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Bitcoin Winter Threatens to Become an Ice Age

Many influencers within the digital asset world use the term 'crypto winter' as a way to explain the dramatic cyclical falls of value when cryptocurrencies prices crumble. The sun it is psychologically suggested, will shine again during summer, prices always heat up says the mantra.

However, the prices of the largest cryptocurrencies are suffering extensive erosion during this 'winter' storm. Although it may sound like a joke, a fear of a cryptocurrency ice age seems plausible. If values freeze too dramatically in the cryptocurrency world, will prices be able to thaw again?

Concerns regarding the 'evangelists' like mantras of Bitcoin backers such as Michael Saylor, the CEO of MicroStrategy, are noteworthy. Perhaps Michael Saylor will be warmed by 'summer' prices again and see Bitcoin emerge higher, but many of his 'followers' are likely to get hurt if prices do not rebound soon. Clever quotes like Bitcoin is better than fiat currency. Bitcoin is scarce. Bitcoin can be taken anywhere in times of crisis, are all frequently heard. But these quips become rather shallow sounding and questionable, during these massive selloffs which can destroy an average person's speculative pursuits if they have over leveraged on their wagers.

Some backers will certainly say people should not be speculating on Bitcoin, they should buy and hold. However its does appear any buying of Bitcoin is speculative. Anyone who decides to purchase Bitcoin should be willing to lose all of their money. Its history as a volatile speculative asset underscores this fact.

Influencers and backers will claim they are not responsible, and in many cases they are not, but fingers will be pointed and blame will be cast and evidence will be gathered. Class action lawsuits will certainly spring forth as people who lost money look for folks and companies to accuse of wrongs. Responsibility will likely have to be proven in a court of law. Lawyers are certain to make money from their work, they may be the only ones who are guaranteed financial success from Bitcoin.

The average costs of purchased Bitcoin is said to be around 23,500.00 USD within the current total supply of 19 million plus existing coins. The problem for BTC/USD is that it is below this average purchase price as of this morning by a rather steep margin as it trades near 18,400.00 per digital asset. Meaning many folks who bought Bitcoin now have a substantial loss. Yes, the buyers who paid too much can become 'HODLers', but will they really be able to maintain this stance?

Another noteworthy number, it should also be remembered that it is estimated around 3 million Bitcoins have been 'lost' permanently via the misplacing of cold wallet information, and the forgetting of passwords that are needed to access coins in hot wallets.

Consideration must be given to the costs of producing one BTC, which supposedly is around 26,000.00 USD currently. If the price of Bitcoin continues to struggle, at what point do miners say it no longer makes viable economic sense? The price of mining a Bitcoin is not about to get cheaper in this high inflation period as energy costs grow.

When does a real capitulation take place? Why is Bitcoin being so violent during the weekends? Why does some of the greatest volatility apparently occur on Saturdays and Sundays?

Now that the 19,000.00 price level has proven vulnerable, which is the next technical level BTC/USD could challenge? Price velocity is lightning fast. Many seasoned traders could historically say this shows that fear has taken hold in the marketplace, and that may be true. But typically the fear eventually runs into an intrinsic value for the asset which creates a pause. Traders seeking value can jump in and take advantage of the low prices and wait for summer to shine. However, Bitcoin has very little intrinsic value that can be quantified. So where is the price investors jump in?

Will the price of Bitcoin fall to 13,000.00 during this so-called winter? Could it become even worse? Who is going to jump in and buy Bitcoin if it continues to stumble and its price is as cold as ice?


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