It’s winter now, but is it also a crypto winter? When it comes in, the cryptocurrency market will do badly. The price values are not doing well and crypto has a less positive image than outside the crypto winter. Prices are getting lower and lower and we have to wait for the sun to come out from behind the clouds again to thaw the ice.
Let’s go back for a moment: what is a cryptocurrency anyway? Bitcoin is an example of this. It is a decentralized network where you can trade virtual currencies anonymously. The coins are recorded in a blockchain, a large network of computers in which each link always knows what is happening in the entire chain. Because there are no intermediaries and no banks involved, it makes some people and organizations a bit nervous, but Bitcoin, for example, has been around for a long time and has had great success. But: not if there is a crypto winter.
Crypto winter
Usually it is hard to tell when we are in a crypto winter. It’s better to judge that afterwards. For example, there was another fairly heavy one last year, with many crypto fans seeing the value of their currency fall and fall. Although winter is a weather term, it is not the case that there is some kind of KNMI that can predict when another crypto winter will arrive. Where this is more predictable with shares, for example, that is not the case with crypto. The same applies to the end, by the way: when it will begin cannot be estimated either.
At the same time, it is also not easy to think of which crypto currencies are all victims of the winter. Although this usually applies to most crypto. It often collapses almost all at once. However, that does not mean that a crypto winter is very unfavorable for everyone. It is actually an ideal time to get in. You can buy cheaply and then you have to wait until the winter is over and your currency grows. Of course, the motto here remains: only invest money that you can afford to lose. Not next month’s rent or mortgage.
Cryptocurrency
However, when crypto does not do well, it is detrimental to most people. If you own crypto, they will be worth less, but many people are often fired at crypto companies when a disappointing period arrives. The annoying thing is that crypto winters are often caused by the fumbling of others. Consider, for example, the crypto exchange FTX that collapsed after founder Sam Bankman-Fried allegedly committed fraud. The entire NFT market even had a hard time here (non-fungible tokens). It has also been proven: crypto winters have a huge influence on investors and everything freezes during this period, so to speak.
Incidentally, there is no official measure at all for what exactly a crypto winter is. It is kind of collectively decided, but it is not said that Bitcoin, for example, must be at a price of x for a crypto winter to be ushered in. However, there are often many factors of influence. Investors no longer listen to it, the media writes negatively about crypto or people no longer trust the tech (which, however, is often the result of the fumbling of others). What can also have an influence, however, is legislation and regulations. This sometimes changes and that can be detrimental to this decentralized market.
