Crypto winter: What does it mean, and could it extend into an 'ice age'?

cnbctv18.com:

The cryptocurrency market goes through cycles similar to the stock market. Just like the bear phase in a stock market, when negative investor sentiment drives prices sharply lower for a prolonged period, the crypto market can go on a downward spiral.

When prices drop without any recovery in sight for over a year it is called a 'crypto winter'.Some experts believe the recent sharp sell-off hints at the arrival of winter for cryptos. But some believe it could be worse.

Crypto could in fact be heading for an "ice age," where prices stay low for years and many investors lose interest, Paul Jackson, Invesco's global head of asset allocation research, told Business Insider recently.Last week, bitcoin prices dropped to around $35,000, an almost 50 percent drop from the record high of $69,000 touched in November 2021. For many, this decline is reminiscent of the late 2017-early 2018 crypto winter, when the price of the bitcoin fell by 80 percent to a low of $3,100.Also Read:Take a look at how do crypto-exchanges work?That winter caused the failure of multiple initial coin offerings and led big banks and companies to shelve their crypto plans.

Bitcoin had only rebounded to reach a new high in December 2020, at the onset of the COVID-19 pandemic.What’s driving the 'crypto winter' worries?The US Federal Reserve's monetary tightening to fight inflation and likely interest rate hikes is dampening bitcoin's assumed role as an inflation hedge and affecting investor sentiment, according to experts.The proposed ban on the use and mining of cryptocurrencies in Russia, and ambiguous stance on crypto regulations from governments worldwide is keeping investors nervous. Reports suggest the Joe Biden administration will also be releasing a