Crypto: Chainlink Co-founder’s 2 Reasons This Bear Market Feels Different

Chainlink co-founder Sergey Nazarov says the recent crypto market downturn has inadvertently shown “how far the industry has progressed.”

Chainlink co-founder Sergey Nazarov argues the recent crypto market downturn is unlike any previous bear market — there have been no major FTX-style collapses, and tokenized real-world asset (RWA) growth remains substantial.

Market cycles are normal, “but what is important is what those cycles reveal about how far the industry has progressed,” said Nazarov on X on Tuesday.

Crypto market capitalization has fallen 44% from its October all-time high of $4.4 trillion, with almost $2 trillion exiting the space in just four months.

Nazarov, however, did not appear concerned, highlighting two primary factors that separate this current bear market from previous ones.

Unlike previous cycles, such as the FTX and crypto-lending failures in 2022, there haven’t been major institutional collapses during this drawdown, indicating the industry can now handle volatility more reliably, he said.

Secondly, RWA tokenization and on-chain perpetual contracts for traditional commodities continue accelerating regardless of crypto prices, proving this innovation has standalone value beyond speculation.

Tokenized RWA onchain value has increased 300% over the past 12 months, according to RWA.xyz.

This signals that having real-world assets on-chain “is not tightly coupled to cryptocurrency prices but provides its own unique value that can grow irrespective of market pricing of Bitcoin or other crypto assets,” he said.

The surge hasn’t been reflected in the price of Chainlink (LINK), however, with the blockchain oracle and RWA-centric asset tanking 67% since its October peak and down 83% since its 2021 all-time high, trading at a bear-market low below $9 at the time of writing.

Source: CoinTelegraph