Definition of Crypto Winter
A simple definition of crypto winter is when cryptocurrencies drop and stay low for a long while. It is known as a time when the crypto market is in turmoil for an extended period, and one must prepare for that. The term is said to have come from the Game of Thrones phrase, ”winter is coming which is an ominous warning that trouble is brewing ahead. Those who trade in the stock market will know that a similar term in the stock market is called a bear market. The Crypto winter affects all cryptocurrencies in the crypto market, but the most significant impact is felt by the more prominent players such as Bitcoin and Ethereum.
What happens during winter
Like the season, the crypto winter has a cycle that comes around every couple of years. There have been crypto winters before, the most notable one being in 2017/18 when Bitcoin crashed, losing more than half of its market capitalisation. Ethereum and Litecoin also followed with significant losses. Before the winter of 2018, Bitcoin had reached a high of $19,500 before falling to less than $3,300 in 2018, a loss of 83%. The crypto winter reminds us that cryptocurrencies are speculative, and one should approach them as one might take an approach to betting on sites like NetBet for example, where you should only risk the money you can afford to lose.
Bitcoin has lost almost 55% value since the end of last year. This year Bitcoin was trading at $48,000, and now it’s just below $22,00. Ethereum suffered a loss from $3,800 to $1,700. So that is a clear indication that we are in a crypto winter. There have been cases where miners have not paid their electricity bills because of a lack of cash flow. Even big players like Coinbase have felt the loss; they laid off 18% of their employees.
The crypto market has lost a massive $2 trillion in value since the last quarter of 2021; this has been a brutal blow to investors.
How to survive this crypto winter
- Take this time to educate yourself even more about cryptocurrencies. If you have crypto investments, there isn’t much you can do anyway. So why not learn more about your investments or other currencies worth investing in? Maybe you could invest in a crypto start-up or even start one yourself.
- Get physical; yes, do something physical like running or gardening. Exercise also has mental benefits; you can make better decisions after a good bout of exercise and sunshine.
- Tune it all out, and deactivate your app. Throw yourself in something you love and enjoy doing, socialise and interact with people who won’t talk about cryptocurrencies.
Last Words
Now would be an excellent time to pick up distressed assets at a lower price, but be sure to conduct due diligence. Experts are divided on whether the markets will come roaring back or not, but we know one thing is sure the prices will go up again. Investors need to weather this season and wait for the cycle to finish the turn.
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- Source: Plato Data Intelligence: Platodata.ai
