market.
Actively participating in the governance process of a project is a great way to start. As mentioned above, projects with a dedicated community have endured multiple bear markets, and this one is not an exception. Most projects nowadays implement DAOs for decentralization and governance due to their simplicity and accessibility, making them very potent for everything from security to the decision-making process.
In order to ensure that one’s contributions to the DAO are effective, there are a few things an individual can do to increase their odds of success. Brushing up on your knowledge about blockchain technology, DeFi, economics, token standards, DAOs, and smart contracts, for example, can not only be of tremendous use on a personal level but can also serve to form a great basis for future ideas.
You could take it a step further and learn programming. This is, admittedly, a more difficult undertaking that might require a few years of one’s time, but knowing how to program for your favorite blockchain and protocols can go a long way. Even on a basic level, learning the basics can improve your security and unlock wider functionalities with complex smart contracts.
If we are sticking to research, however, there’s more to read about than just blockchain technology. Each and every project can have an impact and a role to play in a different industry, and all it takes is a knowledgeable and careful eye to spot the problems and opportunities that call for the blockchain. From logistics to real estate, or from digital identity to decentralized social media platforms, there are no shortages of areas that require research in order to assess potential use cases for Web3-based solutions.
Discussions play a pivotal role in progress, advancement, and innovation, and we are fortunate to live in a day and age where no amount of Earthly space could separate our voices from one another. It is the birthplace of new ideas; new concepts are envisioned and brewed, so if all else seems too difficult to carry out, one could accomplish a lot by simply engaging with the community.
Times are changing, and all that matters is what we do in the meantime.
This bear market is not the same as the one prior or the one before. While in the past, the industry was more speculative and risky, today, most of those worries are now behind us as adoption reaches new heights every day. At the time of writing, Bitcoin is now legal tender in 2 different countries, and that speaks volumes on how far we’ve come. Emerging through such periods makes projects and their communities stronger and more confident in what is being built for the future web. We’re enduring this one because if blockchain had been a bad idea, it would have burnt and faded to obscurity years ago, but clearly, that is not the case.
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The content above is neither a recommendation for investment and trading strategies nor does it constitute an offer, solicitation, or recommendation of any product or service. The content is for informational sharing purposes only. Anyone who makes or changes the investment decision based on their own opinions.