Crypto Winter Is Here. The Weak Will Die, and the Strong Will Eat Their Bones - Transcripts

June 19, 2022

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On today’s show, CoinDesk’s Chief Insights Columnist, David Z. Morris, takes a look at the coming crypto winter and what to do about it. This episode is sponsored by Kava and BCB Group. Read the full story here. This episode was edited & produced by Adrian Blust with original music by Doc Blust & Colin Mealey - Kava lets you mint stablecoins, lend, borrow, earn and swap safely across the world’s biggest crypto assets. Connect to the world's largest cryptocurrencies, ecosystems and financial applications on DeFi’s most trusted, scalable and secure earning platform with - BCB Group is the leading business banking partner for the digital assets industry. We provide the rails to move money and a gateway for crypto to FX markets at scale. Our mission is to connect and bank the global crypto industry. Find out more by visiting See Privacy Policy at and California Privacy Notice at


this episode of markets Daily is sponsored by cava and BCB group.

It's sunday june 19th 2022 happy juneteenth folks and this is markets daily from coindesk. I'm Annabi Levin here again with your weekend story on today's show, we're taking a look at the coming crypto winter and what to do about it and just a reminder, coindesk is a news source and does not provide investment advice. Mhm Today's feature story is an opinion piece from David Morris coindesk chief insights columnist. Today's piece is entitled crypto winter is here, the week will die and the strong will eat their bones. It has been a week of whiplash for us here at Coindesk. On the one hand, we just scored an immense triumph as an organization with consensus 2022 which wrapped up on Sunday the conference was a sprawling frenetic four days that proved how intense and broad the interesting crypto really is, but also if I can pack my fellow coindesk is on the back proved once and for all that we are the media organization at the center of it. On the other hand, of course, in the mere few days since consensus ended, we've seen an incredible route in crypto markets with Bitcoin and ether racking up their biggest losses in quite some time. There are now signs of a liquidity crunch and maybe even insolvency at the centralized lending platform. Celsius networks arguably the other shoe dropping after the luna and ust unwind trouble at Celsius in turn has traders worried about staked an important bond like token related to the ethereum two point oh merge, There are also apparently liquidity issues at three arrows capital and to top it all off crypto exchange coin base just laid off 1100 people. There's so much to say about this moment. We here at coindesk will be saying all of it in the coming weeks and months as we help you navigate the crypto crisis. But before the dominoes started toppling at scale, I was planning for this column to be about the amazing nous of consensus and I still think that's important because the vision and passion that was on display in austin texas last week is exactly how we find our way out of this mess.

Above all consensus was a big tent, huge in fact literally and figuratively we drew 17,000 attendees to the conference itself and another 3000 attended satellite events. It was the south by southwest of crypto complete with concerts from disclosure and big boi and it will be next year too. More to the point though, the breadth of programming and perspectives was mind boggling. For instance, I was on my way to moderate a panel and had a few minutes to spare so I stuck my head in a random auditorium and there was facebook whistleblower Francis hogan who has little crypto involvement. Aside from a shared concern about data harvesting, I got to see sci fi author, neal Stephenson and technologist Jared Loughner in conversation with coindesk contributor leak. Alan Butler, I myself got to interview one of the Baylor university Bitcoin researchers and also had a delightfully unhinged conversation with chris Gabriel who goes by a meme analysis about mathematics fraud, black magic and the C. I. A. Crypto it seems clear is becoming a shelling point for various stripes of dissatisfaction with the status quo. A Schelling point is very loosely a symbol, sight technology or other focal point that draws people together to collaborate without explicit communication or coordination. Crypto has seized society's imagination and become a site for transformative change. Even if we're not clear where it's headed.

Stay tuned. After this break we'll be back with the bad news Plus a look at what's to come, we'll be right back

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Welcome back! And this is the part where we get to the market crash. I feel immense empathy for those who are losing their jobs right now and for those who will in the coming days and weeks I've been there, I lost my job as a result of the 2018 crypto crash. But there are also immense positives to a crypto downturn. The products failing particularly luna and Celsius were substantially illusory all along driven by inflated on sustainable returns. It's now becoming clear that the profits depositors in these systems received were essentially a game of musical chairs using venture capital money publicly traded coin based, meanwhile, has admitted that it made a major strategic mistake by hiring too fast. Despite, as I pointed out when it went public in 2021 the brutally cyclical nature of the exchange business and three arrows, A highly influential venture firm appears to have been heavily invested in some of the most speculative and risky projects in the market. I know it's a terrible cliche, but it's nonetheless true, all of this carnage is in fact the good news. So while we'll certainly see more unwinds, withdrawal freezes and mysterious silences over the next few weeks or even months. The market crash will be hardest on companies and investors who have made poor decisions as crypto expanded and hype built over the past two years, fundamentally worthless projects proliferated, minting their own ephemeral tokens and convincing uninformed retail traders and high profile veteran hedge fund managers alike that they had value. This sort of garbage has crept into crypto during every expansion cycle. The current downturn is the holy cleansing flame that will eliminate it in the same way that an old growth forest needs a good fire every once in a while to renew itself.

Getting rid of fake trash built on hype and a cult of personality means that while there may be less money sloshing around for the next year or so, a much higher proportion of that will go to credible projects. Those who are looking to build something based on a solid idea will thrive in this environment. Especially because unlike in 2018 it seems like there will still be substantial venture capital available as an example. Consider that Open sea which generated 20 billion in N. F. T. Sales in 2021 was founded in 2017 with a lot of building through 2018 and 2019. That was not just during a fallow period for crypto, it was before most people had heard the term non fungible token. So there will be other open seas, other ethereum name services or E. N. S. Other genuinely useful and profitable services or technologies developed during the coming bear market.

Or I guess we can say now the crypto winter, The best way to survive or thrive will be to do that building and position yourself to reap the benefits during the next big surge. And remember that these downturns are always shorter than they seem personally after losing my crypto job in 2018. It was less than two years before I was back in the industry and having even more fun than before. Mhm. And that's our show for today. Thank you very much for listening. We'll be dark tomorrow with full episodes returning on Tuesday. This episode was edited by Adrian Blust and just a reminder that Quinn desk is a new source and does not provide investment advice.