Cryptocurrency experts are worried that we’re about to see a “crypto winter” — a spell of time where cryptocurrencies drop in value.
The news: The cryptocurrency market recently saw $130 billion wiped away from its value in 24 hours, as I reported for Deseret News.
- Experts see this recent dip as the first sign of crypto winter.
Why it matters: More and more people are investing in cryptocurrency. But a huge dip has worried investors that the investment might not have been a good move.
Details: The drop hurt all major coins from Bitcoin to Ethereum. Dogecoin and Shib coin suffered some drops, too.
- Bitcoin and Ethereum dropped so low they were 50% lower than their all-time highs, according to CNN.
- “The movements in cryptocurrency markets have been correlated to the selling seen in higher risk assets like technology stocks as investors prepare for tighter monetary policy from the U.S. Federal Reserve and higher interest rates,” according to CNBC.
What they’re saying: “It’s during crypto winters that the best entrepreneurs build the better companies,” said David Marcus, the former head of crypto at Facebook-parent Meta, in a tweet. “This is the time again to focus on solving real problems vs. pumping tokens.”
Yes, but: Nadya Ivanova, chief operating officer at the BNP Paribas-affiliated tech research firm L’Atelier, said the cryptocurrency winter might not be all that bad. But, she said, the market is cooling down, per NBC News.
- “Over the last year — especially with all the hype in this market — a lot of developers seem to have been distracted by the easy gains from speculation in NFTs (non-fungible tokens) and other digital assets. A cooling off period might actually be an opportunity to start building the fundamentals of the market.”
The bigger picture: The large dip in cryptocurrency isn’t exactly surprising since crypto has a volatile market. Small dips have a tendency to rebound and bring values back up. So it’s something to watch moving forward.