Cryptocurrency, including bitcoin, is experiencing a slump in step with the stock market and other investments. Industry experts are calling this bear market for cryptocurrency a crypto winter. But like a bear market for stocks, the crypto winter will end. Or will it?
Finance experts and retail investors alike are wondering: will crypto recover?
Crypto includes a solid possibility of recovery — many of the top coins should weather the crypto winter and gain value in the long-term. However, cryptocurrency is notoriously volatile, and there's always an opportunity that it will not come back stronger, especially in the case of lower-value and less popular coins.
To essentially understand the chances for cryptocurrency's recovery, it's important to explore a few of the factors driving down the price of bitcoin, ethereum and other altcoins right now.
How Bad May be the Cryptocurrency Crash?
Between Oct. 12, 2021, and Oct. 12, 2022, Bitcoin fell nearly 67%, according to Coinbase. Its current value of $19,587.35 at the time of Oct. 17, is roughly 70% less than its November 2021 a lot of $64,912.20 per coin.
Likewise, Ethereum is down about 64% from this time this past year, and it's lost a lot more than 72% of its value since its peak.
One other altcoins tend to follow Bitcoin pricing trends, and according to CoinMarketCap, the global crypto market has dropped about 60% before year, from $2.3 trillion down seriously to $900 billion.
Since June 2022, the cryptocurrency market has remained relatively flat, ranging between a worldwide market cap around $800 billion to $1.2 trillion. As the 50% rise from $800 billion to $1.2 trillion between June and August 2022 may appear such as a large movement, the cryptocurrency market is naturally volatile, and this kind of move is much smaller than previous bull runs. The cryptocurrency market has ranged lower since August, achieving the current value around $900 billion.
What Makes Crypto Distinctive from Other Investments
Unlike stocks, ETFs or even U.S. savings bonds, crypto is a very speculative investment with no long history of ups and downs. Certainly, crypto has experienced crashes before.
Forbes Advisor reported that the last crypto winter occurred from January 2018 to December 2020. The crypto market has experienced significant dips since 2011, but that pales when compared with the stock market's centuries-long history of losses and gains.
Although crypto is growing in popularity, by having an increasing quantity of companies accepting it as an application of payment, no body knows if today's coins will soon be around decades from now.
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