The crypto winter is talked about, but it is only the symptom of a much larger ecosystem. The world we knew before the coronavirus outbreak is changing, and crypto is having a hard time keeping up.
A crisis for all digital players
The media largely conveys the last frost of winter in the cryptosphere. Particular emphasis is placed on the Bitcoin price, which is still very volatile. But the industry is not the only one suffering from the whims of the market. In fact, other digital sectors are also seeing their value decline.
According to a tweet from the co-founder of the medium The big whaleRaphaël Bloch, famous companies like Meta or Paypal suffer the same fate as crypto.
If Tesla’s current setbacks or the lack of interest that Netflix suffers from its subscribers from time to time characterize the news, other companies like Shopify will remain discreet. But the facts are there: All the major sectors that the population fell back on during incarceration due to the coronavirus epidemic look red.
Pandemic and incarceration: the digital turmoil
Is the virus “responsible” for the crypto winter? We would say that it is partial. During the incarceration, the people of the world had to adopt digital solutions, reinforced by the call for telework. A forced enthusiasm that has created a flow of new customers to the largest digital companies. Since digitalisation has become the new way to continue living a semblance of everyday life, investment has also flowed in shifts. After becoming the hot new platforms, companies like Zoom have been the subject of much speculation. The latter has also been taken up by many predictions that the post-pandemic society will be virtual.
In addition to creating a real speculative bubble, the epidemic has weakened the world economy significantly, which is now affected by inflation. It is the same system that will have pulled Bitcoin down after the coin has undeniably moved closer to the fiat system. The abundance of money has returned to its mythical role, and digital players are suffering just as much from the flight of investors as from the lack of certain resources. The war in Ukraine also has its share of responsibility for the crypto winter, although it has helped to temporarily inflate the NFT market.
The crypto winter is not only the result of a political-economic situation
If the release of Raphaël Bloch conveys the fall of the major digital players with accuracy, it is clear that confinement is not the only one responsible for the crypto winter. The containment due to the pandemic has certainly boosted the digital economy, but the imbalance comes mainly from profit. Carried by the new breath that exit from containment gave the industry, for many users put their money in cryptocurrencies before they speculated. The phenomenon lasted too long to not be fatal, accompanied by the madness of non-fungible tokens. However, the latter also appear to be at the end of their tethering.
Only GameFi seems to have been spared by the crypto winter at the moment. According to DappRadar, metaverse and other game-to-earn are doing well in the economy.
The mentality of users may have changed. With the cessation of teleworking and the opportunity to go out, some are undoubtedly less attracted to digital activities. Others, on the contrary, seem to think that the metaverse seems like a good escape from a failing monetary system and a suffering society.
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