I have been doing a lot of thinking the last couple of days. Been feeling a bit down, so I have spent most of my time in bed, which gives me plenty of time to think. And one of the things I kept circling back to was the current state of the market, aka the Bear Market we are in. Or Crypto Winter if you like to be a little more dramatic. And I came to the conclusion that I don't think it is that bad actually. Let me tell you why.

First of I would like to explain some of the basics in case you are like me and just starting out in the crypto space.

Bear Market

This is the term used to describe the current state of the market. When the majority of all Coins or Tokens lose a lot of their value over a longer period of time it is referred to as a Bear Market. This is the opposite of when the coins go up in value, which is known as a Bull Run.

Both the term Bear and Bull are inherited from the stock market, investors there often use the terms Bullish or Bearish to describe their outlook on a project. And the same thing is true for Crypto. If you take a look at crypto twitter of the message feed on CoinMarketCap you will see a lot of comments simply saying Bullish or Bearish. Often it is either their thought on the project or it is describing how the price is evolving of a project. This project is looking Bearish and is often used when the value is dropping steadily over one or more days.

Crypto Winter can be seen as a longer version of a Bear Market. It can last years if you are unlucky. And it usually means that a lot of the value is lost in most coins and tokens.

Shit Coins

This is probably one of my favorite crypto terms. It is used to describe a Coin or Token that adds no value or function to its users. In general, a lot of coins start out like Shit Coins but then down the line try and introduce various projects or utilities for their users in an attempt to not die. Because that is basically what all of these coins end up doing sooner or later.

And now we have set the stage. 

Why I think Bear Markets actually are good

First of I would just like to say that I would not propose that we would be better of in a perpetual state of Crypto Winter. Just to make that clear, that is not what this is about.

I actually think that a Bear Market and an occasional Crypto Winter are good for the whole Crypto Ecosystem. This is because I think they serve a very important role. And that is the role of the Grim Coin Reaper (yes just made that up). And the way this works is a lot like in evolution where you have in most cases in nature a pressure to evolve and become more and more fit. After all, it is called survival of the fittest. 

And if you are not on the up and up of your evolutionary biology, fittest does not mean the strongest or smartest. It simply means the one who has adapted to their surrounding the best. As an example, if it suddenly becomes a lot colder, then animals that are either warm-blooded or have fur will do a lot better than animals that are cold-blooded.

The Crypto Ecosystem

Ok well, that might be nice for animals, but you might wonder what that has to do with crypto? Well if you look at the crypto marketplace as an ecosystem. Where then each cryptocurrency is an animal. Then you would have your top predators, these would be your Blockchains or Coins. Then you would have all the other animals, the smaller predators, the omnivores (the animals that eat meat or plants), and the last type is the herbivores or plant-eaters. And which token there that is wich, well it depends. But I will let you figure that one out for yourself.

But hold on, aren't I forgetting something? What about all the plants that the animals eat. Yes, you are correct. The plants that the animals eat. All that greenery. Was that too obvious of a clue for you, no? Well, the greenery or plants are the money. 

And when the weather is good and it only rains enough everyone is doing good. The animals have plenty of plants to eat, no matter how much they eat there is always more to eat. The predators are never hungry. Al the animals are growing bigger, fatter, and more numerous. Even the animals that appear to serve no real purpose can grow bigger and fatter and more numerous. And what is even more interesting is when we get a lot more new different animal species that plop up. Many try to fill a certain niche but a lot of them are just happy to walk around eating the green plants and getting fatter.

The strange thing however is that that is not really how nature works. This is probably a lot closer to how a zoo without the "do not feed the animals" signs up would work. Because what is filing the seemingly evergreen paradise is us. We invest our money in the different projects either because we believe in them and what they try to do or because we want to earn money or both.

Then Crypto Winter comes to town

Suddenly a Crypto winter hits. And all the nice green plants get covered up by a thick layer of snow. Little by little the animals are starting to get hungry. Some of the animals have however figured out that there is still some green grass under the snow. As long as you can scrape it away. It is not as much as before but still some. Some animals start to fight over what little grass is there. 

Some animals are more fit than others and can survive a Crypto Winter

It geet colder and colder, and the grass is harder and harder to get to. Then suddenly some of those animals that haven't really figured out how to survive in these new environments where they either have to fight for their food or know where to find it. They suddenly start to die...

Back to crypto

So if you have not figured it out yet. Let me put it more bluntly. The reason I think that Bear Markets and an occasional Crypto Winter are good is that they tend to cull many of the Shit Coins. At least the ones that are totally worthless. The reason why I think this is good is that I only see the Shit Coins as damaging to crypto in the long run. 

Personally, I would prefer that people invest their money into a project that actually has some use to it, even if that use is limited to within the crypto space for the largest part. The risk with most of the Shit Coins is that they tend to be Get Rich Schemes aka Pump and Dump projects. I sit on a lot of the project's tokens, I hype some people to invest in it, the value goes up and then I sell all my tokens taking virtually all the money and walking away.

This I think will only hurt the crypto space in the long run. Because if you end up investing in one of these projects for one or another reason, I would argue that you are not very likely to invest in another crypto project. As the old saying goes "fool me once, shame on you; fool me twice, shame on me".

With a Bear Market of Crypto Winter, a lot of people will think once or twice before they invest their money. So I think this in most cases will force them to look more into the project and research them more. Meaning there is less chance of them investing in a shit project. And with hopefully most Shit Coins dying these will be gone and will no longer be an option for the random investors either. 

And that is what I see the real and true value of a Bear Market or Crypto Winter lies. It is in its ability to be the Crypto Grim Reaper and kill these Shit Coin projects. Leaving us with hopefully the fittest projects left. 

Sure you can argue that Bear Markets bring good investment opportunities because of the lower prices. But I would argue that it is made even better by the fact many Shit Coins have been culled.

What are your thoughts on this whole thing? I hope the analogy was ok, even if it was a bit flawed. I still think it served its purpose. Am I correct in my assessment, or do you not think the Bear Market is helping anything and only hurting things? Or maybe I am overthinking the whole Shit Coin conundrum? Please share your thoughts on this in the comment section down below.

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