What’s in Your Bear Market Backpack?

From existential dread to blissful ignorance — reactions to Ethereum’s market slump vary across the board

AccessTimeIconJul 13, 2022 at 11:30 a.m. UTC
Updated May 11, 2023 at 7:09 p.m. UTC
Layer 2
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

As crypto markets plunged deep into bear market territory last month, discourse in some corners of the Ethereum ecosystem began to veer into the existential. Rather than searching for sky-high lending yields and the next non-fungible token (NFT) collection to rival Bored Apes, many among crypto’s Twitteratti – half-jokingly, half-seriously – set their sights on bigger questions: “What’s it all even mean?”

This article originally appeared in Valid Points, CoinDesk’s weekly newsletter breaking down Ethereum’s evolution and its impact on crypto markets. Subscribe to get it in your inbox every Wednesday.


And then there was Vitalik. On June 20, two days after ether crashed to its lowest price in over a year, Vitalik Buterin, Ethereum's co-founder and thought-leader-in-chief, penned an essay on his closely watched blog: “My 40-liter backpack travel guide.”

Never lacking insight, Buterin wrote a post containing dozens of useful morsels for traveling light and on a budget. He provided links to a flash-drive-sized portable shaver, recommended two different compact laptop stands (the lighter one was only “medium-effective”) and included pictures of his favorite Shiba-emblazoned sweatpants and Uniswap-themed socks. He also extolled the virtues of “Uniqlo maximalism” in a section dedicated entirely to the Japanese retail brand.

The two posts preceding Buterin’s travel guide were titled “Some ways to use ZK-SNARKs for privacy” and “Where to use a blockchain in non-financial applications?” In a tech-focused blog that tends to read more like academic literature than wikiHow, Buterin’s take on life as a digital nomad stuck out.

Its oddness was especially apparent given its timing. When Buterin published his hitchhiker's guide to backpacking, markets were tanking and commentators were calling the entire Ethereum experiment into question.

And yet, Buterin seemed not to be thinking of current events when he suggested that toilet paper rolls can make the perfect portable microphone stand.

Buterin’s public persona – or at least the one he projects out to the broader crypto community – is that of a builder. By Buterin’s logic, prices and Ponzis are merely a sideshow in a world where Ethereum's core technology – consensus mechanisms, zero-knowledge proofs, sharding, etc. – continues to progress.

Zaki Manian, a leading figure in the Cosmos blockchain ecosystem who has known Buterin for nearly a decade, tried to explain this builder mentality in an interview with CoinDesk.

“There's this tiny world that existed in like 2014 to 2015 of people where it was a bear market, no one cared, and there was no money. We all just hung out. It was super fun. Honestly, you can see from his tweeting that Vitalik, just the minute the bear market starts again, he's happier,” Manian said.

“We have this weird joy that we get from the bear markets where it's like, oh, OK, we can just, like, go back to being ourselves.”

Bull or bear, Buterin’s view – at least publicly – is that of an unfazed veteran.

Bear market utility for ENS

Of course, Buterin’s “all-is-well” posture does not exist in a vacuum. So how is everyone else responding?

As the contagion from the Terra stablecoin ecosystem collapse and the Celsius and 3AC insolvencies continue to wreak havoc across crypto balance sheets, blockchain companies large and small are bracing for crypto winter by laying off workers and cutting down expenses.

Investment activity overall has gone mum relative to the 2020 to 2021 bull market frenzy. And yet, even the more money-minded among us are finding new ways to stay engaged in Ethereum (and crypto) amid the turmoil.

This past month saw a major spike in investment around the Ethereum Name Service – the decentralized domain name protocol built specifically for the Ethereum blockchain. Increased ENS activity suggests that some crypto investors have found solace not by avoiding the ecosystem altogether, but by investing in elements of it that they expect to hold utility beyond just speculation.

ENS provides users with an easily readable name attached to their Ethereum-based crypto wallets instead of a long, complex address made up of numbers and letters. Many have compared ENS to the Domain Name System for web2 (like “apple.com”), while others have approached the purchase of .eth names as an investment, looking to trade or sell popular names.

And with low gas prices, users have seen it as the optimal time to invest in ENS domain names. Over the past week, ENS registrations have spiked nearly 200%, according to Dune Analytics user @makoto, with 30,000 new addresses added on July 4 alone, and 20,000 on July 7.

On the secondary market, in particular on OpenSea, trade in ENS names has also seen large activity. This is not the first time that ENS domain names have spiked. In April 2022, OpenSea saw a spike in its three-letter and four-letter domain names.

But the recent ENS hype comes as the address “000.eth” was bought for a record-breaking 300 ETH.

So why the current spike? Even though gas fees are at a two-year low, users and companies may be picking up .eth names – rather than CryptoPunks, Bored Apes or other non-fungible tokens (NFT) – because of their added utility.

Anderson Mccutcheon, the CEO of Chains, confirmed this view last week via a telegram message to CoinDesk reporter Shaurya Malwa, noting that the interest in ENS is “partly driven by the fact that it's one of the very few pure true utility NFTs that are visible, widely known, liquid and traded on OpenSea.”

The utility of ENS is in serving as a sort of extended domain name – making it easy for users to transact without the need to share complicated (and easy to screw up) lines of numbers and letters. ENS is also a bet on a future of decentralized identity, whereby users can log into apps and services via their crypto wallet at the click of a button.

This wallet-centric vision becomes all the more appealing when a wallet can be associated with an identity – like a screen name – rather than a string of random characters assigned by the Ethereum hivemind.

Of course, ENS also has a speculative component; there is only a set number of domain names that are unique, and over time one might hope that cutesy names like “cat.eth” or “dog.eth” get swept up by brands or collectors.

Could there be an element of FOMO? Absolutely. But clearly, users seem to think ENS domains have some kind of added value compared to the purely speculative side of the NFT market.

The recent ENS craze could be a meaningless blip, but it could also be a sign of what’s to come.

As the bear market drags on and Buterin and his contingent of developers continue to build the core technology underlying Ethereum, utility-minded plays like ENS – rather than purely speculative NFTs or decentralized finance (DeFi) money games – seem likelier to gain retail traction. How long utility will trump pure speculation, however, remains anyone’s guess.

Pulse check

The following is an overview of network activity on the Ethereum Beacon Chain over the past week. For more information about the metrics featured in this section, check out our 101 explainer on Eth 2.0 metrics.

Network health - Participation Rate: 97.38%-99.85%. Number of Validators: 406,370 active (+0.19%) and 211 pending (+12). Total ETH Deposited: 13,022,853 ETH (+0.20%). Share of Total ETH Supply Deposited: 10.88%.
(BeaconScan, Etherscan)
0712ARC image stopgap (1).jpg

Disclaimer: All profits made from CoinDesk’s Eth 2.0 staking venture will be donated to a charity of the company’s choosing once transfers are enabled on the network.

Validated takes

Celsius freed up $172 million of collateral from Aave and Compound.

  • WHY IT MATTERS: The liquidity-strapped crypto lender paid down $95 million of its debt to Aave and Compound, two of the largest DeFi platforms. As a result, Celsius reclaimed $172 million of collateral that was previously locked up. Celsius halted all customer withdrawals on June 12, downsized its staff and hired restricting experts. Read more here.

GameStop’s NFT marketplace is live.

  • WHY IT MATTERS: The platform allows “gamers, creators, collectors and other community members to buy, sell and trade NFTs,” the company said in a statement July 11. The marketplace launch comes after GameStop unveiled its digital asset wallet in May for storing, sending and receiving cryptocurrencies and NFTs. Read more here.

Former Terra network projects have started moving to Polygon.

  • WHY IT MATTERS: Almost two months after the Terra network collapsed, more than 48 Terra projects have begun migrating to Polygon, according to Polygon Studios CEO Ryan Wyatt. “For any project which wants to come from Terra to Polygon, we will be happy to provide them both financial assistance as well as technical assistance,” a spokesperson for Polygon told CoinDesk. “We’ll provide them developers and everything.” Read more here.

Lightspeed Venture Partners launched several new funds totaling more than $7 billion.

  • WHY IT MATTERS: The venture capital firm, which previously invested in Blockchain.com and FTX, unveiled three new U.S. funds totaling $6.6 billion and a $500 million India early-stage fund, bringing total committed capital across the company to $18 billion. On July 12 in a Medium post, the company wrote, “We’re more committed than ever to putting this new capital to work on our mission to help the world’s most extraordinary people build tomorrow’s companies, today.” Read more here.

Gnosis Safe rebranded as Safe and raised $100 million from investors.

  • WHY IT MATTERS: Gnosis Safe rebranded itself as Safe following a community vote to split off from Ethereum infrastructure builder Gnosis. The firm has secured $40 billion worth of digital assets and built out the infrastructure for the treasuries of major crypto players like 1inch, Bitfinex and Shopify. The funds raised are for the Safe Ecosystem Foundation, which oversees the ecosystem of applications and wallets using Safe’s smart-contract accounts. Read more here.

Factoid of the week

CoinDesk Research
CoinDesk Research

Open comms

Valid Points incorporates information and data about CoinDesk’s own Ethereum validator in weekly analysis. All profits made from this staking venture will be donated to a charity of our choosing once transfers are enabled on the network. For a full overview of the project, check out our announcement post.

You can verify the activity of the CoinDesk Eth 2.0 validator in real time through our public validator key, which is:


Search for it on any Eth 2.0 block explorer site.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Sam Kessler

Sam is CoinDesk's deputy managing editor for tech and protocols. He reports on decentralized technology, infrastructure and governance. He owns ETH and BTC.

Margaux Nijkerk

Margaux Nijkerk reports on the Ethereum protocol and L2s. A graduate of Johns Hopkins and Emory universities, she has a masters in International Affairs & Economics. She holds a small amount of ETH and other altcoins.

Sage D. Young

Sage D. Young was a tech protocol reporter at CoinDesk. He owns a few NFTs, gold and silver, as well as BTC, ETH, LINK, AAVE, ARB, PEOPLE, DOGE, OS, and HTR.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.