It’s not a bear market, just a bull market pullback: Yanowitz

And why the SEC’s memecoin statement is a mixed bag, though a positive for crypto regulation

article-image

Blockworks co-founder Jason Yanowitz | Permissionless III by Mike Lawrence for Blockworks

share


This is a segment from the Empire newsletter. To read full editions, subscribe.


Need some reassurance after watching bitcoin fall under $80,000 last night? 

We managed to climb back above that level this morning, but only slightly — at least at the time I was writing this. I hope I didn’t jinx it. ETH, on the other hand, is holding on to $2,100. 

On the Empire roundup this week, co-host Jason Yanowitz explained his thoughts on the current market. For him, there are only three options: The start of the bear, the end of the four-year cycle or a simple pullback. 

If you voted for pullback, then you’re right on the money. 

“ I feel very convicted that this is not a bear market. So let me just [go] on the record, this is not a bear market,” he said, giving it a 20-30% chance that this marks the end of the four-year cycle and roughly an 80% chance that this is merely a bull market pullback.

Yanowitz gave 2021 as an example, citing the 56% pullback that bitcoin experienced a few years ago. 

“ ETH drew down 61%, SOL drew down 67%. And a lot of other things, in the middle of the year — in the middle of what we look back and think [of as the] 2021 peak bull market — drew down like 70 to 80%. I just think people are very quick to forget that,” he said.

If Yanowitz is right — and my reporting this week is in favor of what he’s said — then the harsh truth is that pullbacks are tough and anxiety inducing, but they’re not forever. 

I know it’s an utter cliche at this point, but the Brits really nailed this one: Keep calm and carry on.

And now you know.

Loading Tweet..

A dose of clarity was handed over to the market last night in the form of an SEC statement on memecoins. I think, after spending some time on it, that I’d characterize this as a bit of a mixed bag, though I’m leaning towards optimism.

Let’s start with the good: The SEC actually put the Howey test to work without a lawsuit! Huge. Love this for them. It’s exactly what the industry has wanted to see — and no one had to file a lawsuit or a FOIA for this clarity.

The SEC’s determination on memecoins based on the Howey test

If the collectible language sounds familiar, it’s because crypto czar David Sacks seems to have paved the way for this statement by saying, back in late January, that memecoins resembled something more akin to collectibles than securities. 

SEC commissioner and head of the new crypto task force, Hester Peirce, also said that memecoins don’t fall under the SEC’s jurisdiction in an interview earlier this month.

Why is the SEC’s new stance a mixed bag? Because it now seems more likely that the industry will have to self-regulate, meaning that it’s still open season for memecoins.

The SEC isn’t totally washing its hands of them, noting that any “fraudulent conduct” in relation to the sale or the offer of memecoins is still subject to enforcement actions and prosecution by federal agencies. 

But this statement did come at the perfect time: We’re starting to see memecoins slow down naturally, which could point to a focusing of market momentum elsewhere, potentially leaving memecoin hype behind. 

My insight is that I think it’s okay to let them operate in their own bubble. We don’t want memecoins taking up so much space, but — bear with me here — I’m not sure I totally see them as something akin to baseball cards. However, I definitely think they’re like slot machines or something more along the lines of a crappy penny stock with no fundamentals. If people want to put their money there, then let them. The trick is to ensure that folks are well aware of the risks. 

Now we only have to hope for a flight to higher quality tokens backed by fundamentals, and bam, we’re cooking again.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.jpg

Research

Bluefin possibly stands at an inflection point. The token is near an all-time low yet the protocol’s spot volume market share and derivatives exchange usage have been increasing month over month since its November launch. Given its current market position and the upcoming upgrades (for both Bluefin and SUI), there may be upside potential before the increased supply growth in December. However, strong opposition from existing competitors (like Cetus and Suilend), as well as new entrants (like Aftermath), pose key challenges to Bluefin’s medium-term success.

article-image

Introducing garbled circuits for enhanced privacy and regulatory compliance

article-image

Ross Ulbricht was a freedom maximalist building freedom tech, powered by Bitcoin

article-image

Solana validators can reap benefits including payments, votes and community clout

article-image

Sponsored

WalletConnect is cementing itself as the essential connectivity layer, ensuring wallets remain the entry point for billions of users

article-image

According to a legal filing, Galaxy Digital helped boost the price of LUNA while quietly selling its tokens

article-image

Tech fund portfolio manager Dominic Rizzo calls stablecoins “the most obvious use case for crypto”