Panic or back off? What to think of cryptocurrencies right now

Panic or back off? What to think of cryptocurrencies right now - cryptocurrenciesThe cryptocurrency market has been hit in recent months and it appears that no tokens have been spared. Bitcoin and Ethereum are down despite being the largest cryptocurrencies, and formerly hot cryptocurrencies like Solana and Cardano have lost more than 70% of their value in the past six months. 

Right now it's hard to know if it's time to buy and hold to catch up or give up on the cryptocurrency revolution. After all, if even a stable currency like TerraUSD can lose 90% of its value in a week, what hope do the more volatile cryptocurrencies have? I believe the answer lies in a long-term mentality. 

Cryptocurrencies present very concrete problems

This sector is still quite young, very unstable and extremely difficult to evaluate. In the last week we have seen that algorithmic stablecoins can be teased, which can result in huge losses and undermine trust in the whole system. Meanwhile, the decline in Bitcoin has undermined the idea that it is an inflation hedge or a safe haven. Ethereum network updates have been delayed again. Solana's network periodically goes haywire and is slower than expected when it works. 

Are these reasons to panic or just acceptable growth difficulties? In general, I believe that the time has come to re-evaluate the thesis that was held when buying cryptocurrencies and whether that idea is holding up in reality. 

Buy quality, not quantity

Some cryptocurrencies have built up real and digital utility incredibly quickly. For example, according to Solscan - where you can view blockchain transactions and analytics on Solana - a year ago there were 49 daily active programs and now they are 951. 

The most valuable NFTs have been developed on Ethereum and billions of dollars in digital assets are traded every month.

In the downward phase, which can still be profitable with trading platforms such as Bitcoin system, I believe it is essential to buy quality assets, not just what has dropped the most. In cryptocurrencies, this means assets that are creating real and lasting benefits for a digital world. Ethereum and Solana are the undisputed leaders right now. 

What to avoid

I believe we will eventually see the decline of meme coins that provide little or no value to the cryptocurrency ecosystem. Dogecoin and Shiba Inu are great examples of these cryptocurrency projects of no significant value, and there is little likelihood that these tokens will be used for transactions or for the development of smart contracts. 

In market downturns, the strongest companies usually climb to the top, and I believe the same will be true for cryptocurrencies. 

Follow the developers, not the hype

I believe developer numbers are important to look at in cryptocurrencies. If cryptocurrencies go mainstream, it will be because developers build real utility on the blockchain. This utility began with non-fungible tokens (NFTs), but will extend to decentralized finance and other areas of the real and digital economy. 

Ethereum and Solana appear to have a clear advantage in attracting developers and building projects right now. That doesn't mean they are mature, but in the long run they are the type of blockchain that investors should be aiming for. I am not in a panic right now, but I am slowly buying large assets at lower prices than they were a month ago. This wallet building effort begins with Ethereum, Solana, and NFTs built on these blockchains.