Are we in the midst of a crypto-winter?
For anyone who’s been following cryptocurrencies over recent years, the last few months have been notably chilly, something of a bear market characterized by uncertainty (until now few people had begun questioning things or analyzing the phenomenon seriously) and in which some investors seem to be losing faith.
From a peak above €56,000 in November 2021 to around €30,000 today, bitcoin has lost almost half its value, putting at risk its use as a currency in El Salvador, as well as the hopes of many companies and individuals to employ it as a shield against inflation. Ethereum, the second major cryptocurrency, is currently undergoing changes that should greatly improve its efficiency, but it has also dropped from more than €4,000 at its peak last November 2021, to around €2,200 today.
What has brought on this early crypto-winter? A lot of people, without really knowing what they’re talking about, dismiss crypto-assets as little more than a Ponzi scheme — as if the dollar or the euro, far removed from the times of the gold standard, are any more reliable — while other analysts tend to see, simply, one more phase in what in economics and finance is called the price discovery process by which the price of an asset in the market is established over time through the interactions of buyers and sellers.
