is the crypto winter long or coming to an end?

The crypto market is going through wild changes, and the record pullback of key coins over the past five months has people nervous. However, the current decline is a natural and, in my opinion, temporal event. Vitalik Buterin proclaimed the beginning of the crypto winter in February 2022. In his interview for Bloomberg, he said that the stagnation period would help to concentrate on the development of the technology, and only the projects aimed at a long-term result would stay afloat.

Since November 2021, Bitcoin and Ethereum have fallen by 70%, followed by others: the price of Binance Coin (BNB) by 57%, Ripple (XRP) by 60% and Cardano (ADA) by 65%.

The turmoil in the crypto market was not limited by the decline of key coins. Singapore’s cryptocurrency hedge fund Three Arrows Capital has collapsed. Babel Finance and CoinFLEX have frozen withdrawals. Voyager Digital crypto broker, Zipmex crypto exchange and Celsius, a cryptocurrency lending platform, have declared bankruptcy. Many may think that the crypto world is collapsing.

Resource: Usefultulips.org

I believe that we should follow the course of main coins, look for tokens with potential for growth and new prominent regions for crypto trading. North America, Asia, Africa and Latin America are leaders in overall bitcoin trade. These are optimistic regions for the development of crypto trading in the long term.

The volume of cryptocurrency trading has increased in the United States, India and Kenya. Nigeria has become the largest crypto market on the African continent: the volume of P2P trading has reached $1.5 billion (there is a ban on trading in cryptocurrency for banks and financial institutions). Bitcoin has been confirmed as a means of payment in the Central African Republic. In July,
a public sale
of Sango Coin, a national digital currency, was opened here.

Bitcoin is incredibly popular in countries with crisis economies – Argentina and Venezuela – where many use crypto as an asset to protect against inflation. If Europe and the US were in panic when faced with the drawdown, the Latin American countries are used to volatility and defaults. Owners of digital assets in this region lose less than when investing in local money. The regulation of a crypto market in Latin America is different for each country: if in Columbia and Peru there is no legislation on virtual currencies, in Salvador, Bitcoin is a legal means of payment.

In Asia, everything is aimed at increasing the degree of investor confidence in digital assets. Bitget, Singapore’s cryptocurrency derivatives exchange, has announced the launch of a fund aimed at preventing hacking and theft of cryptocurrencies. Cambodia joins the list of countries with the rules to regulate cryptocurrencies (Thailand, Malaysia, Philippines and Singapore). SERC, together with Binance crypto exchange, has signed a Memorandum of Understanding for the development of rules for cryptocurrency.

As Asia becomes more crypto-friendly, the Bank of England stated that legal and regulatory frameworks and law enforcement need to be tightened, as the integration of cryptocurrency into the financial system has its risks. In the UK, crypto assets can be used as a medium of exchange, while in Japan, Australia, Bermudas, Singapore, Hong Kong, Salvador, USA, Malta, Germany, Spain, Italy, Canada, Norway, Ukraine, Czech Republic, Slovenia, Lithuania, Estonia, Gibraltar, Switzerland , Netherlands, Georgia cryptocurrencies are recognized as means of payment.

In July 2022, EU nations and the European Parliament adopted the draft law on the cryptocurrency market, in which the rules for all participants in the crypto field were laid down: transparency, user security, liability to investors, insurance of digital assets produced and traded, mandatory authorization from the EU for providers of crypto services.

In spring and June, major cryptocurrency holders sold Bitcoin, but in July we can observe other tendencies that can be traced by the biggest savings of BTC (BitInfoCharts statistics). In the second half of July, the biggest Ethereum whales started investing in ETH, USDC, USDT, BUSD and other digital currencies.

The market is cyclical: growth is followed by decline, therefore the decline is temporal. The crypto sector is affected by too many factors, including geopolitical ones. From my perspective, it will recover, but not be shaken once. Yes, many are counting on losses, but we should develop with an eye toward prominent peaceful regions with crypto-friendly legislation. I advise all participants in the crypto market to go to regions that are not troubled by political conditions and everything is calm. Crypto exchanges and other companies in the crypto field should think about Asia, Africa and Latin America. The crypto winter is not over yet, but the signs of stabilization are already visible: follow positive dynamics and small strengthening of the crypto market instead of drawdown.