Sergey Nazarov, who co-founded Chainlink, believes the current crypto market downturn shows fundamental differences from previous bear markets because there have been no significant institutional breakdowns and tokenized real-world assets (RWAs) continue to develop. The market cycles operate as standard phenomena according to Nazarov who posted his statement on X. The current drawdown shows the complete development progress of crypto infrastructure according to him.
The global crypto market capitalization has decreased approximately 44% from its October high of $4.4 trillion because the market has lost nearly $2 trillion during the previous four months. Nazarov identified important distinctions between the current period and past market downturns despite the extensive market decline.
No major institutional failures this cycle
The market correction that Nazarov describes has not caused any major disruptions which would resemble the exchange and lending crises that occurred during 2022.
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He stated that the industry now possesses better methods to handle market fluctuations because no major risk management incidents have caused institutional breakdowns or created dangers to the entire system.
The present situation differs from previous periods when notable industry collapses created trust problems throughout the entire crypto industry.
RWA growth continues despite price declines
Nazarov demonstrated how real-world asset tokenization has developed into a major trend which enables people to use cryptocurrency for purposes beyond its normal trading activities.
According to RWA.xyz data, the total amount of tokenized RWAs that exist on blockchain networks has increased threefold during the last year. Nazarov explained this situation because on-chain deployment of real-world assets creates advantages that develop independently from crypto asset valuation changes.
“If these trends continue. on-chain RWAs will surpass cryptocurrency in total value, and what our industry is about will fundamentally change.”
Sergey Nazarov
He argued that RWAs and on-chain perpetual contracts for traditional assets continue to gain traction regardless of broader market weakness, proving their standalone appeal to institutions.
