Crypto’s hot streak cools down as harsh ‘winter’ descends

The wealth-generating hot streak for Bitcoin and other cryptocurrencies has turned brutally cold. As prices plunge, companies collapse, and skepticism soars, fortunes and jobs are disappearing overnight, and investors’ feverish speculation has been replaced by icy calculation, in what industry leaders are referring to as a “crypto winter.” It’s a dizzying turn of events for investments and companies that at the start of 2022 seemed to be at their financial and cultural apex. “They did similar things leading up to the 2008 crisis: aggressively market these products, promise returns that were unreasonable, ignore the risks, and would dismiss any critics as folk who just didn’t get it.” Hays and others are also drawing comparisons to the 2008 housing-market meltdown, because the collapse in Bitcoin and other digital coins has coincided with crypto industry versions of bank runs and a lack of regulatory oversight that is stirring fears about just how bad the damage could get. In the world of crypto, bouts of heavy selling prompt references to the HBO series “Game of Thrones,” which popularized the ominous warning: “winter is coming.” Last week, the CEO and co-founder of Coinbase, one of the largest crypto exchanges, announced that the company would be laying off roughly 18% of its employees, and he said a wider recession could make the industry’s troubles even worse. Jake Greenbaum, a 31-year-old known as Crypto King on Twitter, said he has recently lost at least $1 million on his crypto investments — “a nice chunk of my portfolio.” While he believes things could get worse before they get better, he is not throwing in the towel.