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Opinion holder entrepreneur Contributors are their own.
2022 was an important year for the crypto space. We will all remember the bankruptcies of major global companies such as Luna, Celsius Network, FTX, BlockFi, etc. that caused huge losses to investors. The bear market has had a dramatic impact on the crypto economy and investor portfolios.
Markets move in cycles, like 2013 and 2017. First, there was the crypto summer where everyone was hyped about their interests and profits. Then came the fall of cryptocurrencies and investors started seeing deficits in their portfolios. But as crypto winter began, investor portfolios began to bleed, even some big and credible companies submerged.
In this post, I want to highlight some of the most important lessons I learned for myself and my company after surviving another winter in the crypto market.
RELATED: Will Crypto Make a Comeback in 2023?
1. It’s all about money management strategies
2022 is the year of the legendary fall. Companies believed to be reliable borrowers, such as Alameda Research, borrowed money unsecured and eventually went bankrupt due to poor cash management. Besides, other prominent names in the crypto space such as Luna, Celsius Network, FTX and BlockFi also went bankrupt against all market expectations.
2022 has shown that different approaches need to be used to track corporate assets, monitor liquidity and provide collateral for debt. Instead of analyzing the size of the company, it was to blindly trust the company for its size and reputation.
RELATED: How to manage your money with confidence
2. Stay away from toxic assets
The future market leaders are the companies that have survived unscathed problems related to Luna, Celsius Network, FTX or BlockFi and do not hold toxic assets. These are companies with the potential to launch new products and ideas.
From personal experience, I would say that 2022 was the year my company explored new directions. Most recently, the standard earning tools on the market proved to have no future. I believe that providing a reliable service that answers and mitigates challenges in this area is an important step in maintaining a company’s viability in a turbulent market environment.
3. Be careful with tokenomics
When looking at a company, all performance metrics matter. What’s the benefit of having a great management team and business model if tokennomics isn’t good? Tokennomics offers stable development because people are investing in the token itself first and foremost. has become an essential element for
Bad tokenomics often provide valuable insight into whether a company’s business model is sustainable over the long term. Look for projects with tokenomics designed to serve investors, not developers. Watch out for high inflation and other red flags. This is often a symptom of unsustainable business models designed to enrich the few.
Related: 8 Smart Ways to Analyze Crypto Tokens Before Investing
4. Don’t fall for the hype
This year proves that the market is often wrong. Many coins and companies grew on the hype during the cryptocurrency summer. Investors jumped on the train and followed the crowds, ignoring the lack of solid fundamentals and future growth prospects. But when the bubble burst, their portfolio took a hit.
Luna for example. The company had his $50 million in assets, but promised a 20% interest payment on him in its own stablecoin currency. This meant his $10 billion payment to those holding funds in that protocol. The business plan was too good to be true, but when it turned out that stablecoins weren’t that stable after all, a lot of people went crazy for it and lost everything.
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5. Teamwork is essential
In times of market turmoil, teamwork is more important than ever. The keyword is flexibility. Markets are unpredictable, so it’s a team job to adapt quickly to changes.
The business phase of the market is very short, so companies need to be very flexible and able to adapt to new realities. Bear markets often make it impossible to plan too far ahead. Focus on what’s in front of you, prioritize your client’s objectives, anticipate which products will be of interest at the next stage of the market, and prepare in advance.
In addition, bear markets are also a great opportunity to offer products that generate income and ease investor anxiety. Additionally, with proper money management skills, businesses can reduce customer anxiety by investing their funds in discounted assets.
Stay positive.The bear market is almost over
Bear markets are not easy, but staying optimistic is essential. Take a step back and realize that making money in the cryptocurrency market is a long-term game. That is the secret of wealth formation.
My opinion is based on an analysis of past phases, and crypto winter typically lasts 4-6 months, followed by spring. Entering with a large user base, a great product, and the opportunity to grow your business is imperative for companies.
Companies need to pay attention to costs and build teams of people who believe in the market more than ever. The team needs crypto enthusiasts who have a good understanding of the market and products. Having a professional on your team is essential.
Related: A bear market is a blessing for Web3’s future. This is why.
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