A bear market has taken hold in the cryptocurrency space for over a year. People are throwing around the moniker “crypto winter” to signify the cooling down of interest and profitability in major cryptocurrencies such as Bitcoin and Ethereum. Today, we’re going to talk about what it is actually about and when can it be over.
Is the Crypto Winter Real?
The biggest booms and the steepest falls in cryptocurrency values have been aligned with the interest of the general public or market movements.
Though crypto whales indeed influence the values when they dump or buy large amounts—Their tendencies are guided by the general interest in the space.
When we say the interest of the general public, we mean exactly that. The general population is not tech-savvy. And when people don’t fully understand how blockchains work or how to vet the teams behind certain projects, they are completely at the mercy of developers and marketers.
As a result, many people buy coins that are simply a bad deal. A lot of them also get scammed (rug pulls, for example). And some simply lose their life’s savings trying to get rich overnight.
Not to mention the FOMO surrounding crypto booms, which is a whole topic in itself, and all the market volatility it leads to.
Now, if we focus on this section of the population that actively buys or trades cryptocurrencies around booms and dumps it all when markets go red, you can see how a large influx in transactions can bring about a notable change in the asset’s value.
It can go higher than it was meant to go and then fall down, or it could go lower than it should be and then climb up.
The current crypto winter is the third one. It’s going on for over a year. The effect started with the fall of Terra and then the collapse of FTX.
As a result, massive amounts of cryptocurrencies were liquidated due to FUD.
Now, note the similarities here. The bad booms (high values that will certainly come down) and the bad falls (low values that will certainly be corrected) are both associated with the general public’s FOMO and FUD, respectively.
If you were to somehow plot a graph of any major cryptocurrency while removing these parts and replacing them with a median line, you would get a chart that only goes up.
So, of course, the crypto winter is real. But is it significant? That depends on whether you’re part of the general public driven by FOMO and FUD or someone who understands the world of blockchain and its promise.
When Will the Winter Be Over?
If all goes well, the market will be back on track by the end of 2023. As per the analysis of the expert website cryptocurrencyhelp.com, the price of BTC can range anywhere from $30k to $45k, based on the predictions of famous crypto commentators, such as Alistair Milne and Antoni Trenchev.
If that’s not the case, then there’s the Bitcoin halving scheduled for 2024. If you didn’t know, so far, BTC has gone through a significant bull run within one year of every halving (there have been three so far). See the Blockworks coverage for more details on this.
Halving is when the available Bitcoins in circulation halve. It makes the commodity scarcer. And other cryptocurrencies also see growth in the bull run that follows.
By all measures, we believe 2025 to be the year when we’re back to a bull run. And 2024 might be the year when we get out of the winter, if not earlier.
How to Manage in a Crypto Winter?
Surviving a crypto winter is not rocket science. There are some very dependable ways and techniques to brace through without liquidating everything or worrying a lot.
Let’s see what you can do to better manage your crypto assets during a crypto winter such as the one we’re going through right now.
1. Consider focusing on large-cap cryptocurrencies with established track records. These cryptocurrencies, such as Bitcoin and Ethereum, tend to be more resilient during market downturns and have a higher likelihood of recovery.
2. Avoid putting all your eggs in one basket. Diversify your cryptocurrency holdings across different projects and assets. This can help mitigate risk and potentially capture gains from different sectors of the market.
3. Instead of trying to predict short-term price movements, focus on long-term investing strategies. Trying to time the market often leads to buying high and selling low. It’s better to take a patient approach and focus on the fundamentals of the projects you invest in.
4. Carefully evaluate each cryptocurrency project before investing. Understand the technology, team, and potential use cases. This is the single most important tip we can give to the general public to help them graduate into crypto enthusiasts.
5. You can consider investing in companies that are involved in the cryptocurrency industry or cryptocurrency-related exchange-traded funds (ETFs).
The winter might be over soon—And it’s not something to navigate with FUD. Hopefully, you now have a clearer picture of the current crypto winter and how to manage it better.
And don’t forget that the lower prices might actually make cryptocurrency a good investment in 2023 that you can capitalize on when the winter is over.
Legacy Benjamin is an experienced content writer with a half-decade of experience in the field of blogging. He is also a skilled business consultant, providing valuable insights to companies and individuals seeking growth and success. His expertise lies in crafting compelling and engaging content that captivates audiences and drives business results. For business deals, contact him