Cryptocurrency winter, what is it in simple words and how long does it last.

In the world of cryptocurrency, there are many additional factors that certainly need to be considered when investing in different coins. For example, the crypto winter, similar to the seasons, also affects earnings. 

In this case, it is important to consider how long the crypto winter lasts, and in general, what the crypto winter is and how it affects the earnings of an investor in simple terms. Understanding what it is and how long it lasts, even without investments, while studying the world of cryptocurrency, will still be necessary. 

What is crypto winter? 

So, what is crypto winter in simple words: it is a general term that is often used in the world of cryptocurrencies. It means that a rather long and difficult process has begun when the prices of digital currencies are falling. That is, it is a process that lasts long enough for investors to notice it. At the same Time, there is also a decrease in interest in certain coins from investors. In general, this leads to a reduction in activity in the cryptocurrency market. Therefore, crypto winter is a phenomenon that can be compared to an economic crisis or recession in traditional economics, but for cryptocurrencies. 

Thus, crypto winter is a moment of cooling interest in a particular cryptocurrency. It usually refers to the decrease in the price of Bitcoin and Ethereum, which are already the most popular currencies. During this period, prices can drop by tens of percent, and trading volumes decrease significantly. For many market participants, this period is felt as a "freezing" of interest in cryptocurrencies, hence the name - crypto winter. That is, it is a rather conditional concept that will certainly be useful for many if they want to invest constantly or for the first time. 

What you need to know about the concept of crypto winter: 

1. During this period, the price decreases for most coins and this happens continuously. Unlike short-term declines, a crypto winter can last for months, and sometimes even years.

2. Also, due to the falling value of coins, the overall market activity decreases. This is also a necessary condition. Many investors and traders leave the market, and trading volumes decrease.

3. At the same time, many companies are actively leaving. Some cryptocurrency projects shut down, companies lay off employees, or cease their activities.

Crypto winter can negatively affect the sentiments of market participants, but many experts believe that it is also an opportunity to cleanse the market of unstable and speculative projects.

What precedes the onset of crypto winter? 

This phenomenon has its reasons. Crypto winter can start in different ways and also last differently. The main reasons: 

1. One of the main reasons can be a price collapse. After a period of explosive growth, the cryptocurrency market often faces a correction, when investors massively lock in profits, which leads to a price drop.

2. There is also pressure from so-called regulators. When governments and financial regulators start imposing restrictions or new laws, it can cause concern among investors. For example, a ban on trading cryptocurrencies in some countries leads to a capital outflow from the market.

3. Scams are equally harmful. The cryptocurrency industry attracts not only honest investors but also fraudsters. After numerous scams and Ponzi schemes, many lose trust in cryptocurrencies, which can also contribute to a crypto winter.

There is often a decline in interest in the moments as a whole. This is also a natural occurrence for the market. When cryptocurrencies become less interesting to the general public and there is less news about them, this also leads to a decrease in market activity.

How to understand that crypto winter is coming soon? 

You can determine the beginning of a crypto winter by a number of signs that are easily noticeable even to a novice investor. It is best to track them: 

1. Major cryptocurrencies begin to drop in their value. Bitcoin and Ethereum - the main indicators. If their prices fall and remain at a low level for a long time, this is the first bell.

2. There is also a decline in the overall popularity of cryptocurrencies. During a crypto boom, the media actively writes about cryptocurrencies, but with the onset of crypto winter, the number of news decreases.

3. Also, if the activity on exchanges is declining, then the crypto winter may come quite quickly. Trading volumes decline, and the number of users on crypto exchanges noticeably decreases.

4. Closing of projects. Many startups cannot withstand a crisis and shut down.

All these reasons are more than enough for a crypto winter to begin. 

How long can crypto winter last? 

If a crypto winter has already begun, it cannot last too long either. In general, the duration of such a moment can vary, and it also depends on a number of factors. 

Crypto winter has its so-called cycles. If you look at the history of cryptocurrency, such winters have existed before. The first occurred from 2013 to 2015. It began after the collapse of the Bitcoin price in 2013 when its value sharply fell. This period lasted about two years, and the market recovered by the end of 2015.

The next winter began three years later and lasted almost two years. It started after a rapid rise and subsequent drop in the Bitcoin price in 2017. It lasted about two years, with the market gradually starting to recover in 2020.

Thus, a crypto winter can last from several months to several years. It all depends on the overall state of the global economy, regulation, and investor interest. As for the future, even analyzing how previous crypto winters started and ended, making an accurate prediction remains difficult. 

Actions during a crypto winter 

All experienced investors have their strategies in case a crypto winter occurs. However, for many investors, a crypto winter is a difficult period that requires patience and strategy development. 

First of all, if such a situation occurs, it is essential to review your entire portfolio. It is a good time to analyze your crypto portfolio. Assess which assets are worth keeping and which ones might be better to part with. Many experienced investors believe that a crypto winter is a time to stick to the "HODL" strategy (holding assets for the long term).