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Can crypto survive this bear market? - industry smells like trouble

 

By Nerly Shammah Nov 18, 2022

 

 

Yes, crypto can survive the bear market, but it will take a lot of rebuilding and adjustment to get there. 

 

So much is happening in the digital assets market and it will take a lot more than a miracle to clear the smoke that adds to the heavy clustering clouds. 

 

At the time of writing, the cryptocurrency market is trading at a whopping 71.2% loss, considering its previous all-time high market capitalization of over $3 trillion, the digital assets watched trillions move out in the last months and year, and this was significantly felt by DeFi protocols as billions in total value locked(TVL) exited the section leaving a fraction to try and retain relevance. 

 

This of course has got many people talking and given that Bitcoin in its glory has tumbled similarly, bringing the entire crypto markets with it, uncertainties of how the industry will fare in the next couple of months begin to grow stronger as numerous events play a crucial role in its constant bleeding. 

 

Some months ago, Terra money took the cryptocurrency industry down a hole leading to heavy demand for regulatory clarity on crypto assets and investments, even though the UST stablecoin crash has been a notable event in crypto history, this happens to be the least of the government's focus given the ever-growing SEC attacks on ICOs that it deems securities. 

 

FTX drama and centralization alarm

 

While there have been numerous reports on the unfolding events at FTX, a once top industry-level cryptocurrency exchange, the actual detailed walk through all that occurred and the effects are yet to be fully decrypted. As expected, similar to the LUNA UST tragedy, the general market has reacted to the increased risks perceived amongst space players and the need for actual decentralization grows stronger. 

 

That said, these events have led to phased-in risk management solutions first suggested by Binance via CZ and then followed by other cryptocurrency exchanges, the proof of reserves movement specifically, an attempt to restore faith in the system. 

 

Just when risk and losses were thought to be priced in as closure, attention was brought towards the passing on of liquidity between exchanges for reserve audit, even Binance has been caught entangled in this mess as recent wallet activities look to be suspicious creating more fear than the faith it hoped to restore. 

 

Twitter down the hole - the end is near? 

 

On recent coverage, Twitter seems to be short of a couple of staff which puts the crypto hub in an unstable position as crypto is watched to melt. While many are already seeking alternatives to lay their tools and reinstate, what looks mere may turn out to impact crypto more than expected. 

 

Unprofitable Bitcoin Mining

 

A June report, by Forbes, indicates that Bitcoin mining is becoming highly unprofitable, however, it does note that the network earns more layers of security as the hash rate increases, and while numerous miners find themselves in a tight spot, network value is playing a crucial role in seeing it that industry participants are looking past the lines of price and bankrupt companies. 

 

Rebuilding with close considerations 

 

The bear market is for building is becoming more and more of a hit phrase as the industry is in need of a turnaround, this is expected to be achieved given the ecosystem keeps building to achieve what crypto is initially designed to. 

 

Peer-to-peer, flexibility, interoperable networks, immutability, security, value creation, and deployment of sustainable frameworks. The focus is changing to what it should initially be, more risk management education is exposed to users given each event lessons, though the exaggerated analysis on what seems to be a crypto demise, nothing beats a community of builders and users determined to push through, thus, the bear market is expected to phase out like it always do and cryptocurrency to scale to greater heights.