The Cryptocurrency’s Cold Start Is About to Warm Up

Newcomers who bought at the top of the market will undoubtedly sell, but more sophisticated investors may want to buy the dip.

Spring is on the way for Web 3.0 after a long, cold winter in crypto. Niall Ferguson is an Irishman.

The economy first overheats, and then Wall Street experiences winter. January was especially bad for the forward-thinking investor, and February could be even worse. According to the New York Stock Exchange’s FANG+ index, big tech stocks were down nearly 8% at the end of last month and that was before Meta Platforms Inc. shares fell off a cliff last week.

The crypto winter has been even colder than usual. Bitcoin has dropped 12.5 percent since the beginning of the year, and it is down 40 percent from its all-time high of $67,734 in November 2021. If you purchased Ethereum at the peak, you are now down 38.5 percent. Only meme stocks like GameStop Corp. and Robinhood Markets Inc. have taken such a beating. Oh, and don’t forget Facebook, which has dropped 34% in the last six months.

Retro investors, on the other hand, have had a fantastic start to the year. Brent crude oil rose more than Bitcoin fell in January. Long coal was one of the trades of 2021: if you bought Peabody Energy Corp., America’s largest coal company, a year ago, you’d be up 252 percent. That’s the end of COP26 and the Green New Deal. Long the past, short the future appears to be the winning trade of the post-pandemic era. But, using financial history as a guide, I believe this crypto winter will end soon.

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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