Before I dive into the madness that ensued (and is still ensuing) in the cryptocurrency markets, I wanted to share some of things we worked on at the start-up.
We’re gearing up to launch our product, Castle Wallet, to the public. If you’ve talked to me over the past few weeks, you may have heard me share a similar sentiment. The thing with going public is that you start micro-analyzing every little thing that is possible on the thing that you are trying to make public. Whether it’s a speech that you are going to share on a podium or a button that will have users around the world clicking, the scrutiny that our team is applying is rigorous.
The things that we are working on before we go public is making things as simple as can be (e.g. creating a crypto + NFT wallet, importing your existing assets into Castle), making things load faster, and ensuring onboarding is intuitive. We’ve been finely tuning our website over the past few days to increase performance, uptime, and also to simplify the things that can be done with wallets on our website. We’re getting close.
Another thing about going live is there is a marketing play that you have to make as well. When thinking about marketing, our team is focusing on the various ways one can use our website, building out simple narratives that people can align with when thinking about using our website, and also ideating campaigns that we can pursue to get people onboarded to our website.
All of it is fun and exciting. The journey enables different realms of thinking and perspective which is a compelling place to be.
Moving on, I wanted to briefly touch on some of the macro events that are taking place in the crypto markets. In 2021, we had a rally that sent Bitcoin and Ether to approximately $69,000 USD and $4,600 USD respectively. Based on previous rallies, we knew that the market would top out around December 2021. Though this was the case, the market did not act accordingly. The people who’ve been in the crypto markets for a long time or have spent time analyzing previous market trends started taking some profits around then. The others stuck around because they were hopeful that we have hit a “new paradigm”.
To crash markets at the scale that the chart above suggests, there’s always stories and narratives that need to unfold. When crypto markets were smaller, all you needed was a handful of individuals or projects to fail to end the rally that took place.
Now that crypto markets are more popular and more people are getting involved (including institutions and countries), the narratives must become more compelling for rallies to end.
This week, we saw the death of a blockchain. In short, there was a blockchain called Terra. Terra positioned itself as programmable money for the internet to spend. Terra was a blockchain that a market capitalization of over $40,000,000 USD. The value that was captured on this blockchain vanished in under a week’s time. The reason for this is because Terra had a two token system, $LUNA and $UST. To create $UST, $LUNA must be staked and then you can create $UST against the staked $LUNA. All would be well if the borrowing ratios and fees associated were not to be exploited. However, someone came into the Terra ecosystem with a plan to do just that.
The rumor is that someone borrow a ton of bitcoin and used it to manipulate the price of $LUNA and $UST. They did it to the point that people lost confidence in the ratios / fees that were associated with the $LUNA and $UST creation mechanism and so people started pulling their funds out of the blockchain at an alarming rate. This led to more than a 95% crash in $LUNA’s price against USD and $UST to no longer be trading at $1 USD per token.
I think this is just one of the macro narratives that will be coming out to send several people in the cryptocurrency space packing (i.e. back to their old jobs, interests, gambling habits, etc.). We are entering a bear market (if we haven’t already). This market has been dubbed Goblin Town and the mayor is @bitcoinpanda69 (lol).
This is the time for people that are passionate about building, learning, and creating in the blockchain and cryptocurrency space to come together and stick together. The technology is still in its infancy and people should be experimenting with the new tools that are emerging because of the brains that are behind all these different blockchains. There is work to be done to make finance easier to access for all, there is work to be done to figure out how we can improve digital identity without centralized party. All of this is possible with cryptocurrency + blockchain networks.
Stick around, create something new, ask questions. It’s the best way to thrive in a bear market.