Cryptocurrency Winter is coming: “Meme coins will die”
Is another cryptocurrency winter coming? Investors and analysts increasingly warn about the possibility that this is the case. They have reason to be nervous.
The price of bitcoin collapsed from the $68,000 all-time-high it reached in November 2021 to be worth just over $35,000 in mid-January. It has since recovered slightly and is now hovering on the $39,000 line. Both ether and Solana have suffered similar drops.
In total, the crash shaved over $1tn of value from the cryptocurrency market. For anyone keeping score, that’s more than the $600bn in 2022 value that was lost in the 1929 stock market crash, as noted by The Byte.
The collapse of the market comes after two years of a pandemic-induced cryptocurrency boom. Rewind to the height of the Covid-19 crisis and you could barely walk without falling over another think piece about how bitcoin was used the way people would normally invest in gold during times of turmoil.
What is a cryptocurrency winter?
All markets go through cycles when the price either goes up or down. Fluctuations are normal and expected. Sometimes they can, however, be caught in a downward spiral with the price of certain stock falling more than expected. A cryptocurrency winter is when that happens in the cryptocurrency market and experts see no likely recovery happening over the next year or so.
Cryptocurrency winters aren’t uncommon. The latest one occurred back in 2018. The Bitcoin Crash or the Great Crypto Crash as it became known occurred after the then-unprecedented boom of 2017 when bitcoin ended the year on a $19,000 high. Fast-forward to February 2018, and the digital dosh had plunged below $8,000. It ended the year trembling on the $3,100 line.
While it’s difficult to pinpoint a single factor behind the Bitcoin Crash, one doesn’t have to look hard to find potential culprits. These include the $530m hack of cryptocurrency over-the-counter market in January and compromised Binance application programming interfaces were being used to execute irregular trades in March. It’s not a confidence-building exercise to discover that two of the leading exchanges in the world have been hacked.
Other factors contributing to the collapse of the bitcoin market would also include that Google, Facebook and Twitter banned cryptocurrency ads on their platforms in March.
Katharine Wooller, managing director at cryptocurrency wealth platform Dacxi, echoes the sentiment.
“In comparison to the dulcet summer of 2021, winter is already here for crypto,” she tells Verdict. “That said plenty of investors are taking advantage of cheap coin, and embracing the fact that bitcoin is on sale.”
