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The recent drop in value of cryptocurrencies has caused traders, commentators and investors alike to speculate that we may be entering into another ‘Crypto Winter’. Characterised by the price of digital assets plummeting by 70 – 95%, the onset can cause the same sense of dread and darkness as its seasonal namesake.
The last time cryptocurrency faced a ‘winter’ was when bitcoin value peaked at approximately USD 19,000 in the December of 2018. What followed was a slow decline (albeit one with short bursts of activity) that ended with the digital asset languishing at approximately USD 6,600 by mid-December of 2019. Across this period, the value of bitcoin fell 84%. This had a subsequent domino impact across the market, as most altcoins (any digital coin or token that is not a bitcoin) followed suit and saw their value plummet too.
But after winter must come spring. The COVID-19 pandemic and subsequent global economic uncertainty began to thaw the prolonged period of slump, and the value of bitcoin increased by 416% during 2019. This was a clear sign that cryptocurrencies were breaking out of the freeze they had been facing.
The bitcoin bull market continued into 2020 and well beyond, with bitcoin reaching a peak of USD 63,000 in April 2021. This was surpassed again in November 2021, when the value of bitcoin increased again to an all time high of USD 68,990.90.
However, since then, the value of bitcoin has shrunk dramatically. At the time of writing, bitcoin is valued at only USD 24263.00. This gradual decline has resulted in whispers across the industry that once again, winter is here.
But what do these rumours mean for
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