Bear markets ‘healthy’ for cryptos, say Bjelic and Perez

Co-founder of Polygon and Web3 Foundation CEO speak up for benefits of bear market

Bull and bear statues outside Frankfurt Stock Exchange, Germany                                 
Bull and bear statues outside Frankfurt Stock Exchange, Germany – Photo: Alamy
                                

A bear market can be “healthy” and “good” for the crypto world because “it’s going to clear the people who were there for the bad reasons”.

This is what is believed by Mihailo Bjelic, co-founder of Polygon (MATIC), and Bertrand Perez, CEO of the Web3 Foundation, who both spoke to CNBC while at the World Economic Forum (WEF) at Davos.

Perez explained that a bear market is good because it clears the crypto space of “the people who were there for the bad reasons”, leaving the “the legit ones” to focus on “developing on building and forget about the valuation of the token”.

Bear markets are also when “real services are built”, added Perez, because when “everything is great” during a bull market, “no one thinks about building, which is the wrong mindset”.

‘I don’t think it can hurt confidence’

Also interviewed at Davos, Bjelic told CNBC: “I don’t think it can hurt confidence, especially in the long term.”

The co-founder of Polygon explained a bear market meant “everyone will get more careful in the medium and short term, which was required and is necessary.”

Bjelic added that he believed the crypto market became “maybe a little bit irrational or maybe more reckless to a certain extent” and when a bear market comes a “correction is normally needed and at the end of the day healthy”.

Remove the deadweight and see the longer term

Almost echoing the words of Bjelic, the Twitter profile The DeFi Edge tweeted: “Bear markets are healthy for the growth of crypto. The deadweight gets removed and crypto can soar to new highs.”

Brad Garlinghouse, CEO of Ripple Labs, who also spoke with CNBC, used bitcoin (BTC) to explain why it's important to take a long-term view. He said that two years ago BTC was worth about $8,000 (£6,325) but is now worth around $30,000 (£23,722). Despite the recent crash in price, he added. “when you zoom out a little bit further and look at the long-term trends, I think you see that crypto is here to stay”.

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