Crypto Winter Will Soon Be Replaced By Crypto Spring

After hitting ~$18,000 in December 2017, Bitcoin (BTC) lost nearly 80% of its value over the ensuing 12-month period – seemingly not the best time for the cryptocurrency.

But the year 2020 has come, completely changing our world for the next few years. The COVID-19 pandemic has literally brought down traditional markets, shifting the attention of investors to the growing cryptocurrency market. Thus began BTC’s meteoric rise from around $5,000 in March 2020 to $68,990 in November 2021.

Recently, BTC and the wider crypto market have been in an extended bearish phase, also known as “crypto winter”. There are more than 300 million crypto investors in the world today. It is understandable that many are worried about the future of digital assets. But you know what helps in such a situation? Go back in time and take a look at how cryptocurrencies used to be.

Cryptocurrencies have recovered better than the S&P 500

It took almost two years for BTC and Ethereum (ETH) to make up for losses after hitting a high in December 2017. Despite this, major cryptocurrencies have been one of the most profitable assets in all markets since the start of the COVID-19 pandemic.

While the S&P 500 bounced only ~70% from its March 2020 low, BTC rose ~450% over the same period and ETH recovered over 1200%. This is despite the fact that both cryptocurrencies have corrected more than half of their all-time highs (ATH). From these data, we can conclude that there is an exponential growth in investor interest in digital assets.

In fact, BTC went through four different bearish cycles before the 2018 crypto winter. But the asset recovered quickly each time before reaching a new ATH.

In addition, Bitcoin bear cycles have lasted anywhere from three months to a year. After that came the next bullish phase, which led to further adoption of cryptocurrencies and an increase in prices.

Long-term investors will find this fact extremely reassuring, even though volatility is still prevalent across the basket of cryptocurrencies available today.

Rapid development of technology

Due to the COVID-19 pandemic, which limited the movement of people, the digital economy received a serious boost and has not lost ground since then. Even after the removal of many quarantine restrictions, consumers increasingly chose online shopping.

The emergence of blockchain-based applications, digital assets, and platforms is a classic example of a revolutionary change in consumer preferences. Web3 -focused startups have already introduced digital asset innovations such as non-fungible tokens (NFTs).

Claims by many experts about the incredible prospects of the Web3 industry have prompted Web2 companies such as Meta to increase their investment in Web3 several times over.

It is also worth noting that by 2030 the number of crypto users will more than triple to reach 1 billion, according to a joint study by BCG, Bitget, and Foresight Ventures.

Bright prospects for cryptocurrencies

At the peak of the crypto boom in November 2021, the total cryptocurrency market capitalization exceeded $3 trillion. At this point, a record was also set for the number of investments made in a crypto company.

Venture capital (VC) investments in crypto and blockchain startups totaled $32.7 billion in 2021, according to a JP Morgan analyst. Today, this figure is more than $18.3 billion – in contrast to crypto critics who call the current bear cycle a final capitulation. crypto market.

If anything, the increase in investment only highlights the confidence shown by entrepreneurs and corporations alike toward the crypto industry. Ultimately, their interest should lead to a resumption of the long-term bull trend in the near future.

Cryptocurrencies and the birth of the Internet

People around the world are increasingly choosing to experiment with new technologies and make transactions using digital assets.

According to the Wells Fargo global investment strategy team, the entire crypto market, and cryptocurrencies, in particular, are in a period of “hyper-adoption” – a sign of the impending Web3 revolution.

Many experts share Wells Fargo’s opinion and believe that cryptocurrencies are still in the nascent stage of user adoption, much like the internet was in the 1990s. At that time, the number of Internet users was growing rapidly, and companies had to follow the new technology.

Since then, firms like Amazon, NetFlix, eBay, and the like have grown into multi-billion dollar powerhouses. Will this happen to large crypto companies?

Right now, the crypto market is really just getting started – it’s still not even properly regulated. Many things still remain unknown, and companies have to protect themselves from the same cyber attacks that can undermine investor confidence in the platform or even in the crypto industry.

If we analyze all the above facts, then it would be reasonable to conclude that the crypto market is now in a period of healthy consolidation. Yes, a little scary, but the current situation is definitely not the debilitating and protracted crypto winter that some crypto critics claim.