Cryptocurrencies are a notoriously volatile asset class. They are marked by maximum extremes. And those highs are often followed by big falls. When the price drop is prolonged, it is often called cryptographic winter. We’ve seen them before. And we’ll probably see many more in the future.

The first cryptocurrency winter dates back to February 2011. At that time, the price of a single Bitcoin (BTC) reached $ 1.06. But soon after, it dropped to $ 0.67. The nearly 40% drop in value was enough for some detractors to declare cryptography dead. If only we had a crystal ball then.

Before 2011 came to an end, Bitcoin not only managed to regain its previous highs, but rose to new ones. It was about $ 30 worth of currency a few months later. And then came the cryptographic winter again. In November, it fell to $ 2.14 per coin.

The following years were marked with general indifference on the part of the general population. Bitcoin had its fans. But they were relatively few and far between. However, mining continued. And Bitcoin believers have continued to accumulate more and more cryptography. Slightly below the radar, the value of a single Bitcoin rose to more than $ 1,200 at the end of 2013.

Equally quietly, the value of Bitcoin fell to less than $ 180 a coin in the crypto winter that froze markets in January 2015. However, at this time, the term cryptographic winter had not yet entered the lexicon. There were only speculative bubbles and busts for the few journalists who actually covered cryptography at the time. The term cryptographic winter emerged as an autopsy after the big cryptographic crash in 2018.

The First Real Crypto Winter

In 2017, cryptocurrency became the market. Bankers and financial analysts have begun to take note of this. Retail investments have been bullish. But there were still a lot of people pooping on the idea that this kind of digital currency could actually be made. All the while, the price of Bitcoin and Ethereum (ETH) has skyrocketed.

The price of a Bitcoin has risen from $ 900 to just under $ 20,000 in less than a year. You could not activate the news without someone talking about things. Crypto was the conversation of the city. But as it became mainstream, many of the early adopters read the writing on the wall. It was time to withdraw money. And so, hundreds of cryptocurrencies were minted.

Crypto was so popular in late 2017 that some companies handed out Bitcoin to their employees for holiday bonuses. But the timing was not ideal with a cryptographic winter just around the corner …

Fast forward to early February 2018 and the price of Bitcoin has dropped by approximately 65%. And almost all the tokens out there followed suit. The first “official” cryptocurrency winter has erased the dreams of many investors with an early retirement … As well as their nest. As the year progressed, the cryptocurrency market collapsed by an estimated 80% of the highs at the end of 2017.

When crypto investors sold their stake, the price dropped dramatically. And in what seemed like a blink of an eye, the cryptographic dream appeared dead to young people. Many investors who have reached the high water mark have lost their stomachs because of this. The cryptographic winter continued long after the actual season. Enough time for most investors to eventually sell their stake at a loss.

Following the News

The gift of retrospective gives us the ability to look back and say “of course.” In early 2018, just before the cryptocurrency winter really took hold, the platform began to pile up against cryptocurrencies …

Rumors were circulating that South Korea was going to put the kibosh into the cryptocurrency trade. By this time, Japan’s largest OTC cryptocurrency market had been hacked for $ 530 million. And things haven’t improved for cryptocurrency investors as 2018 has dragged on. Facebook (Nasdaq: FB), Google (Nasdaq: GOOG) e Twitter (NYSE: TWTR) all banned ads for initial coin offers and token sales.

Meanwhile, the keys to the application programming interface in Binance were compromised. This large-scale phishing attempt has paralyzed trade. And at that time, many investors simply had enough.

All of this should sound familiar. Flows and ebbs in the cryptocurrency market follow the news very closely. When PayPal (Nasdaq: PYPL) added a cryptocurrency payment feature in 2021, prices have gone up. When China started talking about a ban on cryptography, it dropped prices. The same thing happened earlier this year when Russia’s central bank began talking about a ban.

Now, following the collapse of LUNA and stablecoin of Terraform, another cryptographic winter is coming. The share price of the popular cryptocurrency exchange Coinbase (Nasdaq: COIN) paints a good picture of how bad things have gone. For its part, Coinbase has begun a freeze on hiring. And another popular exchange, Gemini, is cutting 10% of its staff. It’s ugly out there. But you don’t have a couple of dollars to invest.

The end result in another cryptographic winter

For those who entered during the highs of 2021, we know that it hurts to see your portfolio shrink. Cryptographic markets have been hit. And if history is an indicator, things are unlikely to improve any time soon. The freezing of a cryptographic winter usually takes many months, if not a couple of years, to thaw.

But if you are investing in the long term, now seems like a good time to buy. At least we know you’re not getting the most out of it. And as we have seen before, cryptocurrencies are resilient and cyclical. It’s just that the current cycle may take a while to run.

Meanwhile, we anticipate some slight ups and downs in the crypto markets. But between now and the next halving of Bitcoin (which has historically been a major catalyst for the upward momentum in the cryptosphere), we will double the tokens we think have the best long-term use cases …

The crypts that remain for the next two years could recover to those all-time highs. And finally, sellers will activate another crypto winter after reaching new highs. It is a vicious circle. But it can also be very profitable. If you have a stomach for that.