Waiting for the “coldest” crypto winter in history

The cryptocurrency market is going through another difficult period, but some analysts believe that what is happening today differs from all previous downturns. Hosts of Bloomberg’s popular Odd Lots podcast Joe Weisenthal and Tracy Alloway argue that the digital asset industry is facing not just a price correction, but a much deeper problem – a crisis of trust and identity.

According to experts, the current situation could go down in history as the harshest crypto winter ever. And this is not about the scale of price declines. In its history, Bitcoin has repeatedly lost 70-80% of its value, and many altcoins have practically disappeared from the market. However, today, for the first time, several fundamental ideas that shaped the investment appeal of cryptocurrencies for years are being questioned at once.

One of the main disappointments has been the collapse of the narrative of Bitcoin as a safe-haven asset. For many years, supporters of the first cryptocurrency called it “digital gold” and a hedge against inflation. It was assumed that in conditions of weakening national currencies and expanding money supply, investors would massively shift capital into Bitcoin.

However, recent years have shown a different picture. Amid rising inflation, geopolitical conflicts, and a weakening dollar, investors preferred traditional gold. The precious metal set a series of historical records and for the first time ever surpassed US government bonds in the share of global central bank reserves. Bitcoin, meanwhile, failed to demonstrate similar resilience and continued to behave more like a high-risk technology asset.

An equally serious challenge for the crypto industry has been the rapid expansion of artificial intelligence. Just a few years ago, cryptocurrencies were considered the main technological trend of the future. Today, however, the attention of investors, engineers, venture funds, and large corporations has almost completely shifted to AI.

Billions of dollars that could previously flow into blockchain projects are now being invested in language models, computing infrastructure, and data centers. The largest technology companies are engaged in a real arms race in artificial intelligence, and the release of new models such as Claude 4.6 from Anthropic or GPT-5.3 from OpenAI regularly becomes a top technology news story.

Against this backdrop, the cryptocurrency industry has for the first time in a long while stopped being perceived as a center of innovation. Moreover, competition has even reached the infrastructure level. Mining companies increasingly face situations where AI data centers are willing to pay more for electricity and computing power. As a result, miners are forced to compete for energy resources with one of the fastest-growing sectors of the global economy.

Paradoxically, additional pressure on the market has come from the long-awaited institutionalization of cryptocurrencies. For many years, supporters of digital assets dreamed of spot ETF launches, the entry of major banks, and recognition from the traditional financial system. When this finally happened, the effect turned out to be mixed.

On the one hand, cryptocurrencies became part of the global investment market. On the other hand, one of the key arguments of the industry disappeared – that the market is still in an early stage of development and exponential growth lies ahead. After ETF launches, Bitcoin became just another asset class competing for capital with stocks, bonds, gold, and commodities.

Meanwhile, Wall Street’s interest is gradually shifting to other areas. If a few years ago banks actively explored crypto trading, today much more attention is being paid to stablecoins, digital payments, asset tokenization, and infrastructure solutions. For many institutional players, blockchain technology has become more interesting than cryptocurrencies themselves.

Long-term technological risks also add to concerns. Experts increasingly discuss the prospects of quantum computing. Although the practical threat to cryptographic algorithms remains mostly theoretical for now, the very emergence of such discussions forces the market to think about the future security of digital assets.

Another factor of uncertainty is large corporate Bitcoin holders. In recent years, significant volumes of cryptocurrency have been accumulated by public companies, investment funds, and specialized organizations. As long as these entities hold their assets, the market receives support. However, potential sales from such players could create significant price pressure.

Bloomberg analysts see the most worrying signal in what they call a crisis of identity in the crypto industry. In previous cycles, the market always had a clear growth narrative. First it was alternative money, then decentralized finance, later NFTs, metaverse, and Web3. Today, however, no new large-scale narrative has yet emerged.

Even the success of individual projects does not change the overall picture. Despite infrastructure development, new blockchain launches, and continued crypto adoption, the market is experiencing a shortage of ideas capable of once again attracting mass investor attention.

At the same time, prices remain relatively high by historical standards. Bitcoin trades around $66,975, Ethereum is around $1,874, and Solana is around $74.97. A few years ago, such levels would have been seen as a major success for the industry.

However, according to Bloomberg analysts, the problem lies not in absolute prices, but in market sentiment. Previous crypto winters were accompanied by expectations of a new growth cycle and belief in the future of the industry. Today, many investors are instead asking what role cryptocurrencies will play in a world where artificial intelligence is becoming the main technological driver of the decade.

Nevertheless, the history of digital assets has repeatedly shown the market’s ability to surprise skeptics. Bitcoin has often gone through periods in which it was declared “dead,” only to return to new all-time highs. Therefore, it is clearly premature to speak about the end of the crypto era.

Rather, this is an important stage of industry maturation. Cryptocurrencies will have to prove that they can remain relevant not only as a speculative asset, but also as a full-fledged part of the global financial system. And the answer to this question will determine whether the current crypto winter becomes a temporary pause before new growth or the beginning of a fundamentally new stage of industry development. By the way, Bitcoin fell below $65,000, losing almost 5% in a day. At one point, the coin dropped to $61,000. Meanwhile, Ethereum is trading around $1,800. Over the past 24 hours, liquidation volume reached $1.61 billion. The crypto market crash is taking place amid another exchange of strikes between the US and Iran.