bitcoin is floating above its 52-week lows as crypto markets continue their bearish stance. But some long-standing market participants, such as Dan Helddirector of growth marketing at crypto exchange Kraken, they are not worried.
Held got into Bitcoin in 2012, about 100 years ago in cryptocurrency time (because time goes by so fast but it also feels that way, so long in crypto).
“In the early era, it was just Bitcoin, there wasn’t even [alternative] coins, or there were very, very few,” Held said during a fireside chat with Decrypt’s editor-in-chief. Daniel Roberts at CoinMarketCap’s The Capital conference.
Although there is a lot of talk of a crypto winter circulating in the community, Held said that the sentiment for this current market cycle is different. While he, and many others, have persisted in major market cycles over the years, the narratives have changed a lot.
“It was mainly retail [investors] until 2019, 2020, when you started having institutional players,” Held said. “It almost feels unreal to see big institutional people like JP Morgan speak positively about Bitcoin; that’s weird to see because in 2013, we were considered crazy.”
In the past two weeks, there has been a big shift in the macro environment with many people moving away from risk, and crypto markets have been caught up in the larger market’s downtrend, Held said. “Cryptocurrencies are considered risky right now, so Bitcoin and other crypto assets are selling off as people try to reduce risk.”
But while there is fear in the crypto markets, there is also fear in traditional and tech stocks, Held noted. The S&P 500 and Dow Jones Industrial Average are down 15% and 10%, respectively, so far this year, MarketWatch showed at press time.
Aside from the broad indices, there have been a number of individual stocks that have also tumbled, including Snapchat and Netflix, which are down 68% YTD. Popular video calling app Zoom isn’t climbing the leaderboard either, with its shares down 42% so far this year. And yet, the talk of the traditional stock crash is not as aggressive or prominent as the talk of the crypto markets moving.
“We certainly see that these narratives have been ebb and flow,” Held said, from extremely risky, leveraged individuals with spikes in FOMO or enthusiasm, to resetting and holding on as markets pull back.
In the 2018 bear market, nearly $700 billion in total market capitalization was wiped out from that year’s peak of around $800 billion, bringing the value added of cryptocurrencies to a low of around $ 100 billion, according to data from CoinMarketCap.
While around $500 billion has been wiped from the value of crypto assets today since the date a year ago, this bear market is different from the last cycle because there are thousands of players across tech who want to get into the crypto world and build things in the ecosystem, Held said.
“We have venture capital funds raising tens of billions of dollars to implement on this system,” Held said. “I don’t think this [crypto] winter is going to be as hard as the others. I think you have a lot of players combined with a lot of funding and they’re going to find and build products that deliver value.”