Crypto Winter: Should Bitcoin Be Buried?

At the end of November 2021, bitcoin reached an all-time high. At the time, it cost an astronomical $68,000 to get a bitcoin. The cryptocurrency star has ended a bull run in which he kept his secret. Since then, the value of bitcoin has continued to fall. In one year, its price is divided into four. Now it’s around $17,000.

This Ice Age in the Virtual Currency Market is Called Crypto Winter. In this extremely volatile market, winter can therefore last a year or more. It is impossible to predict the sequence of events in this particularly unpredictable sector. But The near term outlook is not rosy for bitcoin and about 20,000 cryptocurrencies in circulation.

It must be said that the market is shaken by a very large-scale scandal. The FTX platform crash continues to generate massive backlash and discourage crypto-investors. FTX is one of the largest cryptocurrency exchange platforms. Between 10 and 15 billion dollars were transacted in this regard every day mega wallet for buying and selling virtual currencies.

The problem is that FTX was less robust than it appeared. After the rumors about the failure of the platform, many users wanted to recover their marbles at the same time. FTX could not cope with it “crypto bank administration”. Lacking enough cash to pay its customers, the platform froze their accounts before declaring bankruptcy. Its founder and CEO Sam Bankman-Fried saw his fortune go from $32 billion to zero in a matter of hours. of suspicion of law violations now attract his former boss, who uses his clients’ funds to invest in his business and make ultra-risky investments.

The failure of a reputable platform like FTX, which has important interactions with other players in the cryptocurrency sector, mainly the imperfections of an unregulated market. With pending regulations such as the European MiCA framework expected for 2024, investors entering this market should be aware that they are poorly protected. Investing in cryptocurrency means exposing yourself to high asset volatility, hacks, scams, and unreliable FTX-like players that are difficult to reverse. In short, it is risky.

However, risk is what many investors today want to protect themselves from. Since the beginning of the year, the economic instability caused by the war in Ukraine, the energy crisis and the rapidly increasing inflation have distracted investors from the riskiest products. This is the case in traditional financial markets. And this is more common in the ultra-risky cryptocurrency market.