The crypto market sentiment hasturned bearish. Bitcoin and Ethereum have fallen by at least around 25%, while altcoins – in some cases – are down by over 90%. The market has taken a significant toll on investor portfolios. And the reason for this exists well beyond the cryptosphere. Rising inflation due to COVID-19 and FED’s balance sheet expansion are some of the factors that have negatively impacted global markets, including crypto.
The recent pandemic-induced supply chain shock has also been a contributing factor. Similarly, the Russian invasion of Ukraine wreaked havoc on global financial markets, driving inflation up to 7.1%. The LUNA-UST collapse fueled the flames even more. The $40 billion protocol went to zero, creating havoc in the market and reducing capital inflows.
As a result, many crypto projects have closed shop and exited the market. But although the bear market is the primary factor, other internal reasons have collectively contributed to this wipeout.
The Rise of Failing Crypto Projects
Crypto markets have been harsh for projects with little or no use cases. Although riding the hype train has benefited in the short run, it’s never sustainable in the long run. We’ve seen this repeatedly, ever since the ICOs of 2016. Over 90% of projects developed during that time failed within six months. And to some extent, we are still witnessing similar trends.
There are multiple reasons for this, but the lack of real-world utility is one key issue. Most projects focus on solving problems that don’t exist. They merely try to capitalize on short-term trends by creating tokens, which they dump on retail. Similarly, many projects have employed bad tokenomics. Token metrics play an important role in determining the success of a crypto project. However, most projects ignore this and thus collapse in the open market.
Moreover, projects also suffer when they cannot engage active and loyal communities. They also often use deceptive marketing tactics to gain followers and community members, resulting in failed products.
Nevertheless, things are changing as new real-world utility-driven projects are emerging.
New Utility Driven Brands Showing Resilience
The crypto market is cyclical and prone to significant, unexpected, and unprecedented volatility. However, not all crypto projects succumb to its extreme volatility. Genuine brands with real-world applications exhibit resilience even during severe bear markets.
One great example of a brand with real-world utilities is exeno. It’s among the first global e-commerce platforms allowing users to buy various branded products using cryptocurrencies only.
The platform’s flagship product is the exeno marketplace. Its design lets users choose from a broad assortment of top products and purchase them using a wide range of cryptocurrencies. Exeno has also integrated MetaMask and Binance Pay for accessible payment gateways. Moreover, it features a simple UI where users can seamlessly purchase products without registration. The exciting part, however, is that it supports global shipments besides providing omnichannel customer support.
The second essential component is the exeno coin (EXN). It is the utility coin of exeno that is working on providing multiple benefits to users, including Stake Back (cashback) programs, referral programs, etc. The vision with EXN is to go multi-chain, helping exeno leverage features of blockchain collectively and unify the crypto ecosystem.
Bearish Momentum Continues: What Next?
The market has continued the downtrend. However, some experts believe this is a temporary correction due to macroeconomic changes.
Alkesh Shah, the global head of crypto and digital assets strategy at Bank of America, says,
“In our view, this is a correction. Skeptics are more vocal when prices are down. Right now, we’re hearing a lot more from those who are pessimistic than from the optimistic. This industry isn’t going anywhere. The market will soon recover.” Read more about it here.
Similarly, Nischal Shetty, CEO of WazirX, also stated that
“the macroeconomic factors have resulted in a significant decline in crypto prices. However, both the crypto and traditional financial markets are facing a downturn. We believe that the crypto markets are maturing. Crypto, like other markets, has a bull and bear run, and we are now in the latter.”
So, the majority is still optimistic about market growth, believing that patience will bring rewards in the long run. We shall, indeed, overcome bear markets for good.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
