General

5 Sectors To Watch During Crypto Winter

The crypto bear market is regarded as an unfavourable position of the crypto market where cryptocurrencies suffer a major price decline, investors lose more money to the continuous depreciating coins and potential investors sit on the fence while speculating on the next step to take.

It is simply a period of uncertainty in which the market can either degenerate into a more delicate bearish position or make overturn to a bullish position.

However, despite the uncertainties, it’s strange to imagine that some people look forward to these bear trends in the crypto market. In fact, the bear position is the then position held by many developers and project creators who take advantage of the depressed bear crypto market environment.

Ideally, the bear market gives a chance to accumulate more cryptocoins at lower prices and build a strong portfolio for bullish trend reversal which will likely make one very wealthy. 

Let’s take a look at five sectors of the blockchain ecosystem where the best opportunities for wealth accumulation abound in the bear market.

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5 Sectors To Watch During Crypto Winter

1. Gaming:

The cryptocurrency ecosystem comprises many sectors of which of them is the gaming sector.

Gaming is a very important life aspect of any person as it keeps them engaged with the thrills. In the same vein, the gaming sector of the crypto ecosystem has never failed in discharging this duty to users during the current crypto winter.

Many play-to-earn gaming platforms emerged to help users earn extra cryptocoins by engaging their gaming passion on the platform. 

An example is the Axie Infinity (AXS) platform which was the spotlight of blockchain-based gaming during the 2021 bull cycle. It has also initiated the emergence of similar protocols such as the “move-to-earn” and learn-to-earn’.

According to  DappRadar, some of the top games with active users are Alien Worlds, Splinterlands and Farmers World, all of which operate on the WAX network.

However, Axie Infinity is the top game based on the value of assets held in its smart contract.

Some other games that are yet to gather momentum are Illuvium and Aavegotchi. Some tokens that represent gaming ecosystems are Enjin Coin (ENJ), Gala (GALA) and Ultra (UOS).

2. Metaverse and NFT Launchpads:

A good sector that should not be neglected in matters of wealth accumulation and investment is the metaverse.

The metaverse has recently gathered global recognition and a widespread appeal in modern society and efforts are continuously made to integrate it into our daily lives.

One can think of the metaverse to be a virtual reality representation of real-life life data and interaction built on blockchain technology. That is to say that people can interact and socialise as in real life, in the digital space.

The concept of metaverse has been a very famous topic of discourse in the crypto community and large brands and investors are already seizing the infant opportunities of the metaverse to invest largely in the innovation.

In addition to that, most of the metaverse projects have integrated the use of NFTs in their projects. Investors are issued NFTs as proof of ownership or investment in such projects. 

Some of the most developed and adopted Metaverse and NFT platforms currently in operation are The Sandbox (SAND), Decentraland (MANA) and ApeCoin (APE)

3. Social platforms:

The power of social media is undeniable, though some people still believe social media has little or no influence on people’s-decision. 

Social engagement platforms are a sector of the cryptocurrency ecosystem that suffered a good establishment and a refined method of engagement but still represent one of the best opportunities for increasing engagement. Some of these platforms are Twitter, Facebook and Reddit.

Before the above-mentioned platforms came to light, the previous front runners in the social media space like Steem and its community-driven offshoot Hive were never able to achieve massive engagement and adoption of the social media community.

Though it seems there’s no other protocol currently in operation which will help crack the code, attract and engage a lot of users for the long term, some current events in the larger world show that social media remains in need of an openly accessible community-focused platform.

4. Layer-1 protocols:

Layer-1 (L1) protocols are the bedrock of most cryptocurrencies.

Much of the cryptocurrency ecosystem is built on them and they create enabling space for the existence of other sectors of the market. Examples of Layer-1 protocols are Bitcoin (BTC) and Ethereum (ETH).

However, currently, the available options for launching other protocols on the Bitcoin and Ethereum networks are limited. Also considering Ethereum has a problem with scalability which automatically makes transactions on the network quite costly and also slow processing time.

Moving forward, the limitations of the Ethereum network presents a good opportunity for other L1 protocols to establish and amass a good percentage of the market share.

The total revenue generated by a protocol is one metric used as a determining factor as to which networks see the most usage.

According to  Token Terminal, the top five L1 protocols in terms of total revenue over the past 180 days, excluding Bitcoin and Ethereum, are BNB Smart Chain (BNB), Avalanche (AVAX), Helium (HNT), Fantom (FTM) and Solana (SOL).

5. Layer-2 protocols:

The scalability limitations of the Ethereum network which further led to high transaction costs and slow processing time leave an opening for layer-2 protocols to fill the need. This is done by helping to reduce the activity that occurs directly on the Ethereum blockchain.

According to L2Beat, which tracks the stats on the top Ethereum L2s, Arbitrum is ranked number one in terms of total value locked (TVL), followed by Optimism and dYdX.

Polygon (MATIC), though omitted from the list provided by L2Beat for some unknown reasons, is one network that remains the most highly adopted L2 in terms of active wallets and protocols launched.

Polygon (MATIC) currently has a total value locked (TVL) of $1.59 billion, according to data from DefiLlama.

The main L2 solution currently triggering increased inflows to the Bitcoin network is the Lightning network, though there’s no token involved with the protocol.

Users can choose to run a node instead if they want to support the network or earn passive income.

Conclusion 

The bear market always poses to be a good entry point for most developers and investors from the various crypto sectors. Studying the activities of these sectors during this period will give you a clear insight into the path to follow to soar to new heights in the next bull cycle.

 

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