[News Terms] Rising Cryptocurrency Prices... Will the 'Crypto Winter' End?

The price of Bitcoin (BTC) has been rising, surpassing 50 million won for the first time since last May. Ethereum (ETH) has also increased by nearly 10% in a week, and Solana has surged by as much as 30%, raising expectations that the 'crypto winter' is coming to an end.

Crypto winter refers to a phenomenon where the price of crypto assets sharply declines and capital continues to flow out of the market. Beyond a simple downturn, it is likened to 'winter' due to prolonged bearish conditions accompanied by low trading volumes. The term first appeared in June 2011 when Mt. Gox, the world's only crypto exchange at the time, was hacked, resulting in the theft of approximately $473 million worth of Bitcoin. The Bitcoin price, which was above $20 at the time, plummeted to around $2, marking the beginning of the cryptocurrency market's winter.

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The cryptocurrency market, which experienced a massive boom in 2017, fell into another crypto winter in 2018 as the bubble burst. The market capitalization of cryptocurrencies evaporated by more than 80% over about a year, leading to severe stagnation. In 2021, China cracked down strongly on cryptocurrency mining and banned financial institutions from engaging in related transactions, while various countries imposed regulations on cryptocurrencies, causing the prices of Bitcoin and most altcoins to plunge.

In 2022, the major coin Luna, which was priced at around 100,000 won per coin, crashed to less than 1 won per coin within a week, delivering a significant shock to the market. This was followed by a series of negative events, including the U.S. Federal Reserve's consecutive big-step interest rate hikes and the failure to list a Bitcoin spot ETF, resulting in a persistent bearish market. Hedge funds and lending companies related to cryptocurrency investments went bankrupt one after another, and global crypto exchanges began cutting staff, worsening the situation.

Until the first quarter of this year, the cryptocurrency market was still facing cold winds, but it began to show signs of recovery in the second quarter, with Bitcoin briefly surpassing 50 million won this month, approaching pre-Luna crisis levels. This is due to news that the U.S. Securities and Exchange Commission (SEC) has started discussions with Grayscale to launch a Bitcoin spot ETF. If Bitcoin becomes the underlying asset of an ETF, it will open the door to buying and selling Bitcoin through existing financial services like listed stocks. This signals the beginning of Bitcoin's mainstream adoption. In this case, investor inflow into the cryptocurrency market is expected to increase significantly, which is anticipated to be positive news for other altcoins as well.

This content was produced with the assistance of AI translation services.