The Great Crypto Winter: What Now?

So here we are again friends (yes this has happened before). You’ll need your boots, winter jacket, warm brew and no access to daily charts.

For many of us, this will be our first crypto winter experience. In contrast, others have down the long cold road before. But what exactly is a crypto winter? Let’s take a little journey…

What is a Crypto Winter?

A crypto winter refers to when crypto prices fall and stay low for an extended period of time.

The most recent crypto winter happened in late 2017 and early 2018, when bitcoin crashed as much as 80% from all-time highs and took about 18 months to recover.

(Credit: CNBC)

Tracking the history of Crypto Winters

To understand where we find ourselves today, it can be helpful to delve into the past.

Now past experiences and performance are not a sure-fire indicator of what will happen going forward, History doesn’t always repeat itself, right?

Nor do we want it to in most cases.

Matthew Makowski from Investment U tells us that “The first crypto winter can be traced back to February of 2011. Back then, the price of a single Bitcoin (BTC) hit $1.06. But shortly thereafter, it dropped down to $0.67. The nearly 40% decrease in value was enough for some naysayers to declare crypto dead. If only we had a crystal ball back then.”

“Before 2011 even came to a close, Bitcoin managed to not only reclaim its previous highs, but soar to new ones. It came close to being worth $30 a coin mere months later. And then crypto winter came again. By November, it crashed all the way down to $2.14 a coin.”

Matthew goes on to share that the first real full-scale Crypto winter actually occurred in February 2018. Here, investors saw Bitcoins valuation fall by 65% (ouch!). But again, across 2020 and 2021 BTC rose again to the loft heights of $65k a coin at one point.

If you want a deeper dive into the very brief history of Crypto Winters, check out the rest of Matthew’s article here.

What about now?

Ok, you’ve had a little history lesson and knowing that this has happened before might bring you just about 0.01% comfort in navigating the here and now.

I get the above might not paint a very pretty picture, but sometimes you gotta forget the hopium and look at the facts of the master. Crypto is a new and extremely volatile financial system. It’s the wild west right now, and no one (and I mean no one) really knows how this will play out.

Of course, the key question for everyone in this space today is ‘what do I do now?’.

It’s the million-dollar question, but no one has a correct answer for you, including me. Let’s be clear, I don’t know shit about fuck as the Reddit crowd would say. None of my words are financial advice and all of this is for the purpose of education only.

There are a million opinions online right now about what to do and whether this is the death of crypto (for the thousandth time) or a bump in the road. The economic troubles are by no means exclusive to the crypto world.

The stock market is all over the place, inflation is crippling our ability to spend and get the most bang for our buck, plus our cost of living with the energy crisis is just adding to a bigger fire. Oh, and did I mention the impending threat of a recession?

You get the picture, it’s volatile everywhere right now.

So what does a humble small-time investor do right now? Simply whatever is right for you and your situation. Only you can assess that and make decisions. As I say, you’ll find a slew of rabbit holes to go down telling you to do this or that. But at the end of the day, you call the shots.

Some of us will do nothing and sit back like a stoic watching the world move on. We’ll go outside, do other things and will probably forget crypto land altogether for a few years. Whilst others, no doubt, will lose their shit and battle with fears that may very well lead them to make a series of unfortunate decisions.

Life is all about choices. It never asks what you want and it doesn’t care.

Emotions + money are always dangerous. It’s a game that many play but only each of us can control our own journey in it. So what will you do this Crypto Winter? The choice is yours, my friend.

And remember…

A disclaimer, I’m not a financial adviser and none of what I share with you through your screen here is financial advice in any way. Everything shared is for educational purposes only.

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Ross Stevenson

Ross Stevenson

Writer of thoughts, Learning + Career Consultant | Owner www.stealthesethoughts.com and its weekly newsletter.