By Beau Cline
8 months ago Bitcoin was at an all time high, priced at over 65,000 USD. Today, Bitcoin is going for an astonishing 20,185 USD. That’s a 68% drop in 8 months. This is a strong sign of the 2022 Crypto Winter. However, Bitcoin isn’t the only coin being affected by this crash. Etherium has seen a 75% mark down since its all time high in November 2021. But why is this?
There isn’t any definite answer to this question, sadly. But, we have a few speculations as to why this is. One big reason for this could be people worrying about the tightening of the Monterey Policy. For those who don’t know what that is, it’s essentially the system that controls the nation’s money supply, and makes sure we keep economical growth. United States Federal Reserve Chairman, Jerome Powell, said “the US economy will need tight monetary policy “for some time” before inflation is under control.” In doing so, there will be a weaker job market and some households may experience more struggle.
Another cause for this sudden crash could be the effects of the current war in Russia. Inflation has had its effect on everyone with everyday items like gas, food, and rent prices, all raising to unseen levels. With all of that, people have been reevaluating their spending habits, taking money from their investments, and re-planning pre-scheduled trips all because of inflation.
What does this mean for Crypto investors today? If you are involved in Crypto trading this is the perfect time to start investing in some new coins. While the Crypto markets big coins are getting hit hard, lots of smaller coins take this time to step up and fill the whole that is being created. One example of this is Avalanche. Avalanche is often referred to as an Etherium killer because it can do everything that Etherium can do but quicker, and cheaper. This isn’t the only thing that gives Avalanche its value. it can process up to 4,500 transactions at once, compared to the mere 14 that Etherium can do.
The next question that comes to mind is, when will the Crypto market make its return? While no one knows when the market will for sure make its return, analysts like Shayantani Sanyal have come out and said “Many factors point to a higher bitcoin price, namely greater acceptance by businesses.” Sanyal says that analysts predict that bitcoin could hit 100,000 USD by the end of 2023, while others say bitcoin won’t reach 70,000 by then end of 2022.
These are just some of the effects that come along with this year’s Crypto winter. Although the things that come from a Crypto winter may have bad effects, there aren’t only bad things that come from it. It gives smaller companies the opportunity to show why they might be the next big thing, and can be the beginning of someone’s Crypto fortune.