Capitulation: Several quantitative and technical metrics suggest the market correction of November 2022 resembles that of December 2018, which signified the bottom of that drawdown. While this may come as good news to traders, it also took nearly two years (December 2018-December 2020) from that capitulation point for Bitcoin to make new highs. For a breakdown of some of these metrics, check out our Quantitative Analysis section.

Contagion: Troubled lender BlockFi voluntarily filed for Chapter 11 bankruptcy protection in the U.S., after the collapse of FTX. In the summer, FTX provided funding to keep BlockFi as the company was going under. BlockFi joins Celsius and Voyager as high-profile centralized cryptoasset lenders who have failed. By contrast, DeFi platform like Aave and Curve continue to function normally as their loans are all overcollateralized and their inner workings are transparent.

Composability: One of the purported benefits of DeFi and Web3 is ‘composability’ meaning that different applications can seamlessly click together into an infinite array of solutions geared to different users and use-cases. For example, a decentralized exchange can connect to a lending pool so you can trade on margin. The reality is a bit more complicated, partly because applications are built on different and sometimes incompatible chains – kind of like two different rail gauges. Making cross-chain composability work will be challenging. The latest foray into this is Phantom Wallet, the main wallet for the Solana blockchain which is adding support for Ethereum and Polygon. Details are scant but expect more of these announcements.