Bloomberg’s Emily Nicolle says that the current bear market has some market differences to what was observed in 2018-2019 and early 2020- something that might help it going forward.
The cryptocurrency market remains in the grip of a prolonged downturn, with the risk of sentiment hitting extreme levels in a recent selloff exacerbated by pressure on several high-profile projects and companies.
Bitcoin trades around $20,400 after dipping to levels last seen in November 2020, while the total market capitalization currently stands around $976 billion. The global crypto market cap was above $3 trillion in November 2021.
Crypto winter slightly different from previous cycles
Bloomberg crypto analyst Emily Nicolle says crypto is firmly in crypto winter, with the market allying with leverage hurting investors and projects alike. In particular, liquidations due to lower prices expose the entire market to contagion.
However, she suggests the current crypto winter, which has the industry on the cusp of its own “Lehman moment” after a $2 trillion shake down, is slightly different from previous bear markets.
She Told Bloomberg Television’s “Big Take” on Monday that one of them is the increase in supporting projects getting venture capital funding.
This, she notes, has several projects having access to “cash that can rely on during the market downturn rather than being at the whim of the crypto market itself.”
On what might happen next in the market, she notes, there will be a sort of “seismic” shift in how crypto companies operate.
Apart from companies adopting a slimmer staff, many will likely look to significantly tone down on spending – no more splashes on sponsorships and such other deals as was seen during the bull market.
