Navigating the Challenges of Crypto Market

6 min readMay 8, 2023

As a crypto entrepreneur, you know that the crypto market is a rollercoaster ride, full of challenges and uncertainties. One moment you’re up, and the next, you’re down.

So, how can you survive and thrive in this volatile market?

Crypto markets have been unpredictable throughout the years due to black swan events nullifying years’ worth of progress within days. We wish there were a better way to say this, but there’s not: trust isn’t a word well-suited for crypto at least not yet. Because often, the most in-depth research falls short, leaving even the experts investing in disasters waiting to happen.

What started with Satoshi’s Bitcoin whitepaper in late 2008 has since evolved into a $1 trillion+ industry. Although the path hasn’t been easy still many crypto projects have managed to successfully navigate the market by focusing on some key points.

But before we get into how they achieved this impossible feat, let’s look at what went wrong and the economic turmoil that followed.

Crashing Finances: The Fall of Crypto Projects and Financial Institutions

The year 2022 was a landmark for the crypto world. The year started with a historic bull run that ignited a frenzy of excitement in the industry. However, this excitement was short-lived as the market took a sharp nosedive in the spring, causing many protocols, including Terra, to buckle under the pressure. What followed was a cascading ripple through the entire industry that took down hedge funds, lenders, and countless protocols. Some of the major collapses were Three Arrows Capital, BlockFi, Celsius and many more.

The challenges for the crypto industry continued throughout the second half of 2022, culminating in the collapse of FTX and its sister company Alameda Research in November.

However, the biggest shock of this year came on 10 March’23 when one of the largest US banks, Silicon Valley Bank, suffered a massive bank run and became the biggest failure of a US bank since the global financial crisis. This set off a chain reaction that led to the collapse of other major financial institutions, including Signature Bank and First Republic Bank.

Obstacles to Crypto Projects: Lessons for Future Success

Crypto collapses and financial distress can occur due to a variety of reasons, including economic downturns, poor management, fraud, and unexpected events such as natural disasters or pandemics. While it is impossible to predict exactly when and where these events may occur, there are some precautions that individuals and businesses can take to minimize risk and protect their finances.

Below are the reasons that may lead to crypto winter which affects the entire industry:

1. Lack of a long-term business model: Most cryptocurrency projects lack a use case that can solve a real-world problem. It frequently leads to low adoption and ultimately, project failure. The most important thing to remember is that you must have a prudent revenue generation strategy in place from the start.

2. Short-hype bandwagon: Most projects tend to spend a high percentage of funds on marketing to create short-term hype. It may lead to a rise in the value of the token shortly but as the hype goes down, so is the token value. Especially in crypto winter, spending a hefty amount on marketing, instead of technology and business development may lead to cost overhead.

3. Spend wisely: With so many project failures and risk to liquidity and its cascading effect. Institutional investors and VCs hesitate to put in their money until the market corrects. This leads to a cash crunch for the projects with less or no revenue source.

4. Beware of security breaches: Security breaches can lead to the loss of funds or sensitive information, eroding user trust and damaging the project’s reputation.

5. Regulatory challenges: Regulatory uncertainty or changes in regulations also pose a significant risk to crypto projects, particularly those that operate in multiple jurisdictions.

Strategies to Safeguard Your Crypto Project

Many crypto companies have gone bust over the years due to significant hacks, frauds or mismanagement, wiping away billions of dollars for less ROI, Liquidity management and finally leading to layoffs at crypto companies.

Ideally, what should a good project do to sail through this crypto winter? Let’s explore the options:

1. Don’t be a Myopic for Business Model

Revenue generation is a key part of any business. Without a steady cash flow, a crypto project will eventually be dependent on token value and funding. Creating a business model which has revenue sources from the real world makes a project self-sufficient and raises its valuation for future funding.

2. Focus on real-world application

A crypto token should have a practical use case and at the same time it should be grounded in its technological core. To develop a practical use case you should be able to find a way to incorporate it into at least one mainstream industry. Ideally, your solution should streamline offline processes such as reducing the costs of manual auditing in an oil refinery.

3. Cut the overheads

If you have the above two, it is important not to overspend on something which is not contributing towards revenue, product and technology during the crypto downtime. Crypto marketing is very expensive with less amount of ROI. The entire industry is full of ineffective advertising mouths which doesn’t guarantee you anything. While thoughtful approach towards marketing in the bear market and a real-work promotion in spring can give a better result. It’s not about spend or effort, it is about at what time effort and expenditure should be combined. Don’t forget to re-negotiate the terms with partners and vendors for the cost.

4. Learn and Adapt

It has happened throughout history: even the best things can become obsolete overnight. To stay on track, you should always be on the lookout for trends and be able to predict where the entire industry, or at least your sector, is headed. Think about how your project solution could be changed or expanded. Learn from your more successful competitors and pay attention to what industry leaders are talking about, but don’t fall for the hype. Some fads don’t last long.

5. Build in bear market and promote in bull

This should be the thumb rule for every crypto entrepreneur. First reason, promotions are costlier during a bear market as every project cut expenses and marketing agencies or influencers has to meet the end. Reason two, retail and institutional investors avoid putting their bets in the volatile and wintery market.

6. Save your Best for the Right Moment

Keep your arrow and shoot it when the time is right. When the crypto winter wind is blowing, it is better to avoid the announcement of large events. Continue the building, scaling and saving for sustainability.

7. Deal with the criticism

You will be criticized at some point, no matter what you do. You may arouse the regulator’s suspicions or annoy users; in either case, they will criticize you. Although it is impossible to predict future challenges, you can plan ahead of time what you will do to quickly resolve the issue.

8. Strengthen Communication

A steady communication process should be followed to stay connected with the loving community. If healthy communication is not possible, try to standardize the process.

The Bottom Line

To win a game, you don’t always need to be the best. Sometimes, it’s all about having patience, dealing with problems, and getting better at what you do. Even if the crypto market in 2022/23 is very crowded, it is still possible to become a trendsetter there.

The above-mentioned points are some of the often-overlooked factors contributing to business success and we are working towards implementing these strategies. Stay tuned & continue earning with Nitro Network, where everyone wins!

About Nitro Network:

Nitro Network brings affordable and secure IoT solutions for you. The company is building the largest decentralized private communication network (PCN) using the LoRaWAN IoT devices. These devices enable your gadgets to communicate using 3G/4G/5G technologies. This hyperconnected network will enable unlimited use cases in your everyday life. Participants of Nitro Network’s decentralized PCN are part of an inclusive ecosystem that they own, operate and earn from. Nitro Network’s PCN will be a game-changer and has its proprietary token, NCash, at its core. On Nitro Network, everybody wins!

References:

Navigating the Challenges of Crypto Market

Crashing Finances: The Fall of Crypto Projects and Financial Institutions

Obstacles to Crypto Projects: Lessons for Future Success

Strategies to Safeguard Your Crypto Project

The Bottom Line

Written by Nitro.Network