Bear Markets - Unqualified Opinions

an exercise in resilience

Bear Markets

“One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always run to simplicity.”

-Bruce Lee


I’ve always believed in addition by subtraction.

Whether it’s in my writing, my waistline, or my day-to-day responsibilities, adding bloat is (almost) always a net negative.

Crypto companies and projects by and large got too fat and happy during the 2017 run-up, and didn’t think about what would happen when the music stopped.

So now, whether there is a “relief rally” or we continue to bleed downwards for a bit, I believe two things: 1) fundamentally sound cryptoassets will resurge in a massive way, and there will be another bull market that dwarfs the last, 2) that could take a while, and in the meantime, we’re going to feel the aftermath of this hangover for a while.

I rather liked Fred Wilson’s look back on the internet bear market this weekend and lessons it can provide for crypto peeps, even if it scared the shit out of me.

“[F]or those of us who were investing in tech and tech startups back in 1999-2002, that time will forever be etched in our minds. It was a brutal period during which our belief in the Internet and its potential was sorely tested. Many friends and colleagues left the sector and never returned.”

Consistent messaging is coming from many investors and early adopters in crypto right now - folks who have lived through multiple bull-bear cycles: cut fat, and prepare for winter…because it’s already here.

Another of our investors put the crypto markets in context this weekend, and I agree:

“At this point everyone is guilty until proven innocent. The sentiment has shifted from euphoric and forgiving to depressed and unforgiving.”

You can fight that reality, or you can hunker down for the next battle. Learn to “embrace the struggle.”

Or as Fred wrote in his post:

“[Look] for signs of life. There were little internet projects that turned into big ones. Blogger was started in late 1999, almost shut down many times in the next few years, and was picked up by Google in 2003. Myspace, LinkedIn, and Facebook all emerged in the 2002-2004 period, as the Internet was finally coming to life again.”

For those of you who leave, we wish you the best. We’ll be here waiting to welcome you back as the market recovers.


P.S. If you’re looking for signs of life, we’re still hiring engineers.

P.P.S. Share. Subscribe. Spread the (rational) crypto love. Tweet at Messari for requests, feedback, comments, or questions.

Best of the Rest - What We Missed Last Week

Every weekend, we dig through the past week’s posts from crypto’s other great sources of content to see what we missed in our own weekend reads.

Here’s us curating the curators:

The Future of Organizations- Jorge Izquierdo and Ramón Recuero
(h/t Token Economy)

Aragon’s Jorge and Ramón write a compelling piece on the origin and evolution of organizations, and dive into DAOs and their prospects for ushering in truly decentralized, and truly autonomous organizations. They argue Bitcoin is the first ever DAO, because it optimizes a very simple function (keep a consistent order of valid transactions) and operates in total autonomy with many distributed actors: miners, users and nodes. They do recognize that we haven’t found the optimal organization yet, though experiments are and will remain ongoing. The flexibility and efficiency DAOs bring will sprout new models for companies and governments alike. (15 min)

State of Blockchains for Q3 2018 - Outlier Ventures
(h/t NLW)

Outlier Ventures published its “State of Blockchains” for the latest quarter. Quick synopsis: ICO raises were $1 billion, off 74% from Q1’s $3.8 billion, which OV attributes to investor frustration over regulation and nosebleed private valuations (not to mention the more recent, vicious correction). In this “Crypto winter”, the crypto “market cap” has collapsed from a high of $829 billion in January 2018 to $200 billion at the time of report (less now). That number has always been insanely inflated if you adjust for liquidity, and maybe still inflated given how far daily volumes have fallen. Glass half full? crypto trading infrastructure investments have been huge, with entrants from Fidelity, Intercontinental Exchange (Bakkt), and others. Corporate blockchain tinkering continues, and some regulators around the world are looking to create more friendly environments for blockchain startups. (29 slides)

How South Korea’s second-largest bank invested in a crypto exchange and shook up the market - Joseph Young
(h/t The Block)

Joseph Young writes a stellar piece contextualizing the South Korean crypto market and its various players, in particular, Shinhan Bank, the country’s second largest commercial bank, which entered the crypto scene in early 2018 with the Gopax exchange. In the aftermath of various data breaches and exchange hacks, Shinhan Bank played a vital role in convincing many South Koreans that crypto was legitimate and blockchain tech would be a core pillar of the “fourth industrial revolution”. With the promise of stable banking services, the legal and regulatory landscape for crypto in South Korea continues to improve and is on the rise. (8 min)

Did I miss something?

Send me the link, your twitter handle and your best imitation compression algorithm write up. If I like it, I’ll include your bit next issue (with attribution).

Podcast Recap

🎧 ICYMI on the Messari podcast, Katherine sits down with MyCrypto’s Taylor Monahan to talk product design and the vast difference between intentions and outcome in product design vs. user experience. (19 min for your lunch break)

BONUS: Qiao swung by Jeffrey Tong’s “Smartest Contract” podcast to chat all things crypto, and provide some updates on what we’re working on at Messari.

Listen and subscribe to all of our podcasts— on Apple Podcasts here, Spotify here, and Google play here.

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