If you have dabbled in any sort of Cryptocurrency investment over recent months you’ll have no doubt heard about the Crypto winter. We’re all well aware of the highs and lows of digital currency, but the massive drops in value for most Cryptocurrencies and no sign of it increasing anytime soon has led to it being deemed a Cryptocurrency winter – a time when investments should be seriously considered. Everyone will have their own opinions as to when the Crypto winter technically started and what caused it, but most agree that it started around the start of 20222; which is a pretty stark difference from 2021 when it felt as though it was impossible to lose money when investing in Cryptocurrency.

The Cryptocurrency Winter

Cryptocurrency might seem like a new investment opportunity but actually, it has been around since 2009. That said, it really only started picking up in popularity throughout 2017 – which means we don’t really have a long track record of data to see how it is likely to perform throughout this winter period of investment. What we do know is that Cryptocurrency is well-known for its significant highs and lows which makes it a volatile investment at the best of times.

Whether or not you have already invested in a form of Cryptocurrency, you’ll be well aware that it experienced a market crash at the start of 2022. It isn’t just the value of Bitcoin and friends that decreased, but the crash of Cryptocurrency and lending platforms such as Three Arrows and Celsius led to some market difficulties too.

The plummet of Cryptocurrency values is something that has happened before, but not to the depths that we saw throughout the period and not for the sustained length of time we have seen this time. However, towards the latter part of 2022 what we have seen is a slowdown in the decrease in value. That doesn’t mean that values are on the rise as yet, but it does mean that we’re not seeing the levels of decrease that we were previously. This could signify the start of the Cryptocurrency winter thaw, although, of course, we don’t really have any solid track records to look back upon and check.

What Can Be Done?

Realistically Cryptocurrency is a new addition to financial investments so we don’t have a track record of previous actions and if they helped so it is hard to know what can be done exactly. The world is experiencing a cost of living crisis in general with costs on the rise and people unable to afford to live which will undoubtedly affect financial investments like this.

To date Cryptocurrency is unregulated and there are varying opinions as to whether that is a good or a bad thing. Whilst the regulated and non-paper trail element of Cryptocurrency is something that appeals to many it does mean that investors aren’t protected when things like Cryptocurrency platform crashes happen. In the UK, if a bank crashes in a similar way, then balances up to £85,000 are protected by the Financial Conduct Authority – there is no such protection for Cryptocurrency investment balances.

Will Regulation Help With the Crypto Winter?

Some have suggested that central governments may have to step in and more heavily regulate the crypto industry, similar to how they do with the bank sector, gambling industry and PayPal casinos. For example, the UK government have talked openly about Stablecoin and whether that could be an option for those that want to invest in Cryptocurrency. Stablecoin is Crypto that is linked to traditional currency values and as such tends to have a much more stable value – hence the name. It is thought that regulation on this and perhaps other elements of Cryptocurrency could help with confidence in Cryptocurrency investment and that in turn could help the Crypto winter to thaw.

The Future of Cryptocurrency

We have such a short history of Cryptocurrency that we simply don’t have a record to look back on and be able to base predictions on past performance. However, the popularity of Cryptocurrency has continued to rise and this shows no signs of stopping. That doesn’t mean that more people are investing, but it does mean that being able to spend Cryptocurrency at things like coffee shops and online casinos is becoming easier – and that will give people more of a reason to invest.

Different experts all have their own opinions on the Cryptocurrency winter and whether we’ll see a thaw anytime soon.  With 2023 in sight it is pretty certain that we won’t see an end to the Crypto winter in 2022 but many feel 2023 is a year when it just has to happen. When you consider that the UK government are starting to become more open to things like NFT investment and Stablecoin and other governments around the world will likely follow suit, it is easy to see how confidence in this type of financial investment could be on the rise. 

Those that are already interested in Cryptocurrency will be starting to wonder whether now is the right time to invest. With a slowdown seen in the decrease in value, it could be the perfect time to pick up some low-value Cryptocurrency assets and wait for them to increase in value. However, with no one able to say when the Crypto winter will end this is definitely something that should only be considered if you’re looking for a long-term investment. We’re a long way off of the quick buck that could be made with cryptocurrency in 2021. Whatever happens now, we’re likely to see a slow progression which means that it is important you consider the longevity of any investments rather than something you can do now and turn around quickly.

Cryptocurrency isn’t likely to go anywhere anytime soon, but we will see some changes. This could be the collapse of other platforms, it could be regulated and it could even be a change in value for some of the more well-known Crypto brands, we’ll just have to wait and see.