Welcome back to Chain Reaction.
Kevin Rose of True Ventures and Proof Collective talked with us about the latest crash of the digital currency and the future of NFTs in a bear market. There are more details below.
Last week, we talked about the efforts of regulators. The markets crashed this week, and a new generation of criptoms are about to find out that they can't pay for loyalty.
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There is no other way to put this week. It was a different kind of doozy than the crashes before it.
Hundreds of billions of dollars in value were erased from the global market cap of cryptocurrencies this week as top coins like Ethereum and Bitcoin saw major declines. Hundreds of thousands of investors were wiped out on trades as the market crashed, and Terra's stable coin fiasco seems to have wiped out tens of billions of dollars from the market.
The amount of money being lost and the amount of people losing money is larger than ever before because of the rapid expansion of the markets. There is going to be a lot of lasting damage if the markets continue to go to hell.
After several years of gambling on public stocks, consumers were ready for a new form of investment and the industry welcomed them with open arms. For the past couple years, venture capitalists have been making bets oncryptocurrencies geared towards consumers, gamifying investing with actual games that boasted token and NFT integrations. The community feature of the platform is one of the killer features of it, and it is explained that giving users a financial stake in the platform will lead them to act in the platform's best.
This has all played out well enough, but now comes the interesting part.
When the air is taken out of the space and users are left with a naked platform, things look a little different. Play-to-earn gaming companies have raised billions for games that are only fun when you are rich. NFT projects have made trading card-like mechanics fun when the money is flowing. Web3 media companies, publications, and social networking companies are all bankrolled by VCs, and all of them are heavily reliant on speculation and bad products.
The other way to read this is that in the gold rush of web3 the founders forgot what love was about because it was a great product and over-indexed on consumer greed. The market could bounce back tomorrow, but it won't be any less true that you can only pay for loyalty for a long time.
Hello, Anita, I'm here again. Lucas and I talked about the upcoming winter on the Chain Reaction podcast. The S&P 500 has fallen for five days in a row, with public equities taking a hit as well.
The prices of cryptocurrencies are going down. The world's largest digital currency is down more than 50% from its November peak. It dipped below $30,000 a few times in the past couple of days, which analysts say marks a crucial threshold for the coin, if it keeps dropping. The situation with Terra's UST stable coin is not helping it.
It's not uncommon for the bulls to speak in decades, not days, and have a stomach for volatility that isn't present in the broader market. This is not the first time that the price of Bitcoin has crashed, so it is worth taking a look back in time and seeing how the last major winter for criptocurrency unfolded. In the middle of the year, it peaked at $20,000, but it crashed below $12,000 in December as hacks, regulation and investor skittishness all came to a head. It didn't start increasing in value again until late 2020/ early 2021, when it finally passed the $30,000 mark, where it stayed above ever since.
Things could be different this time around. Only time will tell if retail investors have the ability to weather the storm. The emergence of Solana and other emerging blockchains have already eaten away at the competitive edge of Bitcoin. In my latest feature, you can read more about the issues that have been afflicting Bitcoin and what its backers are doing to help boost it.
Bitcoin’s bid to become the ‘one chain to rule them all’
Don't forget to watch this week's episode of Chain Reaction to hear Kevin Rose, co-founder of the Moonbirds NFT project, share some words of wisdom.
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The person isAnita Ramaswamy.
Where startup money is moving.
Terra's UST crash will make life harder for the industry.
This past week, stablecoins have taken the main stage across conversations in the crypto world as a number of factors shake the industry up. As the crypto market responds with bearish sentiments, a major question stands: What does this all mean for the future of stablecoins? A number of market players weighed in on what the road ahead may look like.
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