However, he added that small improvements may start to emerge in August of next year. “Cryptocurrencies are not for the faint of heart,” she said.

Cryptocurrency prices have been stagnant since the collapse of stablecoin terraUSD and its associated cryptocurrency Luna triggered a broader market crash earlier this year.

They took a further hit after data showed US inflation rose faster than expected in September, dashing hopes that the Federal Reserve will slow down its planned rate hikes.

Bitcoin fell more than 4% on October 13 to below $18,400, nearing its yearly low and representing a 61% drop year-to-date. The world’s largest cryptocurrency by market cap has hovered between $19,000 and $20,000 since early September.

Analysts say crypto stocks, which have become more correlated with the broader stock market this year, are unlikely to break free of their current range until the Federal Reserve starts cutting rates.

‘Trial’ period for crypto companies

The sector has already seen a number of companies file for bankruptcy or insolvency in recent months, partly as a result of falling valuations, including lender Celsius, broker Voyager Digital and hedge fund Three Arrows Capital.

Some worry that the wave is not over yet. This month, South Korean crypto investment firm Blockwater defaulted on a $3.4 million loan to TrueFi, a lender.

Marcus Sotiriou, an analyst at GlobalBlock, said it is “another example of chaos caused by centralized entities taking on too much leverage and risk.”

A boss told him FN was aware of several more large loans coming due in the last quarter, which could be a watershed moment for major players in the market.

Serhii Zhdanov, CEO of cryptocurrency exchange Exmo, said that “there is no sign of a turning point in the near future. Growth seems unlikely for the crypto market in the last quarter.”

He added: “In general, this crypto winter is a testing period. Uncertainties test the stability of all market players and identify the weaknesses of the sector”.

Amid the turmoil, traditional financial players have moved into the digital asset market.

The most notable is BlackRock, which announced a partnership with Coinbase in early 2022 and launched a private bitcoin trust for institutional investors.

Adrien Treccani, CEO of Metaco, a crypto custodian that has partnerships with Citigroup, Société Générale and BNP Paribas, said the bear market is “completely irrelevant” to institutions.

“They may even be happy, because they consider it to be one more opportunity to catch up and position themselves as the saviors of the markets.”

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