Many cryptocurrency and Web3 project investors are uneasy due to the recent "crypto winter." But a little examination of history reveals that this bear cycle will soon come to an end. In the area, there is still a ton of activity going on. Despite the hairy threats that have been engulfing the cryptocurrency industry since late 2021, bears will not last. Keep in mind that cryptocurrencies have previously experienced a dramatic rebound. So, when will crypto bounce back after the bear season?
Bitcoin (BTC), which peaked at about $18,000 in December 2017, dropped almost 80% of its value over the course of the following year. This was merely to continue on an upward trajectory and reach new heights.
Investor attention changed after the COVID-19 outbreak devastated traditional markets around the world in the first half of 2020. The booming cryptocurrency market was the new area of concentration, as evidenced by the sharp increase in BTC from $5,090 in March 2020 to $68,990 in November 2021.
Even so. Since then, BTC and the larger crypto market have been in a protracted bear market period known as "crypto winter." Today, there are more than 300 million cryptocurrency investors worldwide. It makes sense that many people are anxious about the future. However, it is useful to consider how other cryptocurrencies have performed in the past. Let's examine the behavior of new-age asset classes in the early stages of adoption.
Crypto Bear Season: Finding solace in 2018
It took almost two years for BTC and Ethereum (ETH) to recover their losses from their high in December 2017. Despite this, since the start of the COVID-19 pandemic, BTC and other significant cryptocurrencies like ETH have been among the best-performing assets across all markets.
Since its March 2020 bottom, the S&P500 has recovered by about 70%, whereas BTC has increased by almost 450%. In the same time frame, ETH has increased by more than 1200%. This is true despite the fact that both cryptocurrencies have fallen by over 50% from their record highs (ATHs). It is a sign of the rising interest among investors.
In fact, even prior to the 2018 crypto winter, BTC had seen four separate bear cycles. Before hitting a new ATH, it has always cleverly recovered.
These bear cycles have also lasted anywhere from three months to as long as a year before the start of the subsequent bull phase, which increased bitcoin usage and its price. Despite the fact that volatility continues to be rife across the whole basket of cryptocurrencies now accessible, long-term value investors will find this fact to be incredibly comfortable. When examined over a five-year period, blue-chip cryptocurrencies have never failed to produce market-beating returns as long as you have a long-term investing perspective.
When will the crypto bear season end? When will crypto bounce back?
The crypto-winter will eventually thaw. Similar to the internet boom in the 1990s, many experts agree with this assessment and think that user acceptance of cryptocurrencies is still in its infancy. In spite of the dot com bubble, there was a huge increase in internet users at this time, which ultimately caused many businesses that couldn't survive to fail.
Since then, companies like Amazon, Netflix, Ebay, and others have grown to be multi-billion-dollar brands with enduring significance. Governments are currently working to create frameworks for the entire crypto ecosystem, extending this to the present crypto market. Self-regulation by established cryptocurrency companies is assisting in preventing hostile cyberattacks from shattering investor faith.
