Beautiful Virgin Islands

Tuesday, Jun 03, 2025

0:00
0:00

The Crypto Bear Market Could Last Two Years, Top Investors Say

Cryptocurrencies are famous for their wild price swings, and in their short history, they’ve gone through multiple cycles of scorching-hot summers followed by frigid, long winters. The last downturn began in early 2018 and lasted about two and a half years.
Over the past three months, with inflation spiking and recession concerns spreading, bitcoin has dropped from a high of $48,000 to roughly $21,000. Today, some top investors think we’re in for another painful, extended period of low prices.

“The next two years are going to be really rough,” says Avichal Garg, a managing partner at Electrical Capital, a crypto investment fund with more than $1 billion in assets. His fundamental views on the industry’s promise haven’t changed. “New software developers are coming in, and we're seeing more and more high-quality founders. We see Web2 executives from Facebook and Google coming in at a faster clip,” he says. But one big factor has backers particularly nervous: “It's the first time that crypto and Web3 has existed in a macroeconomic bear-market environment, where there's potentially a recession happening next year,” Garg says. (Bitcoin was created in early 2009, shortly before the Financial Crisis ended.)

Alex Pack, a managing partner at Hack VC, a $200 million (assets) crypto venture fund, agrees. “One to two years is what everyone is saying ... And that's what we are telling our portfolio companies–make sure you have two years of runway.”

Beyond broader economic worries and the recent collapse of “stable coin” TerraUSD, major doubts have spread about crypto lending platform Celsius. After it recently froze withdrawals, many are questioning its solvency. “Always be skeptical, even in a bull market, when any of these platforms are promising really high interest rates,” says Linda Xie, co-head of crypto fund Scalar Capital. “Sometimes this sounds too good to be true, and that's because it is. There may be a lot of leverage and high-risk activity going on behind the scenes.”

Despite the many reasons for apprehension, crypto investors seem to be more optimistic so far than they were during the last downturn of 2018 to 2019. “There was a genuine worry among many investors and builders that crypto as an asset class wouldn’t come back from its 2017 highs,” Pack says. That fear evaporated in December 2020, when bitcoin topped $20,000. Pack and Xie think the industry is in a stronger place now because there are more cryptocurrency use cases and users. For example, digital art NFTs (nonfungible tokens) have attracted millions of buyers. “Decentralized finance” applications, such as software that lets people earn interest on deposits, have grown steadily, although some have also flamed out in a spectacular fashion.

What needs to happen for prices to bounce back? The stock market needs to recover, some say. “We would need to see equities turn around before real capital flows back to bitcoin,” says Joshua Lim, a managing director and head of derivatives at crypto prime brokerage Genesis. Tarun Chitra, a digital asset investor and the CEO of crypto risk-modeling startup Gauntlet, has a similar view: “I expect crypto and growth equities to continue to be correlated for 12 to 18 months.”
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
China Accuses US of Violating Trade Truce
Panama Port Owner Balances US-China Pressures
France Implements Nationwide Outdoor Smoking Ban to Protect Children
German Chancellor Merz Keeps Putin Guessing on Missile Strategy
Mandelson Criticizes UK's 'Fetish' for Abandoning EU Regulations
British Fishing Boat Owner Fined €30,000 by French Authorities
Dutch government falls as far-right leader Wilders quits coalition
Harvard Urges US to Unfreeze Funds for Public Health Research
Businessman Mauled by Lion at Luxury Namibian Lodge
Researchers Consider New Destinations Beyond the U.S.
53-Year-Old Doctor Claims Biological Age of 23
Trump Struggles to Secure Trade Deals With China and Europe
Russia to Return 6,000 Corpses Under Ukraine Prisoner Swap Deal
Microsoft Lays Off Hundreds More Amid Restructuring
Harvey Weinstein’s Publicist Embraces Notoriety
Macron and Meloni Seek Unity Despite Tensions
Trump Administration Accused of Obstructing Deportation Cases
Newark Mayor Sues Over Arrest at Immigration Facility
Center-Left Candidate Projected to Win South Korean Presidency
Trump’s Tariffs Predicted to Stall Global Economic Growth
South Korea’s President-Elect Expected to Take Softer Line on Trump and North Korea
Trump’s China Strategy Remains a Geopolitical Puzzle
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
×