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Anyone who has been keeping tabs on the latest Bitcoin news over the past few months will have witnessed the digital currency’s dramatic fall from grace, either with interest or trepidation.
In just a few months, Bitcoin’s value plummeted from a record high in November 2021 to an all-time low the following June, when it fell below its ‘floor’ of $20,000.
This drastic drop in value was not limited to Bitcoin, however, and formed what is known in digital currency parlance as a ‘crypto winter’ – or, less evocatively, as a ‘bear market’. There have been several crypto winters ever since Bitcoin was first launched over a decade ago, but this one seems to be the most severe to date and has caused concern for anyone with even a passing interest in cryptocurrency.
Climbing back to the top
While everyone from financial analysts and investors to high-ranking US officials has been warning against investing too much in digital currency, there are others who still firmly believe that crypto is the future and that spring is on the way.
Recent events seem to bear out this optimism. For example, El Salvador took the revolutionary step of making Bitcoin legal tender in 2021. More companies and brands are allowing the use of digital currency to pay for items. Some US states are preparing to embrace cryptocurrency in a significant way, including Texas and Virginia.
And, despite plummeting so dramatically, Bitcoin has managed to ricochet back up in value again, gaining 27% over the course of just one month.
However, the original cryptocurrency still remains ensconced in ‘bear’ territory, and other cryptocurrencies have had their own problems to face. Ethereum has declined in value as sharply as Bitcoin, and several crypto scandals have made headlines in recent months, such as the collapse of TerraUSD and Luna tokens, which saw investors lose billions of dollars.
Will winter thaw for Bitcoin?
Despite the significant problems that have been faced by Bitcoin and other cryptocurrencies ever since Bitcoin’s inception, experts remain cautiously optimistic about the future.
While individual cryptocurrencies may rise and fall, with the world of decentralised finance becoming increasingly more developed and complex – not to mention more widely adopted – it seems unlikely that digital currency will altogether fail in its promise. New blockchain developments, and a new legislative framework, will continue to be unveiled and will undoubtedly create a more robust structure around the mining and usage of crypto.
Experts have also pointed out that the market has its cycles, and that increase will inevitably follow a decline. It seems likely that, unless Bitcoin’s worth collapses entirely, the increasing prevalence of its usage – not least in El Salvador – will mean that the flagship digital currency is kept in use.
Is Bitcoin still worth a shot?
While the future of Bitcoin is impossible to predict with any certainty – and an outright ‘death’ is certainly not off the cards – it still remains a viable investment option. However, financial advisors recommend that anyone who would still like to invest in Bitcoin does so with extreme caution, making it only 5% of their investment portfolio, or even less – at least while the current crypto winter remains in full swing.
