Today Elon Musk wrote on Twitter that Bitcoin will make it.
BTC will make it, but might be a long winter
— Elon Musk (@elonmusk) November 14, 2022
However, he also added that the crypto winter will be long.
“Crypto winter” is an even broader term than bear market.
Indeed, the so-called bear market is a market in which prices fall, and continue to fall. Should the descent stop, the bear market will end, even without the start of a new bull run.
In other words, the transition from a downtrend to a lateralizing trend could be enough to end the bear market.
By contrast, the crypto winter is a prolonged period of no growth. So if the bear market ends, but a new bull run is not triggered, the lateralization period would cause the crypto winter to persist as prices are at post-bubble lows.
Elon Musk comforts the crypto community on Twitter
This is precisely what Musk is saying, which is that should the downtrend and bear market end, it is by no means certain that spring will return and trigger a new bull run. Then again, in the past crypto winters have lasted about two of Bitcoin’s four-year cycle length.
Yesterday angel investor Jason Calacanis had written on Twitter that Bitcoin’s current price of about $16,000 is far below last year’s high of $69,000, wondering where it will be a year from now.
He received a response from musician D. A. Wallach saying that Bitcoin is still interesting.
Elon Musk also intervened at that point, saying that Bitcoin will make it, although the crypto winter will be long.
In a later comment, he actually stated that the same thing applies to Dogecoin.
Market reaction to Musk’s words on Twitter
As soon as Musk posted this tweet, the price of Bitcoin jumped from $15,950 to $16,700, then back to $16,350. Later in the day, however, it climbed back up to over $16,700, thanks in part to good news coming from Crypto.com, which is holding up to the shock of the explosion of withdrawal requests.
Thus once again Musk’s words have managed to affect the crypto markets, though not by much this time.
It is worth noting that something similar also happened to the price of Dogecoin, which went from $0.082 to $0.086. Later in the day, the price of DOGE then also rose to $0.88.
However, the difference is that while Bitcoin’s current price is 75% lower than last year’s all-time high, Dogecoin’s price is 88% lower. Therefore in theory Dogecoin should have more growth potential, but its price has already risen a lot in the past few weeks again thanks to Musk. In fact, it is 51% higher than a month ago, when it had been even below $0.06.
In October, Musk also made a prediction about how long the recession would last.
He said he believed it could last until spring 2024, which is probably not coincidentally the same date as roughly the next halving of Bitcoin.
Just guessing, but probably until spring of ‘24
— Elon Musk (@elonmusk) October 21, 2022
He said this in response to a question directed at Dogecoin creator Shibetoshi Nakamoto, from the Tesla Owners Silicon Valley profile.
Shibetoshi (not to be confused with Satoshi Nakamoto, creator of Bitcoin) said that the pandemic now seems to be behind us, but that global recession and fears of a nuclear apocalypse remain. Musk had commented a first time saying that it would be nice to go a year without some other horrific global event.
Previous crypto winters
After the first very large speculative bubble in 2013, the price of Bitcoin went through a long crypto winter that ended only in early 2017. It lasted more than three years.
The second crypto winter began in January 2018, after the second big speculative bubble, and lasted until late 2020, or almost three years.
At this point, it is to be expected that the current crypto winter could also last for two or three years, and perhaps end after Bitcoin’s next halving in the spring of 2024.