It’s Been a Long, Hard Crypto Winter–But There Are Signs That Spring Is Coming

Every time you think the crypto winter might be thawing, there’s a sudden drop in price. The US government shutdown is affecting more than just traditional industries. Even the SEC is paralyzed from taking further action–and that always has knock-on effects on the crypto market. But take heart, the bear market is grueling, but there are signs that spring is coming.

2018 – The Year of the Crypto Winter

If 2017 was the year of ICOs, adrenaline, and excitement, 2018 was like being woken up by an ice-cold shower. Suddenly crypto wasn’t so fun anymore. The prices started crashing. Scary stats came out saying that over 80 percent of ICOs ended up being scams. And cybercriminals stole more than $1 billion of cryptocurrency in various hacks over the year.

Digitex started building our exchange at a time when interest in crypto was at an all-time high. One year after our ICO, market sentiment has changed significantly and public interest in crypto has unsurprisingly dwindled.

Analysts far and wide are in general agreement that the bearish trend isn’t going away without a fight. Some are even calling for a Bitcoin floor of $1,500.

Quoted in CNBC, Zennon Kapron, a fintech consultant at Kapronasia said:

“The market is in a general bearish trend that doesn’t seem to be letting up driven by what seems to be a general negative sentiment towards crypto.”

The annual SFOX Volatility report also places crypto at ‘moderately bearish’ as we enter 2019. And with Bitcoin hovering between $3,500-4,000 and still wildly susceptible to major drops and rallies, the crypto winter has been harsh without a doubt.

SFOX Volatility

Source: SFOX Volatility Report

December 2018 was the worst performing month of the year with CoinMarketCap showing Bitcoin price as low as $3,456. That’s an annual drop of over 80 percent!


Bitcoin one month Dec 18-Jan 18

Ethereum also saw over 90 percent shaved off its value over the year. Although it started January all guns blazing, the price has tumbled back down again.
In these relentless, unforgiving conditions, DGTX not only held its own but even achieved record highs.


Ethereum one year chart

The bear market is hard, but we’re confident in demand for our commission-free exchange. And we also see plenty of positive signs for the industry on the horizon.

What Caused the Market to Crash?

The bear market was brought about by so many different factors that it’s hard to pinpoint a single one. SFOX measures three main indexes when it comes to the market: market sentiment, volatility, and continued advancement of the sector.

Looking back at 2018, various pressures from regulators and governments hostile against cryptocurrency definitely took their toll.

There were also blows such as the Facebook and Google ICO ad bans, major hacks like Bithumb and Coinrail, a slowdown in the Asian market, delayed ETFs, and the Bitcoin Cash hard fork.

Just last month, the SEC issued an update postponing the approval of a proposal from the VanEck SolidX Bitcoin Trust to come up with a Bitcoin exchange-traded fund (ETF).

In its report, it mentioned that it would delay its decision to approve the proposal until February 27. With the US government shutdown, that’s likely to get pushed back even further.
The last time the SEC postponed VanEck SolidX Bitcoin Trust’s proposal for a Bitcoin ETF, the overall price of Bitcoin crashed instantly loosing over $9 billion of its value.

Signs that Spring Is on Its Way

This will be the third time the VanEck SolidX Bitcoin Trust attempts to push for a Bitcoin ETF. Their aim is to bring in more institutional investment into the crypto market so as to help stabilize and legitimize the market. Experts believe that the price of Bitcoin will skyrocket once the SEC approves the proposal–and that it’s now a matter of when and not if.

Moreover, as Bloomberg notes, the crypto winter hasn’t been bad news for all. While traders are anxious about the price of cryptos, key infrastructure is being built. Konstantin Richter, CEO of Blockdaemon, said:

“This is the most productive phase we’ve ever been in.”

Plasma Protocol is forging ahead to provide Ethereum with its scaling solution. Its side-chains are already processing transactions at 25,000 transactions per second–some 1,500x faster than the main Ethereum blockchain.

The Lightning Network went from a handful of nodes at the beginning of the year to over 11,000 nodes transacting over $2 million.

lightning network nodes

Lightning Network Nodes

And blockchain companies that have weathered the storm were busy building their products. 2019 will be a great year for continued development of the sector, whether prices rise dramatically or not.

We’re seeing legislation finally start to take shape and form. And Wall Street investment is soon to flood into the market in the form of Bakkt and Nasdaq. Even though Bakkt is still awaiting regulatory approval, they’ve already announced their first acquisition. Their confidence in the longevity of the market cannot be denied.

Bakkt CEO Kelly Loeffler wrote in a Medium post that 2018 brought about more innovation than any other year:

“Notably, 2018 was the most active year for crypto in its brief ten-year history.”

Walmart, IBM, Facebook, and other large companies are also actively using blockchain technology and many impressive blockchain projects will be launching this year.
The Digitex Futures public launch is on track for quarter two. Commission-free trading will reawaken interest from many disillusioned traders. And if the bear market does endure a little longer, they can even short Bitcoin on our exchange and make money from small daily fluctuations in price.

Final Thoughts

While we all prefer it when prices are high, there’s still a ton of positive news coming out of the crypto space. The change we want may not happen overnight, but there are signs that spring is on its way and Digitex is confident that 2019 will be a key year for the industry.