What is Crypto Winter?
Crypto Winter, What is it?
To understand what crypto winter is, you must first understand what winter is. You should also understand what happens during winter and the impacts of it. So, it’s time to dive in.
Winter, from Wikipedia is the coldest season of the year. It occurs in polar and temperate regions. It usually happens after autumn and before spring every year. When winter occurs a lot of things happen. But the biggest impact it has is on living things, plants especially.
The plants that can’t survive usually dies. Those that can adapt to the harsh cold conditions. They often hide themselves within the warm ground. And when spring comes, you’ll find them to be the ones that blossom and grow even stronger.
Now coming to the main topic (Crypto Winter) “winter” here means lack of hotness or in simple terms, being cold. In cryptocurrency, winter means that there’s a collapse in the price. The value of a cryptocurrency decreases. This collapse and waning of the prices of the cryptos reaches a point that they appear frozen in time.
Using an analogy to describe how this winter affects cryptocurrencies. The plants mentioned above can represent how cryptos behave. Some cryptos don’t survive (in the case of Shield coin). While others (Bitcoin, Ethereum) waits until spring comes for them to bloom.
Crypto winter is also when the crypto market experiences a long bearish trend. Usually seeming to be constant.
When Did Crypto Winter Start?
Crypto winter started when the Bitcoin price dropped from $20,000 to $3,000. This was along with 2,000 other international cryptos. They crushed from a total market capitalization. It was close to approximately a trillion dollars to less than $200 billion, and this was a chilling price drop of 80%. The price crash lasted around a year from December 2017 to December 2018.
Some cryptos survive this winter while others like plants don’t. This is also the period when crypto traders are often most afraid of.
And because of crypto winter. Most people are skeptical about investing in initial coin offerings (ICOs). They believe that when the next crypto winter comes. Many ICO projects will fail; this means the loss of a lot of invested cash.
To recap, crypto winter refers to when the crypto market is going through a bearish trend. The trend moves in a way that the crypto prices look as if they’re frozen in time. It’s often the worst time of the year for most cryptos and crypto traders. It’s because many new crypto often dies. When this happens, investors and also crypto traders lose a lot of money. You could be asking, “How does crypto winter kill cryptos?” Here is how. In the bearish trend, the value of the cryptocurrency depreciates. If this continues, the crypto in this trend will no longer have value. And as a consequence, the crypto ceases to exist (dies). Hope you now understand what crypto winter is. And how it affects the crypto market and all the ones involved.