- Crypto Winter is a prolonged bear market where crypto industry sees a long downturn in cryptocurrency prices.
- The term is basically based on the concept of “Winter is Coming” from the HBO series Game of Thrones, where it portrays the season of winter as a time of difficulty.
As the cryptocurrency market grows, more and more investors are interested in trading these digital assets. But a major question always remains in the mind of a new investor or trader: what is a crypto winter? Often, they also get frightened about this term and find out how to survive it.
Crypto Winters- A Prolonged Bear Market
Crypto winter refers to a prolonged bear market in which the prices of cryptocurrencies see a significant decrease. The term was first used in 2018, when the crypto market saw a major downturn in prices as well as market capitalization. The situation also describes the disinterest of crypto investors in the market.
It can be caused by several reasons, such as economic mishaps, regulatory issues, market saturation, and many more. The period is often recognized as the market situation where bears are dominating against bulls and continuously declining the price of cryptocurrencies.
The investor often began to sell their holdings and get out of the market, assuming the market would never bounce back. But the period is not, and once it gets over, things get back to normal. The crypto market has seen two crypto winters in its history of crypto one in 2018 and another in 2022.
How To Survive The Crypto Winters?
Investors often got scared when they heard the name of crypto winters. It’s important to understand how to stay afloat in this difficult situation in the world of cryptocurrency. Here, are 5 tips to help you survive it.
1. Take calculated risk
As this is a tough situation, you should always take calculated risks. You should always make a decision on the basis of your affordability. Trading in this type of situation must be highly risky, so you should always set a prioritized amount of loss in your mind.
2. Carefully evaluate each crypto project before investing
During the crypto winter, you should carefully evaluate each project before investing. Evaluation means seeing the future prospects of the project, its market capitalization, total value locked, and its current status. This will help you make an appropriate decision.
3. Make your investment portfolio diverse
You should always invest in different asset classes so as to minimize your investment risk. For instance, if you have invested in Bitcoin, you may prefer to buy stablecoin, as one is highly volatile and the other is less volatile. However, this is not an investment decision, it’s just to tell you how you should minimize your risk.
4. Don’t Believe on Everyone’s Advice
Always do your own research before investing in any cryptocurrency or crypto project. Don’t believe anyone blindly, as there are many fake crypto enthusiasts who market themselves as the gods of the crypto industry. So, believe in yourself better than others.
5. Be Relaxed
Investors panicked when they heard the word “crypto winter”. But, in this situation, you should be calm and relaxed, as it is not a permanent one. It will get over after some time, and things will get back to normal. Also, it’s unclear how long it will last. So, don’t get panicked; be relaxed.
Conclusion
In a nutshell, the crypto winter is a tough situation for the crypto market. Also, it panics the investor’s mind, and they often make wrong decisions. So, you should know that it is a temporary factor and always be relaxed. You can also follow the survival tips we have mentioned above.
