The downturn in the bitcoin and cryptocurrency markets has left industry experts anticipating an extended winter. But co-founder Sandeep Nelwal believes the bigger picture is still bleak for Web 3. The exec stressed that the improvement has more to do with the “macro” than any fundamental vulnerabilities in the Web 3 area.
What will happen next?
In the latest Twitter thread, Nelwal Told Web3 remains bullish despite the chaos in the market.
“For a long time Web3 has remained mega-mega bullish, so newcomers keep learning and builders keep building!”
Predicting a protracted bear market, Nelwal said there could be a respite if the US Federal Reserve manages to “remove” the market’s uncertainty and suggested that there is “a lot of dry powder sitting around to bring aggression.” Bull rally.” However, given the concerns of stable inflation and stagflation, the prospect of such a scenario appears bleak.
Many venture capital funds have raised large amounts of capital. Nelwal believes that even if these entities take a cautious approach in selecting their bets and the acceptable valuation will be very low, the executive expects “thesis-based VCs to remain deployed.” He also said that most of them will play in liquid markets as well.
The Polygon co-founder predicted that markets would eventually be able to find a bottom once inflation peaks in 3-6 months when the Fed raises rates. That’s when “things will return to normal.”
As global stocks plummeted, investors dumped assets deemed risky, inadvertently leading to a massive sell-off in crypto. As a result, trillions of dollars in value were wiped out in the market. Ongoing volatility has destroyed both long and short positions.
Amid a weak global economic outlook, several established cryptocurrency platforms including Coinbase, Gemini, BlockFi and Cryptocom have reduced their workforce, citing dramatic changes in macroeconomic conditions. It appears that crypto firms are struggling to weather the storm.
Binance is among a handful of companies that defy the current market sentiment of lay-offs and cost-cutting schemes. The CEO of the exchange recently claimed to be a “battle-chest” to help the platform amid a falling crypto market. CZ even said that crypto winter is a great time to hire people.
Featured image courtesy of Wild Digital
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