Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The crypto market ends the week at a total market capitalization of $2,17 trillion. Bitcoin continues to trade at around $62,300. Ethereum experiences no changes and stagnates at around $2,400. XRP is down by 2%, Solana by 1%, and Dogecoin by 3%. Almost all altcoins are trading in the red, with very few exceptions. The DeFi sector decreased the total value of protocols (TVL) to around…
Crypto Winter 2022: When Will Bitcoin Bottom?
2.3 k views
During the November rally, crypto exchange CEOs and price analysts were confident that Bitcoin would soon reach $100,000.
It didn’t come close. Today, it trades for under $23,000 – 67% down from its all-time high.
Fear is in the air. Crypto companies need to be doing better. Theories of an extended “supercycle” bull market have expired and been replaced by acceptance of the “crypto winter.” The only question that remains is: when will it end?
Read below to learn what to expect for cryptocurrency prices based on previous bear market cycles. We’ll also examine the key differences surrounding this particular winter and where industry experts think the market will go next.
What is a Crypto Winter?
A Crypto winter is when cryptocurrency prices have dropped substantially and stayed low for many weeks or months. It often follows a historic rally to all-time highs, from which the market corrects by as much as 80%.
Crypto has always been a highly volatile asset class, so such troughs are familiar and expected among industry veterans.
Reviewing Previous Crypto Winters
Crypto winters (and their counterpart, “crypto summers”) have historically alternated in periodic four-year cycles. 2013, 2017, and 2021 each marked rallies to new all-time highs, whereas 2014 and 2018 made for pronounced bear markets.
Four-year cycles are thought to be triggered by Bitcoin’s supply issuance schedule. The cryptocurrency is programmed to cut rewards for Bitcoin miners approximately every four years, creating supply shocks that pump its price about a year down the line.
These have historically culminated in overzealous market bubbles, which eventually burst, thus creating a crypto winter.
For example, Bitcoin experienced a reward “halving” on July 9th, 2016, from 25 BTC to 12.5 BTC per block. The asset entered a year-long bull market afterward, touching $19,000 before retracing to $3200 in December 2018.
What’s Different About Crypto Winter 2022?
Well, it’s been another four years since 2018, and we’re in another bear market. Same same, right?
Not exactly. While crypto did seem to rise and fall on schedule, new forces are guiding the market’s movements besides Bitcoin’s code.
A New Type of Leverage
Leveraged trading has been around for years but has taken on a new form over the past few years. In 2017, it was mostly provided through crypto trading platforms to retail investors through derivatives products.
By contrast, leverage in 2022 was highly concentrated among trading and lending firms using retail depositors’ money. These firms – the modern equivalents of shadow banks – attracted depositor money through the promise of yield generation on their crypto assets. That brings us to the second point:
Risky Yields
From defi protocols to centralized lending, crypto today is rife with promises of unsustainable yield dwarfing anything available in the fiat market.
Similar Ponzi schemes have taken off in previous cycles (see BitConnect). However, modern platforms often present their yield products as risk-free “savings” or “interest” accounts. This lures unsuspecting investors into gambling away their funds.
For instance, the former “stablecoin” TerraUSD once generated 20% APY for holders on Terra’s Anchor Protocol but has since lost virtually all its value.
Crypto lending platform Celsius offered 17% APY on some assets before June’s market collapse. It became the first platform among many to publicly halt user withdrawals as it hurriedly paid down highly leveraged positions in the defi space. It has now filed for bankruptcy without guaranteeing users to see their funds again.
3AC and Crypto Contagion
The industry’s risky lending practices extended to defi and one another. For example, the crypto hedge fund Three Arrows Capital (3AC) was liquidated on multiple loans and rendered insolvent in June.
This led to liquidity issues at numerous other platforms. As dominos continued to fall, crypto exchange FTX had to step in with capital to stop the bleeding.
Industry Turmoil
Yet even the better-managed crypto heavyweights have been battered in recent months. Mass layoffs have been announced everywhere, from lending firms like BlockFi to ASIC providers like Compass to exchanges like Coinbase.
OpenSea – the world’s largest NFT marketplace – announced a 25% downsizing this month. CEO David Finzer blamed an “unprecedented combination of crypto winter and macroeconomic instability when explaining the decision.”
This brings us to our final point:
Central Bank Pressure
The crypto winter timeline has coincidentally lined up with historic interest rate hikes from the Federal Reserve. In its war to combat raging inflation, the Fed has sent waves of fear throughout crypto and the entire stock market.
Unlike historic cycles, Bitcoin and cryptocurrencies trade closely with high-beta tech stocks. In other words, when something hurts the stock market, it hurts crypto too.
When Will the Crypto Market Bottom?
With so many factors in 2022, how can we know what’s next for the market?
Technically, we can’t – but we can make informed estimates based on historic events. So here’s what industry leaders and analysts are predicting:
Grayscale: 250 Days to Go
Grayscale – the single largest Bitcoin fund in the world – claimed in its July 2022 investment report that the bear market has only just begun.
Specifically, it marked June 2022 as the beginning of a new cycle, and crypto winter after Bitcoin’s market price fell beneath its realized price. In crypto, “realized price” is the average price at which all coins were last purchased.
Based on comparisons to when the indicator had flashed in prior cycles, Grayscale estimated that the crypto market would bottom in about 250 days.
Korbit: Before the End of the Year
The South Korean crypto exchange Korbit predicts that Bitcoin will rise before the end of Q4 as the Federal Reserve loosens monetary policy.
“This market downturn is similar to the ‘third crypto winter,’ which the markets experienced between the end of 2018 and early 2019,” said Jeong Seok-moon, the head of Korbit’s research unit.
According to Jeong, a tightening of monetary policy had sparked market downturns towards the end of 2018 as well. Likewise, he believes forecasting the crypto market’s recovery will largely relate to forecasting the central bank’s next move.
SBF: The Worst Has Passed
Sam Bankman-Fried – a crypto billionaire and CEO of FTX – sees little reason to think the worst of crypto’s crash may not have passed already.
The CEO has been involved in numerous institutional rescue attempts and bailouts amid the latest market turmoil. As someone with an insider’s perspective, he claimed early this month that only a few small exchanges are still at risk of total failure.
In an interview later that week, he claimed Bitcoin’s retrenchment below $30,000 was driven by the macroeconomy, rather than crypto-specific factors. Overall, he thinks it’s oversold.
“At this point, the current we’ve seen in markets I think is out of line with what three percent interest rates would normally represent,” he said.
Conclusion: Will Crypto Rise Again in 2022?
Though theories vary slightly, there’s overlapping agreement that Federal Reserve policy will play a hand in crypto’s short-term fate. Meanwhile, the crypto-specific crises may have already decreased.
Btc
Bitcoin
$62.547
price
price
0.84959%
price change
Most don’t expect the industry to stay underwater for more than a year. Some investors are choosing to buy now before prices rise again – whenever that may be.
Previous
ProBit Global – A Platform Allowing Traders to Exchange Bitcoin and Altcoins
Next
CoolWallet Pro – An Advanced Cold Storage Solution for Your Cryptocurrencies
Written by
Andrew Throuvalas
@andrew
476 posts
More author posts
Sam Bankman-Fried May Now Contact FTX Employees — But There’s a Catch
Lawyers for FTX’s disgraced former boss, Sam Bankman-Fried (SBF), have reached an agreement with prosecutors allowing him to contact certain FTX employees. Besides certain restrictions, the 30-year-old may contact such parties through a host of new mediums. The New Rules Updated terms surrounding Bankman-Fried’s contact restrictions were sent to Lewis A. Kaplan – a judge for the Southern District of New York – in a letter on Monday. Bankman-Fried’s lawyers said the updated conditions were a response to the government…
2 years ago
Uniswap Centralized? A16z Flexes Voting Power to Crush Governance Proposal
The popular decentralized exchange, Uniswap, is having one of its latest governance proposals stonewalled by the crypto venture capital giant Andreesen Horowitz (a16z). The ongoing proposal vote, which ends on February 10, is currently 38% weighed against the change – almost entirely due to the software investor. So Much for Decentralization The proposal, tabled by 0xPlasma Labs on February 2, would have Uniswap v3 deployed to BNB chain. To enable the deployment, the proposal chose to use Wormhole – an…
2 years ago
Silvergate Bank Hit With Fraud Probe Over FTX-Alameda Relationship
Crypto bank Silvergate is under investigation by the US Justice Department’s fraud unit for its dealings with FTX and its sister trading arm, Alameda Research. The investigation is reviewing accounts concerning both businesses, which have been widely accused of engaging in a multi-billion dollar fraud using FTX customer funds. What Happened at Silvergate? As reported by Bloomberg on Thursday, the La Jolla, California-based bank hasn’t been accused of any wrongdoing, and investigations could end without any charges being laid. However,…
2 years ago
Bitcoin Should be Banned in the United States: Charlie Munger
Berkshire Hathaway’s vice chairman, Charlie Munger, called for a ban on cryptocurrency in the United States on Monday, similar to the one in China. In an op-ed published with the Wall Street Journal, Munger argued that Bitcoin isn’t a currency, commodity, or security, but simply a form of gambling “ with a nearly 100% edge for the house. As such, the enactment of a federal law should ban such things from happening. Munger cited the Chinese communist party’s ban on…
2 years ago
Oxford Student Jailed After Stealing $2.4 Million Through Crypto Scam
Wybo Wiersma – a 40-year-old Oxford University graduate – has been sentenced to four and a half years in prison after scamming over $2 million in crypto from unsuspecting victims. Following his arrest in 2019, the Netherlands extradited the Dutchman back to the United Kingdom (UK) in 2021. Following a five-year investigation by the South East Regional Organised Crime Unit (SEROCU), he pled guilty on January 26 to the Oxford Crown Court. A Five-Year Investigation As reported by the Daily…
2 years ago
Like FTX, Celsius Used QuickBooks to Handle its Accounting
An independent examiner has revealed shocking details surrounding the inner workings of Celsius – a crypto lender that filed for bankruptcy in July 2022. The examiner claimed that Celsius did not operate by the business model that it presented to customers. He likened it to a Ponzi scheme, much like FTX – a company that happened to have used the same accounting software: QuickBooks. The Truth About CEL Token Per a filing from examiner Shoba Pillay on Tuesday, Celsius had…
2 years ago
Publish your own article
Guest post article. Guaranteed publishing with just a few clicks
START PUBLISHING ADVERTISE WITH USBrowse categories
Explore trending topics in the crypto community right now.
Bitcoin
SEC Greenlights Multiple Bitcoin ETFs, Signaling Major Leap for Cryptocurrency Markets
The U.S. Securities and Exchange Commission (SEC) has made a landmark decision by approving 11 spot bitcoin exchange-traded funds (ETFs). This move represents a significant moment in the cryptocurrency industry, marking a shift towards greater institutional adoption and accessibility for investors. The approved ETFs include products from major firms such as BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, ARK 21Shares Bitcoin ETF, Bitwise Bitcoin ETP Trust, WisdomTree Bitcoin Fund, Fidelity Wise Origin Bitcoin Trust, VanEck Bitcoin Trust, Invesco Galaxy Bitcoin…
Marius Bogdan Dinu 
@bdinu89
@bdinu89
1 year ago 
596 views
Bitcoin Should be Banned in the United States: Charlie Munger
Berkshire Hathaway’s vice chairman, Charlie Munger, called for a ban on cryptocurrency in the United States on Monday, similar to the one in China. In an op-ed published with the Wall Street Journal, Munger argued that Bitcoin isn’t a currency, commodity, or security, but simply a form of gambling “ with a nearly 100% edge for the house. As such, the enactment of a federal law should ban such things from happening. Munger cited the Chinese communist party’s ban on…
2 years ago 1.5 k views
Tesla’s BTC Positions Remained Unchanged in Q4 of 2022
According to a new earning report from automotive manufacturer Tesla, the company did not sell any of its BTC holdings in the fourth quarter of 2022. Amid speculations that the company had traded BTC during the testing bears, CEO Elon Musk revealed it was yet holding on to its BTC stash. Tesla Maintains Holdings After Initial Sell-Off In Q2 of 2022, Tesla opted to sell 75% of all its BTC. The car manufacturer received close to $950M in exchange. Notably,…
2 years ago 1.5 k views
Here’s When Grayscale Debates the SEC in Court on its Bitcoin Spot ETF
The District of Columbia Court of Appeals has marked a date for when Grayscale and the Securities and Exchange Commission (SEC) may present oral arguments regarding the approval of a Bitcoin spot ETF. Each side will present its case at 9:30 am ET on March 7, with the SEC arguing against the product, and Grayscale arguing in favor. Grayscale VS SEC The court date – revealed in a court order filed on Monday according to CNBC – is much earlier…
2 years ago 1.8 k views
Ethereum
Ethereum’s Zhejiang Staking Withdrawal Testnet for Shanghai is Live
At 15:00 UTC on Wednesday, the much-anticipated Zhejiang testnet for staking withdrawal went live on Ethereum’s Beacon chain. Zhejiang will enable the testing of the Ethereum Improvement Proposal (EIP) 4895 which allows for staking withdrawals. This is in preparation for the network’s next major update, the Shanghai hard fork slated to launch sometime in March. Users Can Make Simulated Withdrawals with Zhejiang In a tweet yesterday, DevOps engineer at Ethereum foundation Barnabas Busa gave details about the Zhejiang testnet slated…
2 years ago 1.6 k views
Ethereum Devs Disagree Over Technical Tweak as Shanghai Upgrade Nears
Post-merge Ethereum users have been eagerly awaiting the commencement of the network’s next major upgrade, Shanghai. However, after over 3 months of prep time, it appears the Shanghai rollout isn’t going as smoothly as expected. What Exactly is the Shanghai Upgrade? In September last year, the much-publicized Ethereum Merge also known as the Ethereum 2.0 upgrade went live. Ethereum underwent some significant changes as its consensus mechanism transitioned from proof-of-work to a cost-efficient proof-of-stake system. However, since the Beacon launch…
2 years ago 1.6 k views
FTX Hacker Converts 50k Stolen ETH to BTC
Per a report from blockchain analysis firm Chainalysis, the attacker behind the Nov 11 FTX exploit, is converting the stolen ETH to Bitcoin. There were muted fears the seemingly inexperienced perpetrator could dump all its ETH holdings. On Sunday, the attacker dumped 50k ETH on-chain, with ETH's price dipping by almost 7%. https://twitter.com/chainalysis/status/1594349583416840199?s=20&t=pgvQHeVytI20eKQ1ls9bxw Hacker Moves 50,000 ETH to New Address Over the past week, the perpetrator had been steadily swapping the cryptocurrencies they had carted off for Ether tokens. This…
3 years ago 1.9 k views
Censorship Concerns: 51% of Ethereum Blocks Now OFAC Compliant
According to new data, over half of the blocks on the Ethereum network now reportedly comply with the US Treasury OFAC’s standards. This comes roughly a month after the platform’s monumental merge update. Phasing Out Tornado Cash The Office of Foreign Assets Control is the intelligence and enforcement agency of the US Treasury Department. Indeed, the OFAC administers and enforces US financial sanctions. A prime example of this is the recent, highly-publicized ban on crypto mixer Tornado Cash. According to…
3 years ago 1.8 k views
Trading
How to Leverage Arbitrage Opportunities in Crypto Markets
Cryptocurrency arbitrage has become an increasingly popular investment strategy as the crypto market grows and evolves. Arbitrage involves taking advantage of pricing discrepancies between markets or exchanges to profit. Investors can leverage profit opportunities by understanding cryptocurrency arbitrage while managing associated risks. In this guide, we'll explore cryptocurrency arbitrage and how it works. A Bitcoin-related example will help us illustrate the concepts of this strategy. What is Arbitrage and How Does it Work in Crypto Markets Crypto arbitrage trading is…
2 years ago 3 k views
The Different Types of Copy Trading in Crypto
Are you interested in trading cryptocurrencies but feel intimidated by the complexity of the process? Copy trading is a great way to get into crypto without needing to be an experienced trader. With copy trading, investors can benefit from the experience and knowledge of more experienced traders, allowing even beginners to succeed. How does copy trading work, and which tips do you need to know to succeed? In this article, we'll explore all aspects of copy trading in crypto. What…
2 years ago 1.7 k views
How to Spot an Unsafe Crypto Exchange
Cryptocurrency exchanges have become increasingly popular as they provide a platform for people to buy and sell digital assets. Unfortunately, not all crypto exchanges are safe or reliable. With the rise of cybercrime and fraud, you must learn to spot an unsafe crypto exchange before investing your money. This guide will help beginners identify and avoid potential risks when selecting a cryptocurrency exchange. The Role of Crypto Exchanges on the Digital Assets Market Cryptocurrency exchanges play a crucial role in…
2 years ago 2.2 k views
What Is Grid Trading in Crypto?
Crypto grid trading has become a popular strategy because of its ability to help traders capitalize on market volatility. Grid trading means you can produce consistent profits by taking advantage of price differences in different markets or time frames. By establishing buy and sell orders at predetermined intervals, you can take advantage of these fluctuations in an automated way. This guide will explore the different aspects of grid trading and provide an overview of its benefits, challenges, and more. Through…
2 years ago 1.6 k views
Tech
Introducing una Messenger: A Paradigm Shift in Blockchain Connectivity
The digital landscape is set for an unprecedented transformation with the introduction of una Messenger, the latest innovation from web3 development powerhouse Wemade. This platform represents an evolution of the "PAPYRUS Messenger," serving as the cornerstone of the ambitious "unagi" initiative, aimed at catalyzing the mass adoption of blockchain technology. The "Unbound Networking & Accelerating Growth Initiative" seeks to bridge the divides between diverse blockchain services and networks, heralding a new era of interconnectedness. A New Frontier in Blockchain Communication…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 574 views
Bit2Me Champions WEMIX Token in Pioneering European Listing
Bit2Me, Spain's premier virtual asset exchange, has recently broadened the horizons for cryptocurrency enthusiasts by listing WEMIX, the cornerstone token of the WEMIX3.0 blockchain ecosystem. This marks a notable achievement as WEMIX's inaugural venture into the European market, emphasizing the token's role in facilitating a range of blockchain-based activities, from gaming transactions to decentralized finance (DeFi) applications. Launched with the intention to democratize access to WEMIX for the 450 million Spanish speakers around the globe, this strategic move aligns with…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 404 views
CryptoVirally Expands with Fresh Crypto Marketing Offers and Cointelegraph Upgrades
In an exciting update for the cryptocurrency marketing landscape, CryptoVirally has announced a series of new entries and enhancements to its already comprehensive range of services. These updates, aimed at providing tailored marketing solutions for crypto projects, include new limited-time offers and expanded options for Cointelegraph publications. Limited Offers: A Game-Changer in Crypto Marketing CryptoVirally's limited offers section presents an enticing opportunity for crypto projects to leverage high-impact marketing services at discounted rates. These offers, available for a limited period,…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 465 views
Breaking Boundaries in Blockchain: WEMIX’s ‘una Wallet’ Sets New Standard for Multi-Chain Asset Management
The WEMIX Foundation has unveiled 'una Wallet,' a revolutionary digital wallet designed to offer unparalleled convenience and security in managing digital assets across various blockchain networks. The announcement, made on January 17, 2024, signifies a new era in the seamless integration of multiple blockchain protocols, including Arbitrum, Avalanche, BNB Smart Chain, Ethereum, Kroma, Optimism, Polygon, and WEMIX3.0. 'una Wallet' is more than just a digital wallet; it represents the culmination of WEMIX's innovative efforts in the blockchain space. It serves…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 592 views