“Industry recession”
Recently, the market has gradually calmed down, and many people in the industry are unable to see the trend clearly, or they just have to “go with the times.” In fact, this is not the first time this has happened.
Looking back, since I entered this space in 2016, it seems like I have been through four major recessions. And while I always consoled myself that this would all pass, that the uptrend would return, and that liquidity would return, when one is in these recessions, one can’t help but feel a little frustrated or helpless.
Winter 2015
The first time I encountered this recession was when I first entered the industry. At that time, the industry had just come out of the “winter of 2015” and entered the recovery period in 2016. At that time, OKCoin and Huobi in Zhongguancun stopped laying off employees, the market began to slowly recover, and finally, the exchanges began to generate positive income.
Since I was new to the industry, my feelings of excitement and amazement lasted for two years, which meant that regardless of any crises or unexpected events, I was always optimistic about the industry.
Many of the stock exchange employees of that time are now industry insiders. They rarely talk about their previous jobs, living in modest shared apartments with low rents. Now, they identify themselves as founders of companies or managing partners of investment funds, and their LinkedIn profiles have gone from not listing any educational background to listing MBAs from prestigious universities like Tokyo National University or prestigious American universities.
Back then, the field was much more interesting, with people’s academic and professional backgrounds varying greatly. Almost every month, blockchain events and presentations were held on Entrepreneurship Street. The presenters were either traders who had made huge fortunes buying cryptocurrencies, or people with modest educational backgrounds who had become exchange operations managers. This era was full of exciting stories, and the events were fun but also strange.
Back then, there were no memes, but shady projects and unsustainable investment schemes that made the industry look like a golden opportunity. Platforms like Jubi, Yuanbao, and Bit Era were making amazing profits, despite poor liquidity. Buying an altcoin with 100,000 yuan could result in a 5% price slippage, but at least you could deposit via WeChat easily.
The first project I helped launch was a cryptocurrency based on a celebrity in the industry. I was responsible for editing the whitepaper and coordinating with exchanges. But, as expected, the coin had no future after listing, the investors and celebrities made some money and then disappeared. The investors went back to their original media careers and continued to build their own digital stars, while the digital influencer ended up serving as VP of OKCoin for a year before disappearing from the industry altogether.
Despite everything, that winter was interesting because the boundaries between traditional finance and cryptocurrencies were still blurred, and there were no legal or financial restrictions preventing strange projects from emerging on a daily basis.
The End of the ICO Boom
The second recession came between the second half of 2018 and 2019. Many of the people I met during that period entered the market after the massive ICO wave, where the market reached unrealistic levels of bubble and overbuying. As this bubble collapsed, the market entered a long period of stagnation.
At that time, there was another wave of crises in the venture capital (VC) sector, as many startups that received funding in 2016 and 2017 had difficulty completing their next funding rounds. Therefore, some investors turned to cryptocurrencies to make quick profits, which saved some VC funds from collapse.
By the end of the bubble, there were only a handful of companies left in the space. Many projects discovered that after selling tokens, there was no sustainable source of income, and investors pulled out after making profits, prompting many to create their own crypto exchanges. At the time, the exchange industry was so crowded that any crypto conference would have more exchange representatives than media projects and developers combined.
Due to this saturation, exchanges began to compete fiercely with each other by launching new products and services. This was the year that futures trading exploded in popularity, and almost everyone had open positions on Bitcoin, leading to the emergence of countless “analysts” and investment recommendation services.
The collapse of the system built on “Lego”
The third recession period was during the second half of 2022 and 2023. During that period, negative news was constantly coming in, as the market witnessed the collapse of LUNA, the bankruptcy of FTX, and massive liquidations of ETH. At that time, I was busy launching my second startup, so I was not too shocked. I had sold most of my Bitcoin holdings at $60,000, and closed a new funding round with the participation of several investment funds.
But when I tried to collect money from investors, I received disappointing responses: some had their money frozen at FTX, others lost their jobs, and others did not receive financial approvals due to the crisis. After two months of failed attempts, I had to look for alternative solutions, such as developing small games or providing consulting services, but the market was not cooperating, and in the end, the team disbanded due to lack of funding.
After some reflection, I realized that I was overexerting myself at the wrong time, and that it might have been better to just wait quietly until the market recovered. But, as always, learning from mistakes was part of the journey.
Current market liquidity stagnation
We are now in the fourth recession, where most people are bored and waiting, unless they are playing on the Meme Coins wave and making profits from symbols like “Hippo” and “Lucky Cat”.
But I learned a lot this time, I’m no longer running a startup, I’ve moved to Japan where I now live in the suburbs of Tokyo. Here, I can connect with people in the field from different countries, which helps me stay up to date despite the market’s stagnation.
I know the market is not at its best, but this is the time to learn and develop yourself. Maybe one day, when you sit in front of your computer with no expectations, you will find that the bull market has quietly started. So, use this time to learn new languages, acquire new skills, and build new relationships, because they may be the key to the opportunities to come.
Article by Market Analyst @FORAB