Just a couple of hours ago, major indexes Bitcoin, Ethereum, and SLP (Axie’s P2E coin) went green for the day. Several other coins have also registered upticks as well.
With these recent upward movements, a question comes to mind: Is this winter cycle about to end?
With the horror stories that Axie Infinity, Luna, and other major P2E/NFT gaming titles have experienced in the first half of 2022, as well as the major real-life events and development both inside and outside the cryptocurrency and P2E gaming sector that caused both markets and people’s appetite for titles in the space to crash down in steep dives, it’s pretty clear that the sector is deep within winter season.
Binance’s CZ has mentioned in an interview with Fortune that the crypto winter would last until 2026. However, he also mentioned that it’s a great time to hire new talent, acquire new products, and get ready for the next boom overall. The CEO of the global centralized exchange has also mentioned that projects who could survive this current turn of events would come out bigger, stronger, and better. For his part, Elon Musk has also mentioned that he would keep engaging with the cryptocurrency sector in the foreseeable future.
These major developments have given some level of confidence to both retail and institutional investors in the crypto market, but then again, everything is extremely volatile at the moment.
To put it bluntly, these gains have to be continued in a steady upward trajectory over a period of time. Otherwise, it might be considered as nothing but a “dead hype bounce” or a “dead cat bounce”.
As per Investopedia, “the commonly accepted definition of a bull market is when stock prices rise by 20% after two declines of 20% each.” That’s a huge number to go by, considering the “pumps” have been proportionally small at the moment. Also, it should be considered that even though there are positive gains, the net result over time is still hugely negative.
This means that the majority of the P2E crowd won’t be able to reach their ROI targets or bring home their prospective earnings anytime soon. After all, the market does not really consider – there’s a reason why a lot of P2E game developers have repeatedly warned their players to “sell now while the iron is still glowing hot” back when their respective tokens were at their all-time highs (ATH).
As far as P2E companies are concerned, many of them are currently focused on building their respective games for the moment – as well as gaining and investing in assets and people that would help them in the long run. After all, the best time to build is when costs and market expectations are low.
While positive signs of life do appear here and there, they aren’t enough to bring the sector back to how it looked like just a year ago or so. Still, these “vital signs” are encouraging, for they remind everyone in the P2E gaming space that the end of the tunnel is somewhere down the line (and the future is not bleak at all).
What do you think about this “crypto winter” cycle? Is it going to end soon and lead us to the bright futures that we all envision? Or are we in for more horror stories in the P2E and NFT gaming space in the months and years to come?