Cyrus Taghehcian Puts the Crypto Winter Into Perspective

Both the blockchain and the traditional market ebb and flow in cycles. The current crypto winter is not unprecedented. Early builders in the space are familiar with the cycles and have experienced more than one devastating crash. They know that the economy will bounce back stronger each time. 

But during the most recent explosive period of growth in the blockchain industry, adoption and popularity of the technology increased in parallel. With so many newcomers, it’s no surprise to see such widespread disappointment in the community. Not only is this the first bear market for many, but it is also their first experience in the financial world. After all, the largest ownership demographic is the 25-34 age range. 

Cyrus Taghehcian started building in blockchain back in 2016 while searching for solutions to problems in legacy finance. Since then, he founded SHOPX.co, an e-commerce infrastructure project powered by blockchain technology and NFTs. I interviewed Cyrus today to get an expert’s opinion on recent events. Hopefully, his experience will help calm some of the uncertainty in this difficult time. 

Grit Daily: What do you think caused this most recent crash and bear market?

Cyrus Taghehcian: The crypto bull run is officially over. It has been over since November, confirmed in May. Here we are in July and most of the disbelief is starting to dissipate. You could say that the crypto market is irrational. You could definitely say it was over-leveraged. The reasons behind the bitcoin bull cycles in the past have always been irrational to me. The slashing of the bitcoin mining rewards in half every 210,000 transaction blocks has been causing crypto to bubble about every 4 years since its inception in 2009. 

GD: What does the bear market mean for crypto and the economy at large?

Cyrus Taghehcian: Well, there’s good news. Real money is made in bear markets. The true builders are still here looking for funding. The scammers and noise have died down. There are distressed assets everywhere ripe for the taking. This crypto bear cycle will be like none other we have experienced before. In the US, we haven’t had a recession in 14 years. Those that study economics/history/money policy know that we are long overdue for a proper recession. 

GD: What is the benefit of sitting on the sidelines while prices are so low?

Cyrus Taghehcian: In the past two years, the US has added dollars to the market at an unbelievable rate. War. Sanctions. Global trade is greatly impacted.  Scarce assets will remain scarce. The price of anything is determined by its supply and people’s demand. People have access to more dollars than ever before. Now it is more important than ever to have dollars on the sidelines ready to enter the market as we start to enter this overdue recession. 

GD: How can young investors take advantage of current market conditions?

Cyrus Taghehcian: Multiple half-billion crypto companies have declared bankruptcy already. Their assets will be on sale. The S&P 500 is down historic year-over-year lows already. Almost every industry is seeing massive value wiped off the scoreboard. As whole markets and countries capitulate, this is where the good news lies. There are opportunities everywhere. A well-placed investment strategy could be life-changing for some and could mean generational wealth for others. We all have to start somewhere. Cryptocurrency presents an entirely new asset class to the world. Digital property will cause the greatest wealth transfer the world has ever seen.

GD: When do you think we can expect to see a reduction in the volatility in the cryptocurrency market?

Cyrus Taghehcian: While the space is still unregulated, many are still waiting to enter this newish sector. Bitcoin, introduced in 2009 after the last economic crisis, was the first solution to the digital money problem and the first cryptocurrency project introduced. In 2018 Gary Gensler, chairman of the SEC, said that meaningful regulations to cryptocurrency were at least ten years out, while teaching a course on blockchain at MIT of Cambridge, MA. We will need a mix of both internal and external regulations as well as to establish a standardized routine of best practices if we want to beat volatility.