The Growing Pains of Crypto Startups: To Stay or To Go During a Bear Market?
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The Growing Pains of Crypto Startups: To Stay or To Go During a Bear Market?
Part of building a startup is discovering secrets that others don't know.
Navigating Web3 tides with focused insightsAuthor: Qiao Wang
Compiled by: TechFlow
Since the beginning of this year, at least 5–10 startups I’ve worked closely with have shifted away from cryptocurrency-related directions.
Pivoting is normal for startups, and most of these companies had reasonable justifications. For example:
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They weren’t growing and had no ideas for growth.
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They no longer felt excited about what they were building when they woke up each morning.
But I want to specifically discuss the idea of pivoting out of crypto. Because I believe nearly everyone has considered it—especially if you’re going through your first bear market.
To be honest, whenever a founder walks away from crypto, I feel a bit disappointed. But if the pivot makes sense, I wish them well—and if possible, I’d love to stay involved in their next journey. Still, there are important things to consider when making such a decision. The goal here isn’t to tell you not to leave crypto, but rather to ensure these factors are part of your decision-making process.
Bear Market Sentiment
The second half of a bear market’s second year is typically when market sentiment hits rock bottom. I’ve discussed this repeatedly in past tweets and podcasts because I’ve seen it happen—not once, but twice.
I’m not sure why this always happens, or why crypto cycles consistently last around four years. Maybe it psychologically takes 1–2 years to fully accept reality. Perhaps people always need four years to forget the euphoria and despair of the previous cycle, along with the lessons learned from it.
Regardless, this cyclical emotional pattern has become so predictable that I now critically examine whether my lack of conviction stems from real substance or merely emotional influence. I strive not to let emotions drive my decisions.
Minimizing Regret
Everyone I know who left crypto during the last bear market ended up regretting it. Every person who tried convincing others to abandon crypto during that time became a laughingstock when the bull market returned. I’ve spoken about this before.
Now, this time could genuinely be different—nobody knows for sure. But I aim to minimize the risk of future regret. One approach is setting a personal deadline: exhaust all promising crypto ideas before pivoting elsewhere. At least then, I can say, “I gave it a real shot.”
Nonlinear Growth
Many founders—especially those from FAANG, YC, or traditional startup backgrounds—leave crypto because they expect the kind of steady growth trajectory typical in Web2.
In reality, growth trajectories for crypto products are rarely smooth. Instead, most grow in steps. This is especially true for more “native” crypto products, largely due to the industry’s inherent cyclicality.
You might argue: “I don’t want to depend on an external factor beyond my control—the overall growth of crypto.” That’s a fair point. But the counterargument is that every successful crypto company in history had to embrace this very risk. Each was driven by an unwavering belief in crypto’s future. If Coinbase had abandoned crypto because they didn’t achieve 5% week-over-week growth, they’d never have reached where they are today.
Discovering Secrets
Part of building a startup is uncovering secrets that others don’t yet see. In crypto, I’ve observed that founders new to the space typically need at least 1–2 years to “discover the secret.”
Why does it take so long? My guess is that crypto is deeply counterintuitive and fundamentally different from Web2 or TradFi—where most founders originate. Too many give up on crypto before reaching that pivotal moment.
Worse, bear markets may actually be the best time to discover such secrets. With fewer bubbles and distractions, founders can think more clearly. They’re also more likely to find users who will stick around for the long term.
Unfair Advantages
Conversely, to succeed in a new industry, a founder must possess knowledge or insights that others lack.
So before chasing the next shiny opportunity, ask yourself a critical question: “Do I have an edge in this new industry?” If the answer is no, you’re probably better off staying in crypto—because after 1–2 years, you’ve already accumulated deep expertise.
You now understand why crypto matters. You’ve built a strong network. You’re immersed daily in user conversations.
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