What’s ‘Crypto Winter’, And Why It Has Investors Quaking In Their Boots As Bitcoin Slumps

Crypto winter is a bitcoin and crypto investor’s worst nightmare – it’s the one thing that crypto enthusiasts fear more than a bearish market. But what even is it?

Just as Bloomberg accounts, the chilling term refers to a sharp slump, followed by a drop-off in trading and months of market doldrums — a phenomenon that memorably befell the crypto market in 2018. Memories of bitcoin slumping by over 80% to as low as $3,100 from the end of 2017 and onto the following year plague the minds of many as Bitcoin slips to $33,000 levels at the beginning of this week (its value falling more than 50% from previous high).

Even with the beginnings of a recovery in sight for the digital token, analysts have yet to give any optimistic verdicts on the future of this cryptocurrency.

This duration in 2018 was characterized by the boom-and-bust of initial coin offerings, with several big banks shelving their plans to start cryptocurrency trading desks. Following this period, Bitcoin did not hit a new high up till December 2020, according to Bloomberg.

Present Slump In The Market

Whilst the world’s largest virtual currency lost around half of its value in the past few months, more than 1 trillion dollars were shed from the entire crypto marketplace amid rising bearish sentiment.

Other major cryptocurrencies that secured their place as the largest digital currencies after Bitcoin, namely Ethereum and Solana, have also been severely affected. Solana’s price declined steeply over the past month, falling about 65%, and Ethereum value has halved from its ATH in November 2021.

Is A Crypto Winter Coming Again In 2022? Expert Opinions

Crypto winter, a term referring to a major bear market, has many investors spectating on whether the crash that dominated the late 2017 and early 2018 period is set to transpire yet again in 2022.

“It’s during crypto winters that the best entrepreneurs build the better companies. This is the time again to focus on solving real problems vs. pumping tokens,” David Marcus, former head of crypto at Facebook-parent Meta tweeted out, visibly acknowledging that a crypto winter has already come, CNBC reports.

On the other hand, Nadya Ivanova, COO at L’Atelier BNP Paribas, stated that “Over the last year — especially with all the hype in this market — a lot of developers seem to have been distracted by the easy gains from speculation in NFTs (non-fungible tokens) and other digital assets. A cooling off period might actually be an opportunity to start building the fundamentals of the market,” Ivanova told CNBC’s Squawk Box Europe. Seems that she isn’t convinced about arrival of a crypto winter, but does believe that a cooling off time interval would be conducive for the market.

What’s your take on a possible crypto winter in 2022? Comment down below to share it with us.

Sneh Dokania is an Economics major student with an inquisitive disposition seeking to articulate facts, information and news stories in a candid manner on Clout News.

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