Since the fall of Staplecoin in early May, Bitcoin, the most important currency in the cryptocurrency market, has been in the public eye, and its price has been hovering around $ 30,000.

Inside Report According to Forn Powell, author of the American magazine Forbes, the fall of Bitcoin not only saw a sharp fall in prices, but also affected other leading digital currencies such as Ethereum and Cardano. . And polygonal, its market value has fallen by more than 55% since the beginning of the year so far.

At the same time, major crypto exchanges such as CoinBase and Jiminy announced hiring freezes and layoffs in early June, resulting in Coinbase shares selling 15% of last year’s price.

Gemini’s CEOs Tyler and Cameron Winglewos announced in a blog post in June that the crypto industry was in decline, calling it the “crypto winter”, and that Winglewes’ blog is a key factor in the current global economic and geopolitical turmoil.

What is winter cryptocurrency?

The author believes that it is possible to hang a dark cloud over the so-called “cryptocurrency” cryptocurrency market. In these difficult times, investors need to be vigilant and be prepared for the chaos that will engulf the market.

As researchers believe that the new winter for cryptocurrencies has begun in 2022, the author emphasizes that the cryptocurrency will be lower in the long run as prices fall.

Writer Igor Zakharov, CEO of dbx Digital Environmental Organization, was quoted as saying:

Jagarov points out that high inflation has led to higher interest rates in the United States, which is the biggest factor affecting cryptocurrencies, “since the collapse of the Terra Luna currency and the beginning of the domino effect on the crypto world, the cryptocurrency winter has arrived.

The author notes that since November 2021, the cryptocurrency market has fallen 60% and has recorded a sharp decline from the current moment to $ 3 trillion to $ 1.2 trillion.

Benefits of Cryptocurrency Winter

Since the last crypto winter lasted from January 2018 to December 2020, the author shows that this is not the first time that a crypto winter has come on the market.

The author says that in 2018, when Bitcoin lost 50% of its market value, the term may have been used for the first time, not to mention some other cryptocurrencies such as Ethereum and Lightcoin.

According to the author, this experience shows that the cryptocurrency winter is very similar to the traditional bear market, and its results are not very different from those experienced by bear markets in other property classes. The crypto winter puts the future of small start-ups on the line, while creating an opportunity for large companies to demonstrate their currency’s resistance to market volatility.

The author continues, Jack Weiner, Founder and CEO of Ankaman, points out that as the competition for venture capital dollars becomes increasingly tough, more and more crypto companies will cut back on their budgets. Some companies have to lay off employees.

“If the market stays in deflation for a long time, it will affect not only small firms, but also some large firms,” ​​says Weiner.

According to analysts, the crypto winter usually starts with the last all-time high of the bitcoin price, and the bitcoin price reached a 52-week high of $ 68,990 in November 2021, with its current price beginning to fall to around $ 25,000. .

Cryptocurrency is a risky asset

The author notes that the cryptocurrency markets soared from late 2020 to 2021 because the Federal Reserve is pumping unprecedented amounts of cash into the financial markets, and this has fueled the cryptocurrency market, which has unleashed significant growth with thousands of new cryptocurrencies. Will emerge in 2021, and this massive growth trend continued until the end of last year.

In this context, Robert Johnson, a professor of finance at the Hyder School of Business at the University of Creighton, insists that if liquidity is withdrawn from the markets, more speculative assets will be severely affected and that there is no higher speculative asset class than cryptocurrency.

Will Crypto Spring return?

In predicting the future of the cryptocurrency market, the author points out that, as Johnson puts it, most experts confirm that “strong cryptocurrencies” will withstand this decline: “I do not expect cryptocurrencies to return. Is coming in, “more” Despite these captions, the cryptocurrency market is likely to rise like a phoenix from the ashes of its own renaissance.

The author concludes his report by saying that some investors – on the other hand – create an opportunity for the cryptocurrency winter to double their profits in the long run and buy cryptocurrencies at lower prices. Once the global political and economic crisis is resolved.