What the bear market means for crypto and the web3
It was hard First say from EthDenver – the largest Ethereum developer conference in the world – that we are in a bear market. The conference earlier this month drew some 20,000 attendees to Denver, where hundreds of side events and impromptu get-togethers filled hip bars and restaurants day and night.
The sector has certainly slowed down: in 2022, the crypto market lost up to $2 trillion. But if you stopped to talk to an investor or founder, it became clear that many entrepreneurs and investors believe the market downturn is positive for the long-term health of the Web3 space. Projects settle into real value and foundation building rather than pump and dump programs and trendy NFT sales.
My conversations with EthDenver participants took place just before the value of Bitcoin hit its highest level since last June. Even with the cryptocurrency over $28,000, the price is still well below its all-time high of $64,000.
The developers and founders I spoke to celebrated muted parties as a good thing because it meant most of the speculators were gone. Even local Uber drivers noticed. Last year, they shuttled between much more extravagant parties. “You could just smell the money in the air,” one told me. “And this year it was more serious.”
Apply the brakes
The reduction in events and parties has been accompanied by a decrease in investment for startups, which now face a difficult time in attracting funding. The amount of venture capital for web3 companies saw a sharp decline in the fourth quarter of 2022, totaling $2.4 billion from $9.3 billion a year ago, according to Crunchbase. The number of funded web3 startups halved to 327 during the quarter.