Staying Positive During a Crypto Downturn: Advice from the Experts

Stop watching the price. Start watching the builders.

I spent the last two years building Nika Finance through one of the most volatile stretches crypto has seen. When we started, the market was up. Six months later, it wasn’t. A year after that, it recovered. None of that mattered to what we were building. We shipped a non-custodial mobile app that routes perpetuals through Hyperliquid via builder codes and prediction markets through Polymarket. We closed a $2M angel round during a period when most teams were laying off half their staff. The work kept moving because the work was never about the price.

Here’s what I learned: downturns are structural resets. They clear out the teams that raised to burn capital on a token launch. They clear out the users who showed up for incentives and left when the incentives dried up. What remains is the actual product surface and the people building it. That’s when you learn what’s real.

The advice I give anyone feeling discouraged right now is this: ignore price action and start evaluating what’s actually getting shipped. Is the team still building? Are they fixing bugs in days instead of quarters? Are they adding features that make the product materially better to use? Are they focused on long-term retention or short-term extraction? Those signals tell you more about where value will accumulate than any chart.

The teams that survive downturns are the ones that treat them as permission to focus. When the noise clears, the only thing left is product quality. If you’re holding a position in something with real product momentum and a team that’s still shipping, the downturn is working for you, not against you.

The positive outlook comes from recognizing that this is exactly the environment where the next durable winners get built. You cannot build a world-class product with a slow organization. The teams that win are the ones that stay closest to users and ship faster than everyone else. Downturns force that discipline. The teams that can’t operate that way exit. The ones that can, compound.

Discouragement is usually a position-sizing failure, not a market failure. If a 70% drawdown changes your behavior, the allocation was never sized to your runway. I hold a defined safety stock, so a downturn never forces a sale at the wrong price. Bitcoin’s prior cycles each included a 70%-plus drawdown and each resolved higher. The investors who lost were the ones who had to sell. Many industry bitcoiners frame this as time preference: the asset rewards the patient holder and punishes the leveraged one. I call it the Runway Rule — hold nothing you can’t hold through a full cycle.

“One thing I often remind traders is that today is not the last day of the market. I’ve been in financial markets for more than 20 years, and I’ve seen enough cycles to know how easy it is to feel that the current rally or downturn will last forever. It rarely does.

When crypto falls sharply, the temptation is to recover losses quickly, and that’s often when emotion starts replacing judgment. Keeping a positive outlook means maintaining perspective, accepting that downturns are part of markets, and remembering that you don’t have to react to every move.”

I’m Runbo Li, Co-founder & CEO at Magic Hour.

Stop watching the chart. Seriously. The single best thing you can do during a downturn is redirect the emotional energy you’re spending on price action toward building something, learning something, or earning something new.

I call this “productive distraction with compounding upside.” When crypto crashed in 2022, I didn’t sit around refreshing CoinMarketCap. I started experimenting with AI video tools as a side project. I was posting content daily, learning new skills, building an audience. That side project became Magic Hour, which now serves millions of users. The crypto I held eventually recovered too, but the point is I wasn’t paralyzed waiting for it.

Here’s the pattern I’ve seen with every successful investor or builder I know: they treat downturns as a forcing function to diversify their identity. If your entire sense of progress is tied to one asset class going up, you’re emotionally fragile. The people who thrive are the ones who have multiple vectors of growth happening simultaneously, whether that’s a skill, a business, a creative project, or even a new income stream.

Practically speaking, zoom out. Bitcoin has had five major drawdowns of 50% or more in its history. Every single one felt like the end. None of them were. The people who sold at the bottom all have one thing in common: they had no other source of momentum in their lives, so the pain felt unbearable.

My advice is simple. Set a rule that for every hour you spend checking your portfolio, you spend two hours building something that doesn’t depend on market conditions. The market will do what it does. Your job is to make sure that when it turns, you’re in a stronger position than when it dropped, not just financially, but in skills, relationships, and optionality.

Downturns don’t destroy investors. Idle despair does.

Zooming out literally fixes most of the panic. When Bitcoin dropped 80% in 2018, I’d already mapped the 4-year cycle on a log-scale chart and knew exactly where we were in it. That didn’t make the red days comfortable, but it made them predictable. Discomfort and danger are not the same thing.

The mistake most people make is using a daily candle to judge a multi-year asset. If your investment thesis was built on a four-year cycle and you’re measuring success after four weeks, you haven’t given the trade a fair test. You’ve just given yourself anxiety.

I’ve been in crypto since 2013. I’ve sat through multiple 80%+ drawdowns. Every single one felt like the end. None of them were. What kept me from selling at the bottom was having a framework that was bigger than the current price. Log-scale channel analysis, cycle timing, on-chain data. Not hope. Structure.

The practical advice: write down why you bought before the next downturn, not during it. When prices are falling, emotions override reasoning fast. But if you have a documented thesis, you can check the price against the thesis instead of against your feelings. Either the thesis is broken or it isn’t. That’s a much cleaner question than “should I sell right now.”

Zoom out. Have a framework. And if you don’t have a framework, that’s the real problem to solve, not the red candle in front of you.

Here’s what I’d gently push back on — the goal of “maintaining a positive outlook” is itself the thing worth being suspicious of. Think about it. Nobody has to work at staying positive about an investment that’s actually sound. You don’t wake up needing to talk yourself into believing in the thing that’s quietly compounding in the background. The very fact that you’re having to manufacture optimism is information. It usually means some part of you bought a feeling rather than a thing you understand, and now that the feeling dipped, you’re trying to top the feeling back up. That’s not resilience. That’s maintenance on a belief that isn’t self-sustaining.

So the advice isn’t “cheer up, it’ll bounce back” — I have no idea if it will and neither does anyone selling you certainty. The useful move is to ask a different question entirely. Not “how do I feel okay about this again,” but “would I buy this today, at this price, knowing what I now know, if I didn’t already own it?” That question is brutal and clarifying, because it strips out the part of your brain that’s just trying to avoid admitting a mistake. Most of the discouragement people feel in a downturn isn’t about the money. It’s the ego ache of being wrong, and staying “positive” is often just a socially acceptable way of refusing to look at that.

The people who actually come through downturns intact aren’t the optimists. They’re the ones who separated the two things most investors fuse together: the quality of the asset and the pain of the loss. Those feel like one sensation and they’re completely different facts. The loss stings the same whether you were right or wrong — so the sting tells you nothing about what to do next. Only the first question does.

And honestly, if the honest answer to “would I buy it today” is no, then the discouragement isn’t a problem to fix with a better attitude. It’s your own judgment finally getting a word in past the part of you that hates being wrong. Sometimes the healthiest outlook isn’t positive at all. It’s just clear.