There’s a cold front in the metaverse. Stoked by investor fears of rising interest rates and dried up liquidity, the price of cryptocurrencies plummeted this week, with the market shedding a trillion dollars from bitcoin’s all-time high in November. The swoon is giving crypto diehards flashbacks to 2018. That was the last time the industry entered a “crypto winter,” informally defined as a sharp decline in cryptocurrency prices, followed by a prolonged decrease in trading.
This time around, many crypto watchers see a short-term market correction—not a harbinger of a yearslong freefall. But even so, it may be time to zip up those parkas and hope that a spring awakening awaits on the other side. The good news? “NFTs were born out of a crypto winter,” said OhhShiny, an influencer and investor in non-fungible tokens. “Dapper Labs came from that, Axie Infinity came from that.” In other words, a sustained downturn could be a blessing in disguise for the crypto ecosystem—a time for more innovation and less Grimacecoin.