What is a 'crypto winter': the prediction that threatens bitcoin and other cryptocurrencies

In just a few days, cryptocurrencies as entrenched as bitcoin or ethereum have fallen more than 50% from their maximum values.

The entire cryptocurrency ecosystem has been affected in a perfect storm that combines current inflation, rising interest rates and the implosion of what many now consider a beach bar...😂

A crypto winter could be explained as a prolonged bearish period but with the addition that it occurs in a context as fluctuating as that of cryptocurrencies, where losses can be much more damaging for many investors. Like the bear phase of a stock market, when negative investor sentiment causes prices to drop sharply for an extended period, the cryptocurrency market can enter a downward spiral.

What is a 'crypto winter' and how long could it last

When prices fall with no recovery in sight for more than a year, it is called in the community jargon that a “crypto winter” is taking place.

Bitcoin and other cryptocurrencies have been through winters before. For many, this current decline is reminiscent of the crypto winter of late 2017 and early 2018, when the price of bitcoin plunged 80% to as low as $3,100 after making its first big rally to $20,000 and bringing with it a bunch of new cryptocurrencies. 🤑

In fact, if there is something scary in certain circles, it is because it is believed that these periods in bitcoin also occur cyclically.

That 'winter' caused the failure of multiple initial coin offerings and led large banks and companies to shelve their plans to enter the crypto world. Bitcoin did not recover until reaching a new high in December 2020, at the start of the COVID-19 pandemic.

There are several factors that suggest the arrival of a new period like this beyond inflation and the monetary movements of the US Federal Reserve or the ECB to fight against it.

The proposal to ban the use and mining of cryptocurrencies in Russia and the ambiguous stance of governments around the world regarding regulations on their use have investors on edge.

Only time will tell if we are entering a new 'crypto winter' or not.

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