As Bitcoin and the altcoins in the cryptocurrency market continue to struggle to gain any form of stability, there has been pressure on the industry as it heads further into the “crypto winter”. Eight months ago, Bitcoin reached its all-time high value, peaking at just below $70,000. Since then, the leading cryptocurrency has been on a steady downtrend to hover around $20,000.
Declines across the crypto market
The other cryptocurrencies in the market have also been feeling the decline with Ethereum (ETH) dropping by 77.5% since November, Cardano (ADA) dropping by 85.1%, Ripple (XRP) which is 90.6% since its all-time high, and Solana (SOL) which is down by 86.9%.
The crypto industry struggles with the current climate
In addition to the cryptocurrencies in the market, the companies in the industry are also suffering from the dipped values and trading volumes. Leading cryptocurrency exchanges like Coinbase and Gemini have announced that they have had to lay off significant numbers of staff members, with a hiring freeze in place. Furthermore, Coinbase shares have fallen by over 85% in the past year.
What is a crypto winter?
Coined by the phrase “Winter is Coming”, the crypto winter refers to an extended period of time where the market struggles to regain any strength. During a crypto winter, the market is unsteady and more volatile, with wilder market swings possible.
Also known as a bear run, the crypto winter is defined by low prices, negative sentiment, and an extended period of market volatility. According to the CEO of DBX Digital Ecosystem, Igor Zakharov, the current crypto winter is likely as a result of several factors in global macroeconomics. From the decline of shares, especially in the tech industry, inflation, and the impact from global events like the Russia-Ukraine conflict, the cryptocurrency market has taken a knock. As per Zakharov:
“The crypto market was already feeling the effect of world events, especially the Russia-Ukraine conflict that caused turmoil in global finance… By the time TerraUSD and Luna collapsed and set in motion a domino effect in the crypto world, crypto winter had already begun.”