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Brendon Lim
3 min read

Staying Warm in the Crypto Winter

Staying Warm in the Crypto Winter

One of the benefits of living in a country with a tropical climate is that we never have to worry about the cold. While salting the roads and having an entirely different set of tires just for the snow are concepts that we may never understand, there are types of cold out there that just about anyone can relate to.

In 2022, several incidents caused the shift in the industry and public opinion of crypto in general. Still confused as to what we’re talking about? It’s okay, we’re gonna help you through this.

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What is a crypto winter?

So there isn’t technically a metric to determine, or authorities or regulatory bodies to determine when a crypto winter happens. The truth is, the idea of a crypto winter is a little more abstract than you think — experts describe the signs of winter as declining trading volumes, reduction of staff at crypto exchanges and the loss of confidence in crypto from the general public.

What happens during a crypto winter?

A crypto winter is usually precipitated by events in the market, like a popular crypto losing its value overnight or massive exchanges failing. The fallout from such events can lead to the loss of confidence in the industry, a.k.a the mass selling of crypto holdings. If you take a step back, you’ll essentially see the start of a vicious cycle that is extremely difficult to break.

Because a crypto winter is typically accompanied with people looking to exit the market, exchanges that employ questionable practices face the consequences of their actions. Conversely, those that hold themselves accountable and employ sustainable practices and a compliance-first approach tend to survive to see the spring.

How long does a crypto winter typically last?

If you were hoping for a concrete timeline, or even just any kind of indicator of how long a crypto winter could last, we’ve got some bad news. While traditional markets have bear markets lasting around 10 months, crypto winters are in somewhat uncharted territory, with the first winter (started January 2018) lasting nearly 23 months (ended in December 2020).

Staying warm this winter

No one would hold it against you if you’re feeling a little discouraged after the consecutive black swan events — even the most diamond handed of us have been shaken after the year we’ve had. But if you’re still in this for the long run, here are some strategies that you could adopt:

If we’re being honest, this applies even when the crypto market is doing well — the importance of not overextending yourself beyond your means cannot be stressed enough. You should also do your own research before jumping into anything head first, as some cryptos are more volatile than others.

Dollar cost averaging has been around for as long as volatile markets have existed, and not for no reason. It may be an old strategy, but no one has ever doubted its effectiveness, especially in volatile conditions. Plus, you don’t even have to do it manually anymore — many exchanges (including Coinhako of course) offer a recurring buy feature that can help you buy crypto at fixed,regular intervals.

Try Recurring Buys on Coinhako now

Perhaps the best piece of advice anyone can dispense and receive, may singlehandedly be the reason you make it or break it. It’s easier said than done, but once you are able to keep your composure and remember to DYOR, you’ll be in a much better headspace to navigate even the stormiest crypto waters.

Disclaimer: All writers’ opinions are their own and do not constitute financial advice. As a company, we do our best to provide information that is accurate and valuable. The contents of this blog post are intended for educational purposes only. Individuals are advised to perform due diligence before purchasing any cryptocurrencies as these assets are subject to high volatility, and understand the risks associated with trading cryptocurrencies.

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