Former Coinbase Director: Crypto Winter Will Improve in the Second Half of 2023

Crypto winter is here. Having been on the Coinbase board until 2021 and leading IVP’s Series D round, and having lived through crypto cycles since 2013, here are my predictions on how and when the current crypto winter will end and what the future holds.

Cryptocurrencies will move lower in 2022 and will oscillate lower in 2023 until people lose confidence, which heralds the long-awaited spring thaw (described below) and the crypto macro situation will improve in the second half of 2023. Here is my reasoning:

Many VC and crypto investors are suffering from the paradox of looking for a sword on a boat, they expect BTC to rebound quickly, just like what happened after the Covid black swan in 2020, but this bear market is not caused by a black swan, it is the result of rising interest rates. Therefore, until interest rates stabilize, these investors will suffer.

Historically, it takes about 12 months from cryptocurrency peak to trough, and I expect this scenario to happen again, with BTC peaking in November 2021.

Bottom usually does not come during the fear and loathing phase, but comes after people’s patience and confidence disappear, when cryptocurrencies stop making headlines, and after speculators leave, a process that will take many months.

Human psychology affects this timeline, and cryptocurrency price action is still driven by curious and profit-seeking retail investors, who are not seeing the light of day right now. Therefore, now is the time to prepare and think. During a bull market, you update your technology in a timely manner to keep your servers up and running, while a bear market is for innovation and market share.

At Coinbase, we used the trough of 2018-19 to accelerate product innovation and challenge our existing assumptions. We made difficult decisions but emerged stronger when we succeeded.

Cryptocurrency will rebound as retail investors discover new applications and use cases, especially those enabled by innovations at the protocol and infrastructure layers (lower transaction fees, easier to build on), and IVP is excited to support the next generation of cryptocurrency innovators.

My immediate advice is: have enough cash to get through the next 30-36 months, and more importantly, have enough faith to get through this winter, don't waver or chase new non-crypto directions, the next bull run, crypto will be stronger than ever.