Exactly when the “crypto winter” began is a matter of some dispute. Some date it to January 2022, when the price of Bitcoin fell from its peak of $67,566 on 8 November 2021 to $36,800, down 45 per cent. Cointelegraph described it as the worst January since 2018.1 Cointelegraph readers and others may have thought their troubles were over when the price rose again to $47,063 in March 2022, but the rally was followed by further disappointment when the price fell to $18,673 on 19 September.

Some analysts predicted a sell-off in equities and cryptocurrencies in both markets due to the anticipated tightening of monetary policy by the Federal Reserve. Similarly, the IMF argued that a “sharp decline in Bitcoin prices can increase investor risk aversion and lead to a fall in investment in the stock markets”.

The surge in equity and crypto investment during the enforced leisure and uncertainty of the Covid-19 pandemic led many to fall prey to the temptation to get rich quickly, enticed by the endless advertising of Bitcoin and other cryptoassets. Other investors were simply looking for better returns on their savings in a low interest market environment. The price of Bitcoin increased by 300 per cent in the first year of the pandemic.

Many in the crypto world argue that the “crypto winter” simply reflects the cyclical nature of the market downturn in the stock markets, as inflation has increased, interest rates are set to continue to rise and the magnitude of the economic destruction of the lockdowns becomes clearer. But the fall in Bitcoin's price is not part of the downturn in the equity markets, because Bitcoin does not have the same possibility of recovery as the capital markets. Bitcoin's value only depends on passing sentiment. It is not related to anything in the real world. The stock market has crashed or suffered periods of low returns throughout its lengthy history, but its recovery depends on economic growth and the ability of most, but not necessarily all, companies to recover.