TLDR:
– Crypto founders are preparing for the next bear market, expecting a downturn within 18 months.
– Companies are looking to capitalize on the current bull run by seeking strategic partners or expanding their product offerings.
Crypto founders are already preparing for the next downturn, with Elliot Chun, partner at Architect Partners, noting that many are anticipating another market drop within 18 months. The fear is justified, as the brutal 2022 crypto downturn caught many companies off guard, leading to bankruptcies and fraud incidents. However, some startups are leveraging the current bull run by tapping into Wall Street and venture capitalists’ interest in the sector.
Chun highlighted that firms are preparing differently based on their profiles, with some seeking strategic partners or expanding their product suites to attract institutional customers. While the industry is still fragmented regionally, companies are looking to establish a global presence to generate revenue and potential acquisition opportunities.
Despite the current market healthiness, concerns remain, particularly around liquid restaking protocols like EigenLayer. These protocols are attracting capital from VCs due to quick returns, but the sustainability and complexity of these projects raise red flags. Additionally, the rise of memecoins signals a shift in market dynamics, as retail traders seek opportunities without venture fund involvement. Ultimately, the market will determine the fate of these memecoins not aiming to advance the crypto space.
In conclusion, while the crypto industry is thriving, founders are preparing for potential market downturns by seeking strategic partnerships, expanding product offerings, and navigating through evolving market dynamics to ensure long-term sustainability.
