The crypto markets are firmly in a bear market. There’s no way to sugarcoat the fact that cryptocurrencies have had a couple of difficult months, with bitcoin now trading at 56.5% below the all-time high set last November.
There is, however, a silver lining. According to the creator of Cardano Charles Hoskinson, most of the important building happens during market drawdowns.
Bear markets are for building, Hoskinson says
As of press time, gloom is everywhere as all asset classes get pummeled by stomach-churning macroeconomic headwinds. To make it worse, bitcoin is currently highly correlated with the equities market.
Yet at this time, as investors become increasingly frantic, it’s important to remember that the distress of bear markets is every bit as crucial to cryptocurrency’s evolution as bull markets.
Speaking to Yahoo Finance on Thursday, Cardano’s Charles Hoskinson noted that bull markets in crypto are “frustrating” as nobody wants to cooperate. “You have a lot of poaching, unrealistic wages, and unrealistic expectations,” Hoskinson explained.
Ultimately, as we have seen in the last couple of months, the crypto market always corrects after a period of parabolic price action. Hoskinson suggested in early May that cryptocurrencies had entered a bear market. But for him, bear markets form an essential component of the crypto sector: they are when the biggest and most successful projects are produced.
Hoskinson, who has experienced at least six bear markets so far, thinks such periods are “actually quite comfortable”. This is because a lot of significant advancements like smart contracts, decentralized finance (DeFi), and other transformative technologies actually came during times of anemic price action.
Cardano’s ADA tanks as major Vasil Hard Fork looms
Notably, the Cardano network is gearing up to execute the much-anticipated Vasil hard fork on June 29. Explaining the significance of this upgrade, the Cardano founder earlier said it will offer tremendous performance improvement to the network and its smart contract capabilities.
Hoskinson also posits that Cardano ADA’s transaction volume is growing dramatically. As such, developers behind the project are rolling out new updates in a bid to meet the rising demand every day.
He further pinpointed the non-fungible token sector as an unexpected area for growth, adding that approximately 40% of the projects built on the Cardano platform are related to NFTs.
Nonetheless, the price of ADA has not witnessed a marked increase despite the upcoming major technical upgrade. ADA is changing hands at $0.6102, down 4.61% on the day. The coin has lost over 80.2% since peaking in September 2021.