For the first time in three long years, the cryptocurrency has seen massive bear market conditions and is down a whopping 45% since the beginning of 2022. The effects of the 2018 and 2019 crypto layoffs are now beginning to strike, and crypto exchanges such as BitMEX and Gemini have vowed to downsize from April.
Well-known crypto exchange, Coinbase has also turned down job offers to cut costs. Responding to this, Peter Smith, CEO of Blockchain.com, made a statement on crypto companies at the Money 20/20 conference in Amsterdam, saying that many digital asset companies have grown very rapidly, but none of them have been around for a long time. Haven’t focused on being profitable. ,
“We are the smallest crypto company of our kind by headcount – others have thousands of employees ex-profits.”
Smith further noted that many firms spent up to $800 million on marketing costs through this cycle.
He added: “A lot of this washes out of the space, not just in crypto, but in fintech more in general. We are going to see a fundamental rotation from growth to free cash flow.”
Founded in 2011, Blockchain.com was driven by investors to spend more on marketing and grow rapidly. As a result, bitcoin has risen from $9,000 to around $62,000 in a short period of time.
Smith said that:
“Every company following that strategy has read about their business dramatically — big growth rounds are collapsing, companies are now growing at bottom prices — it will be difficult for them to adapt.”
The Three Ages of Bear Markets: Smith
Smith outlined in an interview with Blockworks that he describes three eras of a bear market as the ‘beginnings’ – which are difficult to understand; ‘Between’ – the point where despair comes; and the ‘new normal’.
The middle stage is defined as the chapter where the tides go out, with Smith stating: “We are entering another era” [despair], which is my favourite. I am a free market capitalist, and I enjoy the power of cleaning the market.
This phase defines the ability to differentiate quality projects to benefit customers, teams and stakeholders as well.
Smith said, “The last stage is when everyone looks around and says, ‘Oh, it’s crypto now, and we’re all going to figure out how to make this thing work.
Smith, emphasizing the Terra UST stablecoin crash, says that he always had doubts about the stability of the Terra ecosystem – so he exited before the crash happened. Thus, Smith also suggested not to opt for stable coins.
Responding to such outbursts, Smith said that “anything that goes too fast worries me”, as evidence that the Solana recorded an all-time high of $260, down 85%. has gone. Despite these market conditions, Smith scoffed at Justin Sun’s idea of seriously considering a new algorithmic stablecoin, the decentralized US dollar (USDD).
USDD recently increased from zero to $700 million over the previous month.
