The Crypto-Developer Bear Market

One area of crypto that has yet to experience a rally, despite crypto’s relative performance in 2023, is development. Development stats, like commits and developer counts for crypto projects, have stubbornly continued trending downwards for the last year. Fewer projects are launching on-chain, live projects are seeing less development, and existing projects are wrapping up. It seems that we are in a stubborn bear market regarding the development of crypto projects.

First, commits have been trending down for the last year. Commits peaked at almost 280K per week in Q2 of 2021 but have since declined to around 37K per week in Q3 2023 – a more than 86% decline. This trend could be because fewer projects are launching or even finalizing their protocols. Also, due to bearish market conditions and regulatory concerns, developers are probably leaving for less risky industries.

Active developers have also fallen off a cliff in the last year. A year ago, based on Github activity, an estimated 12K developers were working on various crypto across the space. Now, the estimated amount of developers working on projects is around 5.8K – a more than 51% decline.

These stats aren’t super surprising. Crypto has suffered numerous black eyes in the last few years. The exuberance with which some have entered the space has probably faded, leaving them cynical towards crypto. The people who came when the market was good have probably moved on to something else. Additionally, as projects fail to find a market fit and begin to run out of funds, those projects will fold up and discontinue development.

Although these trends may look bearish, I think these two trends are another signal that a bottom is forming for crypto. Like other people, many developers will come to crypto during a bull market and will create projects to capitalize on the speculative fever and attention. Once bullish market conditions evaporate, developers will move on to other endeavors, just like others who came during a bull. Some will stay hoping that the market conditions will improve, but eventually, they will capitulate and move on to something else. But, as prices begin to improve, developers will be drawn back in to capitalize, albeit slowly. We have already seen prices improve, and if it continues, developers will come back and develop new projects – projects that could catalyze a new wave of enthusiasm and spur a new round of growth in the market. So, although these trends look bearish when we dig a little deeper, they could be another tick for the bulls that the bottom is behind us, and a new bull is coming.

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