Is a new crypto winter coming?
First you do need to understand that I only did enter the cryptosphere late 2017, and with late I do mean December 2017 and of course way to late to the crypto party to be life changing. So, I can only speak about my own personal experiences.
# Personal
I do think that the stars aren't aligned at all for crypto. So, I do see a crypto winter coming or at least a very nasty fall. And yes spring and summer will come back. No doubt about it and nobody knows when this will be.
The biggest difference for me in contrast with my first crypto winter (if a winter is coming) is that back then I heavily (at least compared to the household wallet) into crypto. There were points that 80% of my investment was virtually lost. I was in for 15K euro.
This time, I do have a relatively firm portfolio, which is rather diverse and my investment at the moment is only 1.5K euro, which is a huge difference compared to then. Combined this lower investment with the fact that I have gone through such a winter and you will understand that I don't sleep worse or do have a lot of thoughts about it. If I would loose that 1.5 K my life won't change.
Also the fact that my crypto now works for me in stead of the other way around is a relaxing feeling.
But the difference is that I still do have the plan to withdraw 500 euro on a monthly basis out of crypto. We do life now maybe not anymore within 5 to 10 years. So with the drop in value and the idea that this withdrawal my not really hurt my portfolio this will be a lot tougher to achieve. But we will see how that goes.
# Perspective
But the situation now is completely different compared to the dark period in 2018. In those days, just like now lot's of fresh blood and fiat money did enter the market. Lot's of people did get burned. FUD was all over the place. One failed ICO after the other. And while the basis of crypto is still the same, the perspective is different.
We now do have DeFi, NFTs, swaps and so much other stuff, that it is hard to keep up. Lot's more potential of crypto is becoming more obvious to the general crowd. While in those days crypto was for the happy few and you probably didn't have a lot of friend or family members involved in crypto, it is now more wide spread.
But it will be hard to attract fresh blood and fiat money into crypto compared with 2019 and 2020. The situation in the world is completely different.
Inflation starts to hit us hard, more and more jobs are insecure, a stupid was within the eastern part of Europe and so on.
People will not only think twice or thrice, but 4 or 5 times before they will invest new money into crypto.
Without fresh money there are 3 possible scenario's:
- the ones who were in time in did swap a part f their crypto into stable coins will step into the market again and will feel like a kid in a candy store where it look like an all you can eat buffet! This will cause the market to go up and down, buying pressure followed by selling pressure. Investing their stable coins into crypto again and taking a profit shortly after.
- BTC will crush the alt coins. People will try to look for a save heaven and for most BTC looks like a safer bet than most alt coins. But with so many stable coins available that probably is the safest storage at the moment. But hey every Satoshi extra in the wallet, is ... euhm ... an extra satoshi!
- the alt coins will eat BTC. There is alt coins which do have a way better ROI than BTC. Without new fresh fiat money BTC will crush the alt coins or the other way around. The are even possibilities to earn BTC with having other alt coins in the portfolio, so I do think that such a situation is possible.
So yes, it is the same as back then in 2018 and also completely different. I will just continue my operation as normal. Only the investment rate will be lower and the withdrawal pace also. But if I can't sleep at night, it probably won't be crypto related.
Cheers,
Peter
