Why the Crypto Winter Won’t Stop Web3 Adoption

2021 was a good year for cryptocurrencies. Although Bitcoin only managed to return 58.9%, the crypto market boomed in 2021, growing by a whopping 187.5%, and many of the top coins in the market offered up to five-digit percentage returns. For starters, Solana went up by 11,000% and Ethereum (ETH) grew by 399.2%, beating BTC by a wide margin. Last year also saw significant developments in the technology and infrastructure underlying the crypto market.

This year, however, has not been so positive for the nascent cryptocurrency market. Bitcoin and Ethereum prices dropped by more than 50% while dozens of other tokens lost up to 90% of their value. 2022 has indeed been a cryptocurrency winter, costing the crypto market $2 trillion in value and eradicating the life savings of several retail traders.

Analysts believe that the cryptocurrency winter won’t last forever, instead weeding out weak players and emerging even stronger with fewer but stronger and more financially savvy participants such as Fomo Lab. The crypto winter will also have little impact on Web3, the upcoming ‘third generation’ of the internet which will be built on decentralized blockchain technology. In fact, the foundations are already being laid for the third iteration of the Web and the development of a financial services sector that is based on blockchain and digital assets.

This is primarily due to blockchain’s decentralized nature that allows it to significantly enhance security, intensify privacy, and increase efficiency and speed. The last cryptocurrency ‘winter’ or fall in prices, which lasted for approximately 18 months, was followed by innovations, new asset classes, and industries like non-fungible tokens (NFTs), play-to-game earning, stablecoins, and decentralized finance (DeFi). Web3 will usher in a new age of the internet that is private, fair, decentralized, inclusive, and resilient thanks to blockchain’s privacy and efficiency-improving capabilities.

It will be backed by blockchain-enabled assets like cryptocurrencies, governance tokens, protocol tokens, exchange tokens, NFTs, securities tokens, stablecoins, central bank digital currencies (CBDCs), and natural asset tokens. Even though cryptocurrency prices have seen historic lows in recent months, industries are already starting to adopt the blockchain technology that allows cryptos to be decentralized.

Decentralized finance is especially poised to see major adoption as the digital economy grows larger and more prevalent. DeFi has shown much more resilience against downward market pressure compared to centralized shadow lenders such as BlockFi. Tools provided by Web 3 also stand to benefit governments and enterprises and help them create more value in the economy, thereby accelerating the adoption of Web3.

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