Emily Nicholl of Bloomberg says there are some market gaps in the current bear market that were seen in 2018-2019 and early 2020- something that could help it move forward.
The cryptocurrency market is in the grip of an extended recession, with the recent sell-off at peak levels of risk exposure due to stress for many top projects and companies.
Bitcoin is trading at around $20,400 after falling to levels last seen in November 2020, while the total market capitalization currently stands at around $976 billion. The global crypto market cap was above $3 trillion in November 2021.
Crypto Winter is a little different from previous cycles
Emily Nicholl, a crypto analyst at Bloomberg, says that the crypto winter is firmly in the lurch, with market sluggishness coupled with leverage causing major losses to investors and projects. In particular, liquidations expose the entire market to contagion due to a fall in prices.
However, he suggests that the current crypto winter, in which the industry is at the peak of its “Lehman Moment” after a $2 trillion shake-down, is slightly different from previous bear markets.
He Told Bloomberg Television’s “Big Tech” said Monday that one of these increased backing projects is coming from venture capital funding.
She noted, it has several projects that have “access to cash that they can rely on during market downturns, rather than the craze of the crypto market.”
What could happen next in the market, she notes, would be some kind of “seismic” change in the way crypto companies operate.
Aside from companies adopting slimmer staff, many will focus largely on spending – no further splurge on sponsorships and other such deals as was seen during the bull market.