2022 has been a torrid year for the cryptocurrency space and the term ‘crypto winter’ has been bandied around frequently. Volatile price fluctuations, crashes and several high-profile liquidations have created a perilous landscape for investors and enterprises alike.

Since 2021, cryptocurrencies have lost a staggering $2 trillion in value off the back of a significant rally. Bitcoin, for example, dipped up to 70% from an all-time-high price of $69,000 set in November last year.

Similarly, the collapse of the terra and luna stablecoins earlier this year added insult to injury for investors. The crash reverberated across the crypto landscape and has been a key factor in the downfall of several crypto companies and hedge funds, such as Three Arrows Capital.

Despite the challenges presented by this crypto winter, Humpty Calderon, Head of Community at Ontology, holds an optimistic outlook on the future of the global crypto community. Amidst the furore of recent events, it can be hard to lose sight of the positives and the opportunities that lie ahead.

This period, he believes, offers a chance for the global community to reflect, refresh and draw upon the resilience it has cultivated during the previous bull market.

“We are still early into this ‘crypto winter’ and this might take a year to come out of it,” he explains. “I personally think this might be a shorter cycle though, largely due to the demand from the community to continue developing.

“I think there’s going to be sufficient demand from the community to continue innovating and turn this cycle around, and I think that there’s now a built-in resiliency because of the clear vision and robust ideas that are coming out of the community.”

Cutting out the noise

Long-term, Calderon says that the hardship of this latest ‘crypto winter’ will provide a vital opportunity to dampen the noise, hype and hyperbole which has saturated the ecosystem in recent years and heighten the focus on impactful innovation.

“I think bear markets have always done a good job of shutting down the hype. There’s so much noise during a bull market that makes it hard to actually find a signal in between it all,” he says.

“So, when a change in cycle occurs like we’re currently experiencing, you’re going to actually start hearing the voices that are interacting, engaging and building the ecosystem in positive ways.”

Notably, Calderon says that changes in cycles help reinforce and solidify positive learnings which act as the foundation for future projects. This is a vital process and allows the community refresh the ecosystem and “get back to basics” focusing on values-led innovation.

“I think the projects that are going to succeed and thrive during this bear market are the ones that have good values and that share those values with their community. Which is a positive for the larger ecosystem,” he explains.

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This process isn’t new, Calderon adds. Reflecting on the previous bear market in 2018, the innovation, impactful projects and maturation of the ecosystem helped create all of the favourable conditions which made the last couple of years possible.

“Looking at the last bear cycle, and everything that we delivered in the previous bull, a lot of progress was made. So I hope that in the next cycle we’re going to see everything we’ve built come out and flourish in novel ways that are more engaging and more meaningful to the community.”

Collaboration, collaboration, collaboration

Bear markets also provide ample opportunity to drive collaboration and further develop and mature communities, which Calderon says will be crucial for the long-term success of the crypto ecosystem.

“During a bear market, collaboration goes through the roof, and cross-project collaboration surges,” he says. At present, Calderon says he is working across a “variety of projects” and has witnessed a real appetite for increased collaboration across the breadth of the community.

“Those projects that continue to build during this period are going to come out the other end stronger, their product offerings are going to be much more robust and the whole ecosystem will benefit due to this culture of shared development.”

Despite a sense of optimism, Calderon says it’s likely the ecosystem will see more casualties before this cycle passes. The global crypto community will shed weight and the landscape will change significantly.

“I think there will be fewer people still around in six months’ time,” he says. “The reality is that some people simply won’t be able to weather this storm and survive the current situation.”

This shedding phase isn’t all negative, however. In fact, it allows the community to cast off ill-natured projects and individuals. The sharks in the water who for several years now have capitalised on market conditions to make a quick buck and sour what is otherwise a vibrant, innovative ecosystem.

“There have been people operating in the ecosystem who are looking to scam, or take liquidity out of the community and into their own pocket,” he examples.

“This is difficult to stop, and there’s always going to be people that are not here for the right reasons. But they’ll be more obvious, and you’ll see a greater focus on people contributing to projects that match their values and deliver value back into the community.”

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