Looking at the most recent crypto news, veterans within the space would say that we are in a crypto winter. The term is used fairly often, but what does it actually mean? Crypto winter refers to crypto prices falling and staying low for an extended period of time. Top cryptocurrencies like Bitcoin have dropped 55% over the last year to around $20,000 per coin. Ethereum (ETH) and other leading altcoins, such as Cardano (ADA) and Polygon (MATIC), have lost over 60% of their value since last year.

What does this mean for companies?

Companies like Coinbase, BlockFi, and Crypto.com have announced hiring freezes and staff cuts in order to cut back costs. Hiring freezes are normally a sign that an organization is trying to deal with an economic downturn.

What does this mean for developers and startups?

Developers and startups are at a remarkable point with blockchain technology. The technology has not been integrated into all parts of society and continues to be very early in the financial adaptation phase. There is consequently a chance to create and deploy dApps at a lower gas price.

There is also still working capital within the space, which implies that “those who are looking to make something supported by a solid idea will thrive during this environment” — especially because, unlike in 2018, it seems likely that there will still be substantial working capital available. As an example, consider that OpenSea, which generated $20 billion in NFT sales in 2021, was founded in 2017, with plenty of building throughout 2018 and 2019. That wasn’t just during a fallow period for crypto — it was before the general public had heard the term non-fungible token.

“We saw plenty of recent startups throughout the industry over the past year, and plenty of them will fail,” says Jake Weiner, founder and CEO of Uncommon.

This means that it is expected that more startups will get into the industry, even with the winter in full effect.

The future of Crypto

“I don’t expect crypto to return roaring back because it did in 2021 because the tailwind of Fed monetary policy has actually become a headwind for the asset class,” Johnson says, adding that despite the headwinds, we could still see the cryptocurrency market rise from the ashes.

Morgan Creek Capital Management founder and Chief Investment Officer Mark Yusko during an on-stage conversation at Consensus 2022 said that “winter is the best time for venture investing,” noting that down periods are when important development and technological leaps happen. Last crypto winter saw advances in Defi, NFTs, and scaling systems like Bitcoin’s Lightning Network and Ethereum’s ZK-rollups.