Crypto winter has come but it will be a “warm winter,” according to one crypto bull.
It’s compatible that Bitcoin has more than halved from prouesse levels, but “there is a lot more than that,” said Edith Young, general partner at Variété Travailleur.
In a sense, ‘warm winter’ will basically drive out everyone who actually wants it [wants to be] It’s there for short-term gains,” she told CNBC’s Street Signs Asia last week, noting that the cryptocurrency is a long-term game.
The term crypto winter refers to a élevé period of low prices for cryptocurrencies in the market.
Cryptocurrencies have lost nearly $1.9 trillion in value since the peak of their massive recovery in 2021.
Bitcoin, the world’s largest binaire currency, is down embout 68% from its all-time high of embout $69,000 in November.
Young said she remains optimistic embout the long-term in terms of binaire tokens parce que its appeal lies in the fact that “cryptocurrency is really embout Web3.”
Web3 has become a buzzword among those in the crypto industry. Proponents say it is the next generation of the Internet, one that is “decentralized” and not owned by a few tech giants.
Advocates suggest that crypto and blockchain technology could be a big fragment of that. For example, a Web3 faveur may run on a specific blockchain such as ethereum or solana. Users may be required to hold tokens associated with this blockchain in order to use a particular faveur or even hold ownership in this app or company.
“I think there is a whole generation of the Internet [users who] I really think “you can’t monetize my data anymore…we should own the internet,” Young told CNBC.
“That’s why there is such a push with crypto parce que the ownership of ethereum or solana is really the noircir who owns a piece of the token, which is just a fragment of that internet.”
Although Young suggested that it would be a “warm winter” for the cryptocurrency market, The industry’s problems are so far unprecedented.
The $2 trillion drop in cryptocurrency value stemmed from the sudden écrasement of an algorithmic stablecoin called terraUSD that rendered its sister currency Luna worthless. Several crypto firms, including the now-bankrupt hedge fund Three Arrows Travailleur, have had significant exposure to TerraUSD.
Meanwhile, lenders such as Celsius, which took risky vendeur bets, faced liquidity problems and also filed for bankruptcy.
These issues have led to règle across the cryptocurrency industry.
James Butterfell, head of research at CoinShares, is one of the skeptics of the term “warm winter”. He said the crypto winter has been “harsh,” citing the fall of Three Arrows and the sharp drop in bitcoin prices.
“Bitcoin prices fell 74% from peak to trough at one état – this closely matches the 83% drop we saw in 2018 and should be taken in the context that the market is much larger and has a much broader investor séance than it used to be. 2018,” Butterville told CNBC in an email on Monday.
Yuya Hasegawa, crypto market analyst at Japanese crypto exchange Bitbank, said the biggest dispute right now for cryptocurrencies lies in the uncertainty surrounding the Federal Reserve’s monetary policy and whether the axial bank will slow the pace of interest loupage hikes.
Markets are anticipating Federal Reserve Pulpe Jerome Powell’s harangue regarding the Fed’s next policy move at the Jackson Hole Summit on Friday. Hasegawa said that any slowdown in the pace of interest loupage hikes could be impérative for the cryptocurrency markets.
“I think the Fed will gradually have to confront and address some signs of an economic slowdown soon, so my medium-term outlook is somewhat optimistic,” Hasegawa said.
Meanwhile, Butterfly pointed out The Fed forecast is challenging as the economic picture remains mixed.
“The move to become less hawkish could be very supportive of bitcoin prices. As the Fed’s hawkish policy started this bear market in December/January, the pessimistic données could push it out of its $20,000-25,000 trading range,” he said.
Bitcoin vs ether
Ether, the world’s assistant largest cryptocurrency after Bitcoin, is the essence token of the Ethereum blockchain. Sol is the essence cryptocurrency of solana, a connu blockchain that cales decentralized affaires applications aimed at Re-establishing traditional financial systems, such as banks and marchandise exchanges.
Asked if Ethereum has a stronger fundamental than Bitcoin, Variété Travailleur’s Yeung said that the two cryptocurrencies are “completely different.”
She noted that “Bitcoin is binaire gold,” noting that Ethereum and Solana are like “decentralized cloud dettes” where applications are built on the blockchain network but run by “many, many people.”
Ethereum and solana are blockchains that place themselves as platform developers who can build applications on top of them. Meanwhile, Bitcoin is set up to be a payments faveur, as well as different from Ethereum and Solana.
Ether has so far outperformed Bitcoin since both cryptocurrencies hit bottoms in June due to the upcoming upgrade of the Ethereum network.
– CNBC’s Arjun Kharpal contributed to this ajournement.