Crypto winter and Ethereum tokens
The cryptocurrency market has experienced several cycles of rapid price increases, known as bull runs, followed by the so-called “crypto winter”.
The term crypto winter refers to a phase in the cryptocurrency market characterized by waning investor enthusiasm. This can be seen in the price of crypto assets and the volume of trading in connection with the previous sharp decline. Unlike traditional capital markets, the crypto sector does not have a standardized measure to identify the onset of crypto winter.
Explore the history of CRYPTO
However, a pattern spanning the four-year cycle was observed. This cycle begins with an increase in the price of Bitcoin (BTC) until the block reward is halved. After the reduction, the price decline begins after the crypto assets hit a new all-time high.
The term crypto winter has not been officially defined by any specific regulatory body or organization, but it is characterized by a continuous downward trend in the prices of various cryptocurrencies.
This phase started in January 2018 and lasted until December 2020.
The great disaster of September 2018
During this period, Bitcoin and Ether (ETH), the two leading cryptocurrencies, experienced losses of more than 80% from their all-time highs. Bitcoin peaked at nearly $20,000 in late 2017, while Ether rose above $1,400 in September 2018, before both saw significant price declines.
Among the top 100 listed cryptocurrencies, 95% have recorded significant price declines.
A number of natural industry challenges fueled the 2018 crypto summer. These include the high failure rate of initial coin offerings, in which more than 97% failed to meet their goals, coupled with the issue of individual investors being over-leveraged. Regulatory concerns further complicated the situation, prompting investors to exit the market in droves.
In the year After the crypto crash of 2018, the perception of cryptocurrencies was deeply affected. Financial institutions have viewed the crypto market with skepticism, calling it speculative, while governments around the world are advising caution regarding crypto investments.
This period of inactivity changed in July 2019, when investor enthusiasm began to heat up, pushing the price of Bitcoin above the $10,000 threshold. But this upsurge in the market was short-lived.
In the year In March 2020, the Covid-19 pandemic introduced a significant liquidity crisis in markets worldwide, including the cryptocurrency market.
Explore the history of CRYPTO
The Ethereum PoS journey sees new plans and programs
In the year Despite the significant downturn in 2018, the year also saw key developments for Ethereum. During this time, Ethereum began to lay the groundwork for the transition to a proof-of-stake (PoS) system, despite the delays and planning efforts.
In the year In early 2018, network congestion was created by the popularity of CryptoKitties, a blockchain-based game. This event showed the importance of improving the spread of Ethereum. In response, Ethereum explored the concept of sharding, a process that divides the blockchain into smaller, more manageable chunks known as shard chains or data layers. Each shard operates independently, allowing data to be processed in parallel, greatly increasing the blockchain's scalability.
However, Ethereum's transition to a proof-of-stake (PoS) blockchain has been slower than expected, with several delays along the way.
According to the 2017 roadmap: two significant improvements are planned for Ethereum – Metropolis and Serenity – to improve scalability by introducing proof-of-stake and sharding. The Metropolis update was to be implemented in two phases: Byzantine, which focused on privacy improvements, and Constantinople, which introduced a mixed proof-of-work+PoS system.
However, in June 2018, Ethereum abandoned the hybrid system in favor of a more straightforward PoS system known as Casper 2.0. Although expected in early 2019, this transition is expected to be completed by 2021, indicating the significant and complex nature of upgrading the widely used blockchain platform.
In a significant development during this period, the United States Securities and Exchange Commission (SEC) classified Ether as a non-security in June. This decision made Ether only the second asset to receive such a designation after Bitcoin, sparking discussions and debates in the following years.
2019: The Year of Major Recognition and Defy
In the year In 2019, Ethereum gained a lot of attention due to its technical progress and the expansion of decentralized finance (DeFi) as an ecosystem. During the year, the DeFi sector saw significant growth, with the total value locked in DeFi protocols growing to $667 million as of December 31, 2019.
The sector, which was initially dominated by MakerDAO, held 1.86 million ETH (worth around $260.4 million at the time) and saw an influx of new entrants towards the end of the year.
Decentralized exchanges have also seen significant growth, gaining popularity during the period of popularity of centralized exchanges. Uniswap emerged as a key player, with average daily trading volume increasing from $25,000 to $1.5 million and liquidity increasing from $500,000 to $25 million.
Moreover, Ethereum began to attract attention from various sectors, including major corporations, financial institutions, consumer products, and celebrities.
Basketball player Spencer Dinwiddie has announced the creation of 90 Ethereum-based tokens to virtualize his NBA contract on Ethereum. These tokens allow holders to invest in certain Dinwiddie futures contract earnings and interest. Dinwiddie received an advance of $13.5 million of his $34 million contract in this arrangement.
The Sacramento Kings, a professional basketball team, has launched a rewards program using a token built on Ethereum to boost fan engagement with blockchain technology. In the entertainment industry, the Star Trek franchise announced that it will issue collectible ships as invincible tokens on Ethereum.
Explore the history of CRYPTO
In addition, Samsung introduced an Ethereum-focused developer platform and introduced a new smartphone with an integrated Ethereum wallet.
