Chainlink co-founder Sergey Nazarov argues the recent crypto market downturn is unlike any previous bear market — there have been no major FTX-style collapses, and tokenized real-world asset (RWA) growth remains substantial.
Market cycles are normal, “but what is important is what those cycles reveal about how far the industry has progressed,” said Nazarov on X on Tuesday.
Crypto market capitalization has fallen 44% from its October all-time high of $4.4 trillion, with almost $2 trillion exiting the space in just four months.
Nazarov, however, did not appear concerned, highlighting two primary factors that separate this current bear market from previous ones.
Unlike previous cycles, such as the FTX and crypto lending failures in 2022, there haven’t been major institutional collapses during this drawdown, showing the industry can now handle volatility more reliably, he said.
“There have been no large risk management failures leading to large institutional failures or widespread systemic risks.”
RWA growth will drive institutions and infrastructure
Secondly, RWA tokenization and on-chain perpetual contracts for traditional commodities continue accelerating regardless of crypto prices, proving this innovation has standalone value beyond speculation.
Tokenized RWA onchain value has increased 300% over the past 12 months, according to RWA.xyz.
This signals that having real-world assets on-chain “is not tightly coupled to cryptocurrency prices but provides its own unique value that can grow irrespective of market pricing of Bitcoin or other crypto assets,” he said.
The surge hasn’t been reflected in the price of Chainlink (LINK), however, with the blockchain oracle and RWA-centric asset tanking 67% since its October peak, and is down 83% since its 2021 all-time high, trading at a bear market low below $9 at the time of writing.
Related: Crypto VC Funding Doubled in 2025 as RWA Tokenization Took the Lead
Nazarov also sees other converging trends reshaping the future of crypto.
On-chain perps and tokenization offer unique value, such as 24/7 markets, on-chain collateral, and real-time data, which is growing steadily. Institutional adoption will be driven by this fundamental utility, and infrastructure demand will surge as complex RWAs require more sophisticated on-chain systems, the Chainlink co-founder said.
“If these trends continue, I believe what I have been saying for years will happen; on-chain RWAs will surpass cryptocurrency in the total value in our industry, and what our industry is about will fundamentally change.”
Not all bear markets are equal
Bernstein analyst Gautam Chhugani echoed the sentiment in a Monday note, writing that we are experiencing “the weakest Bitcoin bear case in its history.”
“The current Bitcoin price action is a mere crisis of confidence. Nothing broke, no skeletons will show up,” analysts led by Chhugani said.
Jeff Mei, chief operating officer at the BTSE exchange, told Cointelegraph that this sell-off is different “in that it was caused largely by non-crypto catalysts.”
Those include fears that a faltering AI tech boom could cause stocks to crash, “compounded by the appointment of Kevin Warsh to Fed chair, who many believe will reduce liquidity in the financial system,” he said.
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