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 such as 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 potential for recovery — lots of the top coins should weather the crypto winter and gain value in the long-term. However, cryptocurrency is notoriously volatile, and there is always a chance that it won't keep coming back stronger, especially in the event of lower-value and less popular coins.
To essentially understand the chances for cryptocurrency's recovery, it's crucial that you explore a number of the factors driving down the price of bitcoin, ethereum and other altcoins right now.
How Bad Is the Cryptocurrency Crash?
Between Oct. 12, 2021, and Oct. 12, 2022, Bitcoin fell nearly 67%, based on Coinbase. Its current value of $19,587.35 by Oct. 17, is roughly 70% less than its November 2021 most of $64,912.20 per coin.
Likewise, Ethereum is down about 64% from this time around last year, and it's lost significantly 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% previously year, from $2.3 trillion down seriously to $900 billion.
Since June 2022, the cryptocurrency market has remained relatively flat, ranging between a global 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 seem such as for instance a large movement, the cryptocurrency market is naturally volatile, and such a move is significantly smaller than previous bull runs. The cryptocurrency market has ranged lower since August, achieving the current value of about $900 billion.
What Makes Crypto Distinctive from Other Investments
Unlike stocks, ETFs as well as U.S. savings bonds, crypto is a highly speculative investment without a 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 keeps growing in popularity, by having an increasing number of companies accepting it as a questionnaire of payment, no-one knows if today's coins is going to be around decades from now.