Inspired by the famous American fantasy TV series ‘Game of thrones’, Crypto winter is coined to denote the bear phase in the Crypto market. Everyone trading in the Crypto space apprehends that it has exceedingly high volatility compared to the traditional markets. Therefore, one should not invest in Bitcoin Gold, expecting the graph to grow yearly. The key here lies in monitoring the performance of various digital assets at a specific time, which makes it easier to make informed decisions while the market fluctuates.
Observing the Crypto Market this year, it is clear that Crypto is going to witness yet another tormenting winter for its investors. It is crucial to understand that Crypto Winter is part of the growth cycle in the Crypto industry, and analyzing this phase can create enormous wealth-generating opportunities for new and seasoned investors alike.
Understanding the Risks and Opportunities
Assessing the impact of the last Crypto winter (2018), several Crypto giants, such as Gemini Trust and Coinbase, faced disastrous losses within the first few winter months.
Crypto news reported that this time Coinbase had to lay off almost 1/5 of their workforce in mid-summer.
They were creating intense speculation that Crypto was mere hypothetical investments that would collapse at any time. Rising costs of mining, reduced blockchain players, and higher interest in digital assets made the scene look even worse, which brings the risk to whether and if the investors would hold onto their investments during the turmoil. The lack of predictive analysis in the Crypto space is another questionable factor when risking assets during the Crypto winter. The scenario in 2022 looks even worse than the 2017-2018 winter. The industry has faced a record slump of over $2 trillion of its total value since 2021. Numerous Cryptocurrency companies have been under debt to service their investors looking to withdraw their funds, while few have already filed for bankruptcy. Changing governmental regulations has also severely threatened to stabilize the declining graph this year.
However, Crypto has not lost its significance in major upcoming digital projects such as Metaverse. This involvement suggests that Crypto winter could also bring many opportunities for investors. Growing bitcoin market cap, new crypto platforms have emerged in developing countries, and NFTs could draw more investors owing to a heroic comeback for Crypto value shortly. Hinting at this is various new cryptocurrencies paving their way into the market in 2022.
What to expect in 2022 and Beyond?
From the situational perspective, it is too early to predict how the year will end for the Crypto market. Nonetheless, crypto experts have indicated that there will be a symbolic rise in the value of Bitcoin and Ethereum by the end of 2022. The weight around the growth in this context has not been predicted; however, it could grow by a significant percentage. Thriving alternatives such as BNB coin have also been gaining popularity in promoting digital transactions making the Crypto market much more stable than it was in the past year. The road ahead could be smoother if the regulatory laws promote the stability of Crypto assets and bring them into mainstream exchange platforms. The overall scenario looks positive for early investors willing to take calculated risks and looking to hold their investments periodically. Reports suggest that technological advancements could bring down the cost of mining in the next few years. Attributing to such factors, Crypto has been proving itself good time and again. It should be noted that Crypto today could be an excellent wealth-generating option if the asset is bought at base-level prices. This crypto winter could bring down stock values for digital purchases, which could be a perfect buy for intelligent investors.
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