Crypto goes down again. Will it come back? – News 24

You’ve seen this movie before. Or at least you know the plot: a new technology is starting to attract attention, confusing skeptics, but intriguing its followers, who promise it will change everything. A barrage of hype and speculation lifts it in public, culminating in Super Bowl commercials that make the new technology seem completely mainstream and appealing – if it’s still confusing to most normal people. So crashed.

So yes. It was the first web bubble of the 1990s to burst in March 2000.

It also sounds like what’s happening with crypto and / or “Web3” – the recent reorganization of crypto – right now. Over the past year, your friends who know nothing about technology have learned about NFTs even though they could not explain them. The 122 million people who watched the Bengals-Rams Super Bowl in February also saw advertisements for once obscure crypto companies, such as FTX, approved by a celebrity with no obvious connection to the product. Slogan: “Do not miss the crypto.”

And now crashed: Something along the lines of $ 1.5 trillion in value has disappeared since last fall when cryptocurrencies plunged: Bitcoin has fallen 56% from its peak in November; Ethereum has fallen by about 63%. Do not even ask about Dogecoin. Even venture capitalists Andreessen Horowitz, perhaps the most prominent crypto-advocate in technology, admit that we may be entering a “crypto-winter.”

Rani Molla

The big question for anyone who has invested in crypto so far – institutional investors, founders and employees of startups and ordinary people who have bought a bitcoin or a digital cartoon monkey – is whether things are different this time. We have no answer yet.

There are many arguments from both sides. It should be noted here that cryptocurrencies strive to distinguish between blockchain, the technology based on a global network of computers that talk to each other and record transactions, and cryptocurrencies, the assets that are often generated by this technology. In theory, the interest in blockchain should not be tied to the price of cryptocurrency; in fact, that is quite the case.

If you think crypto is coinciding with the rest of the stock market and especially the technology market, you can point to data points like NFT price declines. Or investment “lows” – private companies that are forced to raise money in trades that value their business at a lower price than it was worth just a few months ago. This can be done with BlockFi, a crypto-trading platform. Less than a year ago, the company thought it was worth $ 5 billion; now investors would tell the company that it is worth $ 1 billion.

Or the fact that other cryptocurrencies – including Coinbase, one of the cryptocurrencies that sprayed millions on a Super Bowl ad a few months ago – are making layoffs or even cuts.

Meanwhile, some workers eager to quit their Big Tech job for Web3 startups a few months ago could think twice. A private non-crypto business executive tells me that it has been a lot easier to recruit people like Google and Facebook than earlier this year when they were all on their way into crypto.

There is also a general change in mood: A year ago, it was difficult to find many technicians who were willing to spend time publicly criticizing crypto and Web3. Now there are more and more of them, Box CEO Aaron Levie to software engineer Molly White, who runs a website dedicated to cataloging crypto and Web3 matches and bugs (I chatted with her recently on Recode media podcast.) See also: Joy in headlines like “Someone Chairs Seth Green’s Bored Monkey, Who Was Supposed to Star on His New Show.”

But if you think crypto is not going anywhere, you have your own data points: While Andreessen Horowitz talks about dark times in the near future, he has also just raised a $ 4.5 billion fund that is explicitly intended for crypto investments. That money needs to be spent somewhere, and there are still plenty of crypto investments: Katie Haun, a former federal prosecutor who became a crypto investor and raised $ 1.5 billion earlier this year, just announced a new deal this week.

And yes, some people might be tired of cartoon monkeys. But that does not mean they have had enough of NFTs. Something called Goblintown is the new hotness, telling people who spend time in this room while I consciously nod, even though I have no idea what they’re talking about.

Meanwhile, Gary Vaynerchuk, the marketing / self-improvement guru who loves nothing more than Next Big Thing, recently hosted a four-day VeeCon event on the Minnesota Vikings stadium floor in Minneapolis. The only way to get in was to buy a Vaynerchuk NFT, and he tells me that almost 7,000 VeeFriends owners showed up.

And many people I talk to in Web3 and crypto insist that things are not as serious as they seem – and they are used to cryptocurrencies fluctuating wildly. It would be strange if they told me otherwise because they are convinced. But that does not mean they do not believe it.

“This has been a cycle that has been widely discussed as a cryptocurrency. But when you are there, it does not feel that way,” said Jarrod Dicker, an entrepreneur and chief technology officer who is now a crypto investor in Chernin Group, a media and technology investment firm. “I think a lot of these companies are building or starting to build, they’ve raised their capital, they have their three to five year plan, and they’re going there. »

So far, crypto is at least something that many ordinary people like, for better or worse. Brandwatch, a company that analyzes the sentiment of social media, says that social coverage of “crypto”, “NFT” and “Web3” has been mostly positive over the last 12 months. According to Data.ai, the download ranking of crypto trading apps has also remained fairly stable.


Rani Molla

But if we draw parallels between now and the Web 1.0 bubble, it’s important to note that it did not completely empty air from one day to the next in March 2000 – it took a few years before all the dot bombs disappeared more stupidly.

I was there at the time, and I remember one could measure the decline by how the successive waves of layoffs were handled: people who were fired early by their dot-com got nice payouts (I remember, that several people told me that they were going to spend their wages on cooking school). But the successive layoffs became less and less generous, and when the companies closed their doors forever, the employees had nothing left because there was nothing to give them.

So as much as I hate this hedge, I will hedge: we do not know how serious and significant the krypton meltdown is for some time. Meanwhile, one of the things you hear from Web3 followers is that it would not be terrible for lame crypto companies to walk away and leave the good ones untouched. In this scenario, their company is Amazon, which survived the dot-com bust and became … Amazon; other people’s lame ventures are theGlobe.com, a dot-com flagship that now exists only as a Wikipedia entry.

“Every cycle, when there’s a huge bust, I think people who build quietly are pretty ecstatic because a lot of the noise is washed away,” says Tina He, the Web3 entrepreneur I spoke to earlier this year , when I was trying to get my head around the hype.

He’s still building something called Station, which she hopes will be a LinkedIn for crypto workers, and says she has a “super lean” team of six workers and “lots of leads.” On the other hand, she says, the fact that other Web3 teams might be struggling will affect her project, which assumes there will be a lot of Web3 projects and staff to follow and connect with each other. So it can not last forever without new money.

“We’re actually quite optimistic and idealistic about our progress,” he tells me, before acknowledging that she may have to take a “bridge turn” to adapt her to a milder funding climate. “Even without it, we could get through the winter – if the winter lasts less than two years. »

Rani Molla contributed to this story.

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