Crypto Winter Here To Stay? What You Can Expect

Cryptocurrency prices have stooped since hitting all-time highs in early November as the digital assets closely tracked equity markets and took a hit from the gradual rollback of pandemic-era stimulus measures, yet analysts are convinced that the so-called crypto-winter has something to cheer about.

The crypto market has lost more than 40% of its value since hitting an all-time high of $2.95 trillion in November, data from CoinMarketcap showed. The new year brought no respite as the flagship currency, Bitcoin, struggled to break through the $46,000 mark.

The Bloomberg Galaxy Crypto Index has fallen almost 45 percent since its all-time high in November.

Despite the negative sentiments of the markets, many experts claim that the crypto winter is actually beneficial to all. Ethereum Founder Vitalik Buterin said in an interview with Bloomberg that these prolonged crypto winters are important for investors to weed out unpromising projects and find long-term sustainable projects which would be able to outlast the harsh downturns.

Moreover, these bearish phases are being viewed as entry points for new investors. Carlos Betancourt, the founding principal of BKCoin Capital, told MarketWatch in an interview that the downtrend in the crypto market has allowed people to find suitable entry points for them to begin their investing journey in the crypto space.

A crypto winters is also an opportunity for existing investors. They have started taking advantage of the low prices and have started increasing their crypto holdings. Michael Saylor's firm Microstrategy bought 660 Bitcoins at an average price of about $37,865 per coin between Dec. 30, 2021 and Jan. 31, 2022, as revealed in a regulatory filing earlier this month.

El Salvador's President Nayib Bukele also announced on Twitter that he was buying the dip. He said that he bought 410 Bitcoins for just $15 million.