As early as next month, cryptocurrencies may set a record for the longest bear market in their history. The cryptocurrency bear market has already lasted almost 400 days. The last time this happened was in 2014-2015. And officially, this will be the longest bear market in the history of cryptocurrencies.

The grand sell-off at the beginning of 2018 dealt a blow to retail traders, hedge funds and cryptocurrency holders. However, such sell-offs are nothing new in the history of cryptocurrencies. Since 2011, Bitcoin has survived at least five grand crashes with losses from 37% to 84% of its value. However, despite such grand crashes, Bitcoin recovered to new highs, culminating in the 2017 price record when the value of Bitcoin reached 20,000 dollars.

At the height of the bull market at the beginning of 2018, cryptocurrencies were valued at an incredible 840 billion dollars. In less than 12 months, the market hit the bottom at 100 billion. And is this the bottom? After all, predicting the cryptocurrency bottom is difficult, and many analysts have failed trying to give logical answers about a market that is in its infancy.

Some experts, based on technical analysis and market sentiment, predict that the bearish trend could last at least until the middle of 2019. There are, of course, other reasons to expect that the bears will retain control. These include uncertainty in regulation, indecision on the part of institutional investors and the consequences of the ICO boom.

The bear market is dragging on. However, in one small corner of this market, business continues to flourish. During a prolonged bear market, cryptocurrency traders and startups turn to lenders with a request to finance their deficit. This prolonged bear market is no exception. As Bloomberg recently reported, lenders have faced high demand from cryptocurrency traders who do not want to sell their coins at reduced prices, as well as from large investors seeking to short virtual currencies.

Like hedge funds, most cryptocurrency lenders began operating in 2017 during the market boom. Hedge funds have been fighting for their existence ever since the market entered the bearish phase, while the business of cryptocurrency lenders is flourishing. While cryptocurrency companies continue to cut staff, companies such as BlockFi, which provides loans in US dollars secured by cryptocurrency, have increased their revenues tenfold in just half a year. Aave, which owns ETHLend, recently opened an office in London and will soon expand its presence in the United States. The company called Salt Lending already employs 80 people.

In the coming year, the development of the cryptocurrency industry will be dictated by several factors, including regulatory oversight of the market by the Securities and Exchange Commission, its decisions regarding the hotly debated Bitcoin-ETFs and the appetite of institutional investors for physical bitcoin futures.

In addition, the ICO model that dominated in 2017-2018 is also undergoing a serious shift toward secure tokenization and even initial exchange offerings. It is still too early to assess the impact of these new financing models, but it is obvious that the ICO market is in the final stage of its existence. An illustrative example: in January 2018, token projects raised 1.5 billion dollars, and by December this figure had fallen to 59 million.