Updated on:12/02/2025 05:54 PM 
Industry leaders across blockchain and cryptocurrency organizations believe the ongoing digital assets market correction represents a healthy evolution for the nascent industry, potentially eliminating bad actors and unsustainable projects, according to reports from May 27.
During discussions at the World Economic Forum in Davos, Switzerland, Bertrand Perez, CEO of the Web3 Foundation, emphasized that the current crypto bear market serves a positive purpose by filtering out participants who entered the digital currency space with malicious intentions or purely speculative motives.
"The bear market is actually beneficial for our ecosystem," Perez stated. "It allows us to separate serious projects from those that were only riding the hype wave during the bull run."
Perez further explained that market cycles reveal true intentions, noting that periods of bullish sentiment often attract participants driven solely by greed rather than genuine belief in blockchain technology's potential.
These sentiments were echoed by Mihailo Bjelic, co-founder of Polygon, who characterized the recent market downturn as a necessary correction. Bjelic observed that the cryptocurrency market had become increasingly irrational and reckless, requiring a healthy adjustment to establish sustainable growth patterns.
Ripple CEO Brad Garlinghouse offered additional perspective on the market dynamics:
The recent cryptocurrency market downturn coincided with broader stock market declines and the dramatic collapse of the TerraUSD (UST) stablecoin alongside its associated Terra LUNA token, creating ripple effects throughout the digital asset ecosystem.
FTX.US CEO Brett Harrison suggested that institutional investors may have significantly worsened the LUNA crisis through their trading behaviors and risk management practices.
According to Harrison, while institutional involvement signals growing maturity in the cryptocurrency sector, these large investors typically divest from high-risk assets during periods of global market stress, with digital currencies currently being among the first investments they liquidate.
Harrison's analysis aligns with perspectives from Cardano founder Charles Hoskinson, who has previously asserted that institutional investors exert undue influence over cryptocurrency markets. Hoskinson contends that Wall Street approaches digital assets similarly to traditional investments, often divesting them at the first signs of underperformance rather than taking a long-term view.
However, not all institutional players are contributing to the bearish sentiment in cryptocurrency markets. For example, MicroStrategy has maintained its substantial Bitcoin (BTC) holdings despite challenging market conditions, demonstrating a long-term commitment to digital asset adoption.
