State of Crypto: what you need to know ☠️
Let’s be honest: these last two weeks have been the most difficult in the crypto sphere since the March 2020 crash.
A major stablecoin, $UST - supposed to be worth always $1 - and $LUNA, the poster child for a new era of crypto - both went to 0.
Thousands of people got totally wiped out.
If you held anything outside of bitcoin and Ethereum, you probably got totally destroyed. I certainly did. I also got scammed, so double bad luck.
If you wanted to quit and sell all your crypto, I wouldn’t blame you. Quite frankly, it’s easy to lose motivation when things go down 50% in a day.
That gut-wrenching feeling when your screen is all red… arghhhhh.
But what’s important to understand is that like all markets (and moons, planets, moods?) - crypto is cyclical.
And this is just another point in the cycle.
One of the most prominent venture capital firms in the world, a16z, released a State Of Crytpo report this week, and there are a lot of takeaways worth mentioning.
Here’s what you need to know:
We’re likely in crypto winter right now. Crypto is driven by prices, which then encourage interest and innovation. Right now, things ain’t looking pretty. But what comes after winter? You know it.
If you step away from prices and zoom out, crypto is literally on an upward-only trend:
Most of us tend to associate the state of crypto with where bitcoin is trading. But prices hide the bigger picture of what’s actually going on - the smartest people in the world storming the building… to build.
3. The impact of crypto on the world is real.
First, for the 1.7 billion people who don’t have a bank account - but who have mobile phones. DeFi alone - lending and borrowing in crypto - has gone from 0 to $100 billion in value in 2 years.
Second, for creators. The average Youtube channel made $2.47 in 2021. The average NFT creator made $174,000 in the same time frame.
And third, for any collaborative community, anywhere. DAOs (decentralized autonomous organizations) are going mainstream and fundamentally altering how we make decisions in groups.
And we’re just scratching the surface.
4. Historically, downturns are times to build - not quit.
Imagine it’s 1999 and you think the Internet is cool. You go all-in.
But then the dot-com bubble bursts, you lose money and swear to never touch the Internet again.
As a result, you miss out on social networks, streaming, smartphones, etc. and you probably become the grumpy, anti-tech uncle we all have.
Well - don’t be your uncle.
Price dips kill enthusiasm, I know, but if history is any guide, now is the time to be Bob the Builder - not Mister Market.
That’s not to say there won’t be bumps in the road.
My thesis from my previous newsletter hasn’t changed. I’m tripling down on crypto, and on crypto gaming in particular.
I am not a gamer, but applying crypto to gaming is the biggest no-brainer I’ve ever seen.
Just imagine if, instead of playing their favorite game 6 hours per day in - for nothing - millions of people can now sell their heroes/characters/virtual goods to someone else for a profit… and make a living?
That’s what’s happening now.
There are 3 billion gamers today, and already:
20% of all NFTs ever sold were for games
50% of all crypto activity comes from games
$2 billion of virtual land has already been sold inside crypto games
the gaming market is growing fast
Play-To-Earn games like Axie Infinity are just the first wave of crypto games that allow anyone, anywhere, to earn living playing games.
And there will be many more. They’ll pop up today, tomorrow, in 6 months, and in 6 years.
But they’ll come to those who are paying attention.
So to you my friend, I say: zoom out and keep paying attention.
The party is just getting started.
P.S: you can read the full state of crypto report right there.