What is Crypto winter?
The cryptocurrency world for as long as we know has been experiencing what most people tag crypto winter. Trust me, crypto winter is not a term that is difficult to decrypt, that is if you are a fan of Game of Thrones HBO television series, where the word, ‘Winter is Coming’ is known. However, if you aren’t familiar with the phrase, it is used to depict a sign of warning, and a time to be constantly vigilant about what we value most. And if bring it down to the cryptocurrency sphere, crypto winter is coming was used as early as 2017 to warn investors. However, unlike the Game of Throne fans that are still waiting for ‘Winter to Come’, crypto winter came in 2018, and some argue that it is still here.
To put it in a more relative term, crypto winter is simply a period where cryptocurrencies are extremely volatile in value, sending it in more of bearish runs compared to bullish runs. Despite the crypto winter however, millions of investors remain somewhat optimistic. And the crypto whales like John Paulson from America have in what seems like self-assurance have continually emphasized on the fact that investors can still make profit even in the winter period. But the question most people’s mind is exactly when crypto winter is going. Maybe when Game of Throne’s winter finally comes – that was a joke.
Why we are in Crypto Winter
There is no particular cause that can be singled out as to why we are in crypto winter. As a matter of fact, the cryptocurrency market has been tagged the most volatile investment market in history. Even if I find this tag a little bit extreme, a direct target on the future of the creation of Satoshi Nakamoto, I just have to agree that the market is volatile. We saw this volatility in the first quarter of 2018, when the uncontended king of cryptocurrency, Bitcoin went down to 3,200 USD from 20,000 USD. This was what introduced the crypto winter. And the fact that almost all altcoins are tied to Bitcoin made the winter somewhat look like Antartica. Bitcoin didn’t just go down alone, it took big guns like Etherum and Ripple with it. To answer the question as to if the crypto winter will stop soon, we will have to take a look at why in the first place, crypto winter came.
One of the main reasons that crypto winter came was because of the saturation of the cryptocurrency space by altcoins. During the last quarter of 2018, altcoins were numbering over a thousand. The advent of these new altcoins give way for unmitigated problems that were boggling on the very reason why the cryptocurrency existed. Most people were creating altcoins for the sole purpose of making money, others wanted to make this money by leading the public with wrong information.
Another thing that led us into the crypto winter is the institutional and regulatory pressure. The global issues like the trade tensions, the anti-cryptocurrency policies by Government and major key plays in the financial industries, as well as global events like Brexit have contributed to the winter session. Also, the Security and Exchange Commission (SEC) has over the past year refused all attempts to list big giants like Bitcoin and Ripple. They have repeatedly reiterated their stand on the fact most of the practices are not in compliance with the SEC guidelines.
Will it End Soon?
In an attempt not to bore you with all the story of how we got into crypto winter, let’s answer the question at hand. Firstly, the creation of Bitcoin ETF has somewhat given the cryptocurrency world hope that it will attract institutional investors. Getting institutional investors into the cryptocurrency market will of course solve the problem of volatility in the market. It will also solve some of the regulatory loopholes that are in the system. This, coupled with the emergence of the backing of cryptocurrency by government bodies of the world is a good sign the crypto winter is coming to an end. Also, there are now strict policies set in place to regulate the number of altcoins that are coming into the cryptocurrency market. Some cryptocurrency experts have however predicted that 2019 will be a year that most of the already existing altcoins will disappear, paving way for the authentic currencies. So yes, crypto winter will be coming to an end soon. But then again, crypto winter is something that the cryptocurrency sphere cannot do without. There will be another crypto winter, and another…