Crypto Bear Market Retrospective: Lessons Learned and Projects Built

Key Insights

• In the 10+ year history of Bitcoin, there have been multiple 70%+ drawdowns and one 90%+ drawdown. Since coming on the scene in 2015, Ethereum has also experienced at least two 70%+ drawdowns.
• In hindsight, most of these downturns had a fairly obvious root cause, whether it be a hack, exchange shutdown, regulatory action, or a broader macro sell-off.
• Often out of these bear markets notable projects and investible themes came as a response to whatever caused that particular downturn or as a response to underlying deficiencies plaguing the ecosystem at that time.
• As we eventually come out of the 2022 bear market, we can’t be certain what innovations will be created, but investors can look at the current problem set and extrapolate the solutions to the issues that we see today.
• We see opportunities in GameFi, Decentralized Social, streaming payments, mobile, regenerative finance, decentralized science, and other avenues.

Since its inception, crypto has had a history of extreme volatility as an asset class. Bitcoin has experienced at least one ~90%+ drawdown and multiple 75%+ drawdowns. Ethereum has experienced multiple 80%+ drawdowns in its short 7-year life. Each of these drawdowns or bear markets tests the conviction of crypto investors.