For investors, there is nothing scarier than a bear market – unless you are involved in crypto, in which case winter is worse.
The creepy term refers to a sharp decline, followed by a drop in trading volume and months of market downturn — a phenomenon that happened in the cryptocurrency market in 2018 unforgettable. Bitcoin’s price ranged from late 2017 to December, a period marked by a boom and bust in initial coin offerings, and several major banks shelved plans to open cryptocurrency trading desks. Bitcoin will not reach new highs until December 2020, according to data compiled by Bloomberg.
Memories of 2018 have sparked fears that it is now repeating itself after the world’s largest cryptocurrency plunged 50% from its most recent high of nearly $69,000 in November. The cryptocurrency world has lost more than $1 trillion in market value amid growing belief that the Federal Reserve will begin to scale back the ultra-easy policy environment that fueled the boom in risk assets. The pullback has touched every corner of the crypto ecosystem, from bitcoin to memecoins and publicly listed crypto exchanges. UBS said that while the crash itself was disturbing enough, it raised bigger concerns that the pain could linger for months.
“The closest analogy to how we can describe this is probably 2018, which is the idea of a crypto winter,” UBS head of foreign exchange research James Malcolm said by phone. The period that will be extended, so the analogy of crypto winter is very good. Remember that the crypto winter of 2018 was not just the winter months in the northern hemisphere. It basically extended for a whole year – so it is a valid lasting one year cryptocurrency winter.”
Complete News Source : NDTV
