On the current state of the crypto market: the only key word in this field is "survival"

Every long position is going to be painful and it's not fun to see prices collapse. It seems that we should have done better risk management, but in hindsight we found that we were still fully loaded. Risk management is hard to do in cryptocurrencies as this is an early venture capital investment (even BTC ) on liquidity whose price has not yet been discovered.

Cryptocurrencies are still not decoupling from other risk assets this cycle. Yes, we have an opportunity to deploy more long-term capital in this space, but it is still risky and probably has at least 1.5-2x beta to NASDAQ.

So, cryptocurrencies are not going away . But this cycle will test the resilience of the protocol. During this time period, many bells and whistles will die, and the era of cheap tokens that do not generate cash flow and poor economic systems is ending.

Cryptocurrency investors have done well over the past few years. With mean reversion these days, when a fund has billions of dollars to spend on a relatively small trading universe, it never ends well. Yes, crypto will transform many industries, but narratives always get ahead of fundamentals .

Am I bearish? My long-term view remains unchanged, and I'm still working on a number of Web3 projects that will provide value to this tangible and huge market. I don't think DeFi will disappear, and the ideas of Web3 games and digital property (NFT) will continue to exist. I am not bearish, I am bullish on those valuable early teams, I see more Web2 talents pouring in, and I am also looking forward to the entry opportunity when the token price is lower than the seed round price. Of course, I was also prepared to see more pain and losses.

In 2012, 2014, and even 2018, I felt there was a risk because Bitcoin was basically the only game in the space. The idea of smart contracts is powerful, but there isn't much practicality yet. This is not the case today, we have a more prosperous ecosystem (NFT, DeFi, GameFi, DAO).

The only key word in this field is survival. As for now are we close to the bottom? I have no idea. We can always fall more than we think so be prepared for that. Web3 is probably the most exciting emerging high-tech field, and investors are watching to see when the shock will be fully absorbed, and then they will enter.

In short, cryptocurrencies are not going away . Given its broader future use cases and value unlocked, coordinated through global human and financial capital, it's not hard not to be excited about this asset growing beyond $1.5 trillion, but we need to have a game long game.

Written by: Santiagoroel

Compilation: Tech Flow Intern