All cryptocurrencies have suffered a comparable fall at the same time. The global crypto market has fallen to US$1 trillion, from an estimated US$3 trillion (RM13.3 trillion) as recently as seven months ago, according to the website Coingecko. — Bloomberg
With Bitcoin losing 65% of its value since its all-time high in November 2021, the global cryptocurrency market falling below US$1 trillion (RM4.4 trillion), and layoffs on the horizon at major cryptocurrency firms, in recent weeks - all industry indicators have been showing red. So much so that there is now talk of a "crypto winter."
Could the cryptocurrency market be fizzling out, or is it just going through a bad patch? The sector is clearly contracting, after an incredible rise in 2021. Experts are now even talking about a "crypto winter," a nod to the series Game of Thrones and the House Stark motto, "winter is coming," a kind of warning that a lasting conflict could erupt at any time. And this seems to be exactly what's happening with cryptocurrencies.
The notion of the "crypto winter" first appeared in late 2018, in the midst of a previously frosty period for the market. From January 2018 to December 2020, the price of cryptocurrencies fell sharply and remained for many months at a more or less stable level. It was a "winter" that lasted almost two years, before prices soared again. And the term "crypto winter" describes precisely this kind of long period of contracting prices, which can last several months.
After an uptick in 2021, prices for all cryptocurrencies have been steadily falling since January. Bitcoin, one of the main indicators of the sector's health, has now hit an 18-month low. In November 2021, it was at its highest level ever, at one point exceeding US$68,000 (RM300,458). It has now fallen below US$25,000 (RM110,462).
And Bitcoin is no exception. All cryptocurrencies have suffered a comparable fall at the same time. The global crypto market has fallen to US$1 trillion, from an estimated US$3 trillion (RM13.3 trillion) as recently as seven months ago, according to the website Coingecko, which lists more than 13,000 different cryptocurrencies.
The consequences of this are therefore being felt directly in investors' wallets, but also among the market's main players, some of which are experiencing financial difficulties. Coinbase, for example, one of the world's largest cryptocurrency exchange platforms, is extending its hiring freeze and cancelling job offers. In general, crypto companies around the world are downsizing to survive this "winter."
But volatility is inherent to the nature of cryptocurrencies, so experiencing such "winters" – with varying degrees of length and severity – is par for the course. And while the market might feel frosty right now, prices can rebound faster than expected. The progress of the war in Ukraine will partly determine the outcome of this "winter," as Russia is a major player in cryptocurrencies, especially in terms of mining. – AFP Relaxnews
