A look back into cryptowinter

Now that the worst of #cryptowinter seems to be over and new lows are less and less likely to happen, it is important to take a look back and analyse how narratives were actually affected by the bear market comparing their All Time Highs (ATH) and their respective Lows.

As always, the first, biggest and most battle tested crypto, aka #bitcoin (-77,38%), proved to be the best performing asset during cryptowinter beside a couple of exceptions. Most remarkable BNB (-71,24%). Bitcoin has already survived 4 cryptowinters and each time has suffered less and always came back much stronger. I bet in the next cycle that is just starting (we are in the early expansion phase), once we reach a new ATH, in the next bear market the new fall will be less than 70%, maybe not even 50% as more and more investors understand the Bitcoin cycle. If you want to know more about the Bitcoin cycle I have a 2020?article?about the topic which proved to work very well.

#Ethereum (-81,74%), the second most important, also performed much better than the average (-93,07%) but far from Bitcoin.

The only category that improves the average is Centralised Exchanges (CEX) tokens (81,67%) where all tokens had very good performance besides FTX for obvious reasons. Fundamentals should be in favour of Decentralised alternatives as they gained market share during cryptowinter and FTX proved that Decentralization matters. My guess to try to find why CEXs tokens performed much better than DEXs is that having direct influence on market making activities seems to be very helpful to control value. Another explanation is that these tend to be more regulated entities that are less probable dumping their own tokens and their founders have to have much more transparency in this regard.

#DeFi blue chips performed badly with an average loss of 94,14%. As DeFi showed huge resilience during all the black swan events, for me the only explanation for a poor performance compared to CEX tokens is that they just were too overheated and their communities were not very loyal (and also possible own project/team token sales).

Ethereum killers aka L1 performed not very well (-92,80%) and with very small differences between them. In a sample of 26 L1, only Solana, Harmony, Neo and Internet Computer lost more than 96% and only Gnosis, Cosmos, Quant, and Ton lost less than 90%, the others evolved very close to the average. Very little value investing was possible here as the bigger losers were more because of hacks and close relationships to FTX than because of real difference in performance. Tron was the best performer but I think is more related to having tight relations to CEXs so it could be considered a Centralized Exchange token in many ways. The conclusion here is that L1 faces tremendous difficulties to gain a share against Ethereum and only the ones with strong communities and high differentiation will be able to resist Ethereum and the competing Appchain and modular Blockchain alternatives.

Old fashion #Altcoins performed even worse than L1′s with a loss of 93,48%. Here is a wide dispersion as XRP, Monero and Litecoin performed better than the average but the others suffered some of the biggest losses. I bet this category is facing extinction as year after year it loses many representatives in the top rankings and there is a clear winner which is Bitcoin (+Lighting).

#Memecoins suffered even more as it was expected when there is no other fundamental besides FOMO. What I cannot understand is that the blue chips here (Doge and Shiba Inu), performed better than the average. My only guess is that they have tons of small “investors”?that bought a ticket in the lottery and didn't even spend the time to cash out the losses afterwards. In the case of Doge, Elon+Twitter have a strong influence on improving performance. In the case of Shiba Inu I guess there is a Big Whale behind that also provided support to help keep the project alive.

DeFi 2.0 Olympus like ponzies don't even need to be mentioned as they just disintegrated.

#Metaverse and #NFTs categories lost more than 95%. It seems to be that the hype was just excessive. New hot trends always suffer excessive overheating during bull runs.

#GameFi was the worst of all categories with a -98.51%. Again expectations were much bigger than the actual adoption. Axie hack also prevented the ecosystem from obtaining better results.

One category that I follow a lot is what I call Decentralized Resources (DeRe) which are projects that provide decentralized networks for shared computation resources like data or processor capacity like Filecoin, Theta, Arweave, Siacoin, Render, etc. The category lost 94,05% so it was weaker than my expectations, maybe because adoption is still in very early stages.

Uncollateralized lending projects like Truefi, Mapple, Centrifuge performed very badly (97,51%). In this case the main reason is because of the focus on lending to crypto companies which left significant defaults on these platforms. The real potential is in lending to the unbanked (users excluded from the traditional financial system) not in competing with super low interest rate lending.

If there were a #ReFi index, it would have performed not good at all (-96,86%) because of the super early stage of the space and I am very proud that only EthicHubs Ethix token performed above cryptomarket average (85,96%).?

EthicHub focus on creating an aligned community of hodlers and sustainable demand for Ethix proved the best way to surf the worst waves. When there is no FOMO, only sustainable demand remains.

In the case of Ethix, 4% of each loan goes to pay for the insurance which in our case means, buying Ethix and sending them to the compensation system one way or another. In addition, new loan originators and auditors have to buy Ethix and stake in their behalf in order to access the lending pool.

Conclusion

Top projects performed much better than all the others independently of the category; over 80% suffered more than a 90% price decrease during cryptowinter.

The small caps tend to have worse performance with some exceptions like Ethix which was one of the best performers.

Exchange tokens outperformed all other categories by a wide margin.

You can find more info about the data in the original post.