Cryptocurrency Features

Crypto Winter: Its Effects and What The Experts Say

March 2, 2019
Saad Mohammad

author:

Crypto Winter: Its Effects and What The Experts Say

The cryptocurrency market has experienced numerous highs and lows. The most significant of these was December 2017 when Bitcoin hit an all-time high price of $19,783. Since then, the market has experienced a number of long and deep corrections. Today, the price of Bitcoin hovers around the $3,500 mark, a result of what is turning out to be an extensive bear market, otherwise known as a crypto winter. The collapse began in the beginning of 2018 for a majority of cryptos and has slowly taken its toll. Numerous cryptocurrency startups, and even a few exchanges have altogether shuttered operations, leading many to wonder how much longer the winter can last.

The Unexpected Effects of the Crypto Winter

It’s encouraging to know that a number of crypto companies have managed to operate unaffected during this year’s crypto winter. Many of them managed to do so by taking necessary measures to prepare when the reality of the looming bear market started to set in. They handled their ICO funding correctly and diversified their assets by exchanging crypto for fiat currency. While this went well for companies that prepared, those who did not are feeling the sting. One organization going through widely publicized difficulty is the NEM foundation. As per a Coindesk report, the organization planned to lay off some of its employees due to severe budget cuts.






To reveal the real effects of the crypto winter, Coindesk also surveyed about 66 cryptocurrency startups. The survey aimed to identify the precise impact that the prolonged market downturn has had on the respondents. According to the report, of 45 companies that responded, about 40 of them maintained a positive outlook with regards to the future. However, they all admitted that the current bear market had affected their operations to a bigger or lesser extent. A majority of the respondents expressed that they now remain cautious about hiring new staff or conducting any fundraising.    

Experts Weigh In

Mike Novogratz, CEO of Galaxy Digital, admits that the bear market will most likely continue longer than most anticipate. He tweeted this opinion while reassuring his followers that there is still light at the end of the tunnel. He remains positive that institutional investment is on its way and that the market is bound to recover sooner or later. However, it will take time to get there. In an interview with CCN, Eric Larchevêque, the CEO of the Ledger Foundation, said that the current bear market could last an additional 12 to 24 months. Although he believes that the market will eventually turn bullish again, he admits that it’ll take a while. He further added that his team was taking adoption measures to last the company another two years through the crypto winter.

Mati Greenspan, an eToro in-house researcher, believes that the market is still looking for a new bottom. In a CoinTelegraph interview, Mati stated that while $3,000 seems like a good support price for Bitcoin, the chances are that it’ll go down further to find its fair value. Anthony Pompliano, founder of digital asset investment firm Morgan Creek, agrees with Mati’s sentiments. During that same interview, Pompliano stated that Bitcoin will most likely continue to see lower prices as the market hasn’t found a bottom yet. He predicted that Bitcoin’s new base would possibly be in the $2,000s.

Conclusion

Although the long and cold market we are currently in has had far-reaching consequences for many crypto players (projects, exchanges, and investors alike), all good things to those who wait, and many believe 2019 to be the year that blockchain reaches mass adoption. As was the case in 2017 and 2018, there are still plenty of projects out there that are pushing the envelope when it comes to what cryptocurrencies and blockchain can do for us, and it is only a matter of time that we see these new technologies bring about the change and release the potential we know they have.