Blockworks’ founder claims crypto headed to ‘lifeless’ stage 3 bear market Blockworks’ founder claims crypto headed to ‘lifeless’ stage 3 bear market
Jason Yanowitz recently described the three stages of a bear market and said the market is currently at stage two. Things will get depressing before the market bounces, and the ones who stay will be rewarded.
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Updated: Jul. 11, 2022 at 9:16 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Blockworks‘ co-founder Jason Yanowitz identified the three stages of a bear market and said we’re currently at stage two, experiencing drastic price falls. The market will only get stagnant and depressing before it picks up again, and those who don’t quit will be rewarded.
He advised the community to remember why they started and be resilient at times like this.
Stages of the bear market
Yanowitz’s description of the three stages of the bear market primarily relies on a blog post written in 2018 by the co-founder of Union Square Ventures, Fred Wilson.
Stage 1: The Unwind
Yanowitz described the first stage as the unwind, where the market doesn’t feel bearish. Investors feel excited and hopeful.
High levels of greed still hold on from the previous bull sentiment,ย assets remain above their support, and companies are doing okay. The first stage is the one where everything seems normal.
3/ Stage 1 doesn't *feel* like a bear market.
It feels like prices have pulled back to "realistic" valuations.
Investors continue allocating, builders keep building…
In general, life is good. Only the weak hands sell.
— Yano ๐ช (@JasonYanowitz) June 13, 2022
Stage 2: Forced Capitulation
Stage 2 is where bearish signs start showing themselves brutally. The excitement from the first stage turns into anger.
At this stage, prices fall drastically and crypto critics begin the age-old chant of “I told you so.” The overall sentiment turns very negative โ very fast. Investors will choose to sell out at the smallest price peaks.
The companies have to take measures to survive, such as choosing to downsize. Those who rely on tokens for funding will have a particularly hard time.
Yanowitz said:
“In Stage 2, diamond hands become forced sellers. They sell not because they want to, but because they have to. Celsius doesn’t want to sell โ they might have to sell. There will be more funds, companies, and individuals like Celsius.”
He argued that the market entered stage two after the LUNA crash.
Stage 3: Bottomless Exhaustion
Stage 3 is when the market becomes lifeless. The anger turns to silence, where there are no temporary price peaks, no commentaries, or no emerging new projects.
9/ During Stage 3, you'll want to walk away.
Regulators will kick us while we're down.
Your favorite Twitter degens will go quiet.
Web2 investors will quietly stop allocating.
Talented builders will leave.
Companies will shut down.
You'll question every assumption you had.
— Yano ๐ช (@JasonYanowitz) June 13, 2022
Remember why you started
Yanowitz warned about the depressing stagnancy of stage three and advised remaining resilient. He reminded the current community that they are early adopters, and it will take decades before the new world is properly settled. Until then, the community must endure such crypto winters.
He said:
“If you’re a company, do whatever it takes to get through. If you’re a builder, stay interested. Find other builders. Buidl with them. If you’re an investor, develop your own theses. Take bets on people you believe in.”
He finished his thread with a list of reading material that he recommends every crypto enthusiast should re-visit at every opportunity.
1/ In bear markets, it's crucial to remember why you're building.
I'd recommend reading the classics this week.
Here's a running list of my all-time favorites ๐งต
— Yano ๐ช (@JasonYanowitz) June 13, 2022
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Posted In: Analysis
Author 
Zeynep Geylan
Zeynep is an academic who turned to crypto in 2018. Originating in social sciences, she is especially interested in the social impact of blockchain and cryptocurrencies and strongly believes in their transmuting power.
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Blockworks
Blockworks is a financial media brand that delivers breaking news and premium insights about digital assets.
Jason Yanowitz is the Co-Founder of Blockworks Group, an events and media company that sits at the intersection of digital assets and traditional finance.
