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Daily headlines, price charts and social media today are full of stories about the great cryptocurrency crash and how all cryptocurrencies are traded in the red. The total cryptocurrency market cap has been below $ 1 trillion recently, for the first time since January 2021. Bitcoin and Ethereum have fallen 60% and 25%, respectively, and are trading at a minimum of 18 months. Several altcoins, including BNB, ADA, SOL and DOGE, are also in the running.
As a reference, it was only in November 2021 when the crypto market reached $ 3 trillion, with Bitcoin at its all-time high. So, financial experts consider this to be one of the worst market shocks in history. The crash started with the Moon-Earth fiasco in which investors lost their savings on Earth-Coin. It was later fueled by the Ukraine-Russia conflict, and the Celsius Network froze its cryptographic transactions.
Now, whatever the reason, the fact is that the crypto market is falling to a new low every day. This is not only causing panic waves among investors, but it is also causing a myriad of cryptographic projects to close their operations. And this is mainly due to the lack of vision and long-term utility among most of these projects.
Lack of utility in the cryptographic market
As of March 2022, there are about 18,465 cryptocurrencies. Although the market is dominated by the top 10 currencies, a new cryptocurrency project is emerging almost every day and today the industry is full of thousands of such projects.
The problem, however, is that most of these projects are of little or no use in the real world. Mostly, these projects were built to mount the cryptographic wave for short-term benefits. So in the event of a market crash, these projects have a hard time surviving and often close.
However, situations like these are not new. During the craze for dot coms in the 90’s, we witnessed the rise of countless projects that were trying to change the world. But like cryptographic projects, most dot-com projects at the time lacked utility and a solid business model.
So when the dot-com bubble burst, popular projects like eToys, 360Networks, Webvan, Pets.co. and several others were liquidated and declared bankrupt. However, projects like Amazon, Qualcomm, Microsoft, and eBay that survived the bubble have become technology giants with trillions of dollars in market capitalization.
Bring utility to the forefront
A single look at the projects that survived and the projects that did not survive the dot-com bubble gives a clear picture of how it all comes down to basic utility and long-term vision. The same goes for the cryptographic industry. It is certainly an unstable space.
And with only four percent of the population on board, even small changes in the dynamics of demand and supply can wreak havoc on the market. Accidents and historical highs are a common phenomenonthis will continue, more or less, until the industry matures.
However, projects that focus on solving real-world problems and providing a real benefit to investors have the opportunity to overcome these market conditions in order to survive whatever comes their way. The best example is Amazon. When companies at the time were focused on making short-term profits, Amazon’s business plan focused more on branding and profitability, and less on revenue.
The company was not profitable until the fourth quarter of 2001. But its focus on value-added and brand building has paid off in unprecedented ways, making Amazon one of the largest brands in the world today.
In the crypto market, Ethereum carries this cake. By introducing smart contracts to the world of blockchain, the network has created a basic utility base. As a result, Ethereum not only survived, but came out stronger after each bear race. This success of Amazon and Ethereum continues to show that people are more likely to stay with a product or service, despite market conditions, if it solves a problem in their life.
So the project for new cryptographic projects to survive the market crash is quite simple. The focus should be on solving real-world problems and creating brands, rather than making quick profits and short-term gains. With utility at the forefront, cryptographic projects not only have a chance to survive the market crash, but also consolidate as Amazon or Microsoft of the future.
Market conditions are excellent filters
The turbulent conditions of the crypto market today seem difficult to overcome. But on the other hand, these market conditions are kind of a big filter, eliminating projects that weren’t robust in the first place.
When the market recovers, which many cryptography experts believe it will, the industry is left with projects that have real potential to grow. In this sense, shifting the focus to utility is the key need and the only way forward for the cryptographic industry.
Jamie El-Kaleh is the Chief Marketing Officer of Mogul Productions, a DeFi and NFT marketing platform for the film and entertainment industry. Jamie is an influencer with over 21 million views and has managed several marketing projects for several years.
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Disclaimer: The opinions expressed in The Daily Hodl are not investment advice. Investors should do their due diligence before making high risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and transactions are at your own risk and that any losses you may incur are your responsibility. The Daily Hodl does not recommend buying or selling cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl is involved in affiliate marketing.
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