I was trapped in a Croatian crypto festival while the market crashed

The pilot must have seen a crash coming.

The BlockDown Web3 conference was kicking off the next day. TNW was flying in to attend — but the fates had other plans.

After descending towards the landing strip in Split, Croatia, the plane suddenly reversed course and climbed back into the skies. A shroud of Saharan sand had made it too dangerous to land — and the real drama had only just begun.

When we finally arrived in Croatia the next day, the crypto market had entered its biggest downturn in years.

Falling skies

The seeds of the crash were sown long before BlockDown.

After reaching record-highs late last year, crypto prices started sliding as fears for the global economy grew. But the market truly went into meltdown after the collapse of Terra — a so-called stablecoin — and its sister token, Luna.

Luna tumbled 99% to under $0.02 on May 13 — the second day of BlockDown. The implosion reverberated through the market.

The chaos cast a shadow over BlockDown.

“How’s everyone doing?” Eric McIntire, the CCO of NFT games firm Fancy Studios, asked during his talk. “Surviving the bloodbath I hope?”

Attendees of the event suspected an orchestrated attack was behind the crash. Some spoke on stage mere minutes after learning of seven-figure losses.

Yet the crypto crash wasn’t the biggest headache for BlockDown’s founder, Erhan Kohallie. A bigger problem stemmed from the war in Ukraine, which prevented Russian sponsors and speakers from attending.

Staying on-chain

The downturn led some retail investors to skip BlockDown, but most of the bigger players still turned up. Some are too invested to quit; others remain optimistic about the future.

They remember that the market has hit record highs after even bigger crashes. Zaki Manian, cofounder of Sommelier, a decentralized finance (DeFi) project, pointed to the opportunities they provide.

“The challenge with DeFi is we actually don’t know what works and what doesn’t work until one of these crashes happens,” he told TNW.

“These crashes are actually the time of testing for DeFi. It’s also the best time to launch new stuff… launching in a bull market is actually truly terrible.”

Waiting for a rebound

Another cause for optimism is the applications beyond trading. BlockDown promoted various other uses cases that blockchain can enable, from DAOs to gaming.

Lili Zhao, director of ecosystem growth at Neo, an open-source blockchain development platform, stressed the difference between the tech and the market.

While trading is largely dictated by sentiment, effective applications have to focus on fundamentals.

“The stakeholders and factors which are driving the technology are completely different from those that are driving the market,” Zhao told TNW.

“Unfortunately, there’s a large detachment between the fundamentals and price. But in the long term, as the technology matures, there will be a convergence between the two.”

The crushing losses of the crash will devastate many investors, but a reset could be what the industry needs.