Understanding The Concept Of Crypto Winter

Crypto is in some bad shape at the moment! It has dipped severely, which has made the investors pull their money out from their investments. According to the experts, it is the time when the investors and the potential crypto users will be seeing the crypto winter. 

This is a spell of drop in the value of almost all the cryptocurrencies, no matter if it is bitcoin or any other altcoin. If reports are to be believed, the January dip has led to a withdrawal of somewhere around 130$ from the market. This is the highest amount that got wiped away from the market within 24 hours. 

For a lot of crypto experts, these are the first signs of the coming crypto winter. It is true that in the past two years, a huge number of people have invested in crypto. 

They purchased digital currencies of varied types to either trade immediately or keep for some period. With this massive dip, every investor has gotten pretty worried regarding the prospects of crypto in the future. 

What Does Crypto Winter Mean?

Crypto winter is a term that is used to talk about the drop in trading where suddenly, the value of a currency goes unexpectedly down. 

This reminds me of a sudden drop that occurred in the year 2018, which forced several investors to take their money out and use it somewhere else. From 2017 to 2018, the market saw a sudden boom and then a great plunge all of a sudden. 

This affected the plans of the banks that had decided to come up with crypto trading desks. This sudden fall couldn’t let them turn their plans into a reality. Till December 2022, the currency didn’t reach a new rise. However, later on, it showcased an impressive boom and aided the investors in making a lot of money. 

The last time the world saw a crypto winter, it wasn’t only for a few months like this season is. Rather, it spanned for around one whole year! 

The Majorly Hit Coins

If you are aware of the crypto market, you would know that the two most sought-after coins are bitcoin and Ethereum. This dip affected these two coins the most. 

Their value went down within seconds and those who had invested in these coins majorly had to deal with a massive loss. Alongside bitcoin and Ethereum, two other cryptos that also saw a major downfall are Shib and Dogecoin. 

Where Bitcoin and Ethereum dropped around 50% and went their all-time low, others were not affected this much.  

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The Possible Reasons Behind the Dip

Apart from market speculation and trends, there are numerous other factors that may have led to this sudden downfall of cryptocurrency value. According to some experts, the rise and fall of the crypto value depends on the buying and selling of technological stocks. The monetary policy of the country also affects the crypto value as well. For instance, if the federal government imposes heavy interest rates or taxes on the crypto trader, it may lead to a change in their intentions and mindset, affecting the market greatly. 

The Effects Of Crypto Winter

Crypto winter has made a lot of companies change their future plans. The comparatively stable working of the digital currencies for a year made them appear a feasible expansion option. A lot of companies made plans to enter into the crypto world with new hopes of feasibility. And because of that the demand for cryptocurrency ATMs is increasing.

For instance, Walmart, one of the most famous retail companies, planned to be a part of the crypto ecosystem last year. It has decided to come up with its own cryptocurrency. 

It also hopes to offer more NFTS in this regard. Apart from Walmart, GameStop Corp also had similar plans. However, with this heavy dip, chances of them venturing into this world have dwindled majorly.

Conclusion

The plunge of 33000$ was surely a massive one and caused a lot of disruption in the regular crypto activities. It’s the lowest since July, last year. 

If you had plans of buying cryptos, you need to wait for a few months, till the time this crypto winter ends. Once things are back on track and the crypto market is up and thriving yet again, you can surely put your money in it!