Crypto Winter: An Investor’s Great Fear…
It has been a challenging few months for crypto investors since Bitcoin fell from its all-time high of 69k; moreover, many coins have followed the footsteps of BTC for price action.
The entire crypto market has since lost more than $1 trillion in value, and many experts believe there is more to come and not the last of the wave; a lot of people are scrambling to get a sense of what’s to come and whether we’ll be entering another dreaded crypto winter again.
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Cold world for crypto…
The entire crypto market has lost about $1 trillion in value since November, around the time of bitcoin’s all-time high, and other tokens like ether and solana followed the number one digital currency to trade sharply lower. Ethereum has more than halved in value since it peaked in November, while Solana experienced an even sharper drop at 65 percent. In 2018, bitcoin went through what many now refer to as “crypto winter,” which witnessed an 80 percent drop in bitcoin; could this be another case of the current price action?
BTC: Bitcoin is battling to break 40k after hitting an all-time high in November 2021. | BTC:USDtradingview.com
David Marcus, the former head of crypto at Facebook (now Meta), seemed to suggest that he believes a crypto winter has already arrived. In a tweet earlier this week, he said: “During crypto winters, the best entrepreneurs build the better companies. Now is the time to focus on solving real-world problems versus pumping up tokens.”
Nadya Ivanova, chief operating officer at BNP Paribas had a contrary view of a crypto winter, stating that “over the past year – especially with all the hype in this market – many developers seem to have been distracted by the easy profits of speculation in NFTs ( non-fungible tokens) and other digital assets. A cooling off period could actually be an opportunity to build the foundations of the market,” Ivanova told CNBC’s “Squawk Box Europe”.
Hope for a better day…
Many coins suffer the same fate as stocks such as major ones, especially the stock market; many investors face fears of harsh federal regulations and interest rate adjustments that could hurt more if you went big in the past year. The Federal Reserve is considering taking such steps in response to rising inflation, and some analysts say it could lead to the end of the era of ultra-cheap money and skyrocketing valuations — especially in high-growth sectors like technology, which are benefiting. at lower rates as companies often borrow money to invest in their business.
Vijay Ayyar, vice president of business development and international at crypto exchange Luno, thinks the recent crypto collapse is more of a “correction” than an ongoing downturn. He also stated that going forward, an important level to watch out for for bitcoin is $30,000. If it closes below that point in a week or more, “that would certainly indicate a high probability of a bear market,” he said. A decline of about 80 percent from bitcoin’s recent peak would indicate a price below $15,000. Ayyar doesn’t think such a scenario is on the table.
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