Almost 10 years ago, in 2013, crypto investors were panicking, as Bitcoin fell about 80% down. It wasn’t before 2020 when the cryptocurrency regained its previous highs.
For many, this long period is known as a crypto winter.
As you might guess, crypto winter refers to a period of time, when the prices of Bitcoin and other cryptocurrencies remain low. Anyway, today I will dig a little deeper to explain exactly what the crypto winter is and how you can handle such a period.
What is crypto winter?
The term “winter” refers to a cold period or “missing hotness” in different types of assets. In other words, crypto winter refers to a collapsed price of cryptocurrencies. This means the interest in the given asset has declined.
An example of crypto winter is the collapse of Bitcoin in 2017-2018, when its price went from $20,000 to $3,000, together with many other cryptocurrencies.
In 2021 Bitcoin reached an all-time high of more than $64,000, and as we know, today (May 2022) it is worth less than $30,000.
What to expect?
It is not a surprise that the crypto winter has a negative impact on investor’s decisions to invest in cryptocurrencies.
As we know, cryptocurrencies are highly volatile. Anyway, Bitcoin has proven itself as a long-term hold for anyone who keeps his exposure low and embraces both the lows and the highs.
According to the co-founder of Ethereum, Vitalik Buterin, crypto winter isn’t such a bad thing for the crypto system. He actually thinks that such a downturn could be good for the crypto industry's progress. In such times is eliminated much of the short-termism of investors and market speculators.
Of course, we can not deny that such downfalls can have a negative impact on the crypto community. After a crypto winter, it is not so easy to go back to the highs.
Challenges
For many individuals, cryptocurrencies are a tool of the rich, and for others, they are a tool used to hide your assets.
Anyway, none of this is true, as crypto technology is a development that can only succeed with a mass adoption. Unfortunately, it is still hard to achieve this, as there are still many people connecting crypto with scams and losses.
Crypto winter is not only about the drop-down of the prices. There are still many people who aren’t so confident about investing in crypto and have second thoughts. Bitcoin has fallen down by more than 70% and that causes a significant loss of confidence.
Moreover, government regulators start taking a more conservative view of the crypto technology, as well as more complex lines regulating it, which leads to many crypto startups being excluded from the markets.
Unfortunately, we can say that crypto winter is already here, and it is in the hands of the community leaders and influencers to change the whole message.
Still, we can look at the bright side and consider the crypto winter as a must-have tool for cryptocurrencies to become more sustainable and to grow in the future.
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