Euphoria took hold in February with many smaller less liquid coins printing eye-popping gains. The bellwethers of the space also soared as Bitcoin and Ethereum traded to new ATHs above $57k and $2k, respectively. As these markets have a way of doing, cryptocurrencies experienced a sharp 30% sell-off right as peak excitement took hold in the third week of the month.
They say history doesn’t repeat but it sure does rhyme. In addition to many of the old ICO darlings of 2017 booming, widespread excitement grew over non-fungible tokens (NFTs) as five-pixel digital drawings were selling in the six to seven figure range. This exuberance is painfully analogous to the Cryptokitties craze of 2017.
What this implies about the stage of the current cycle is unclear but one thing that is clear is that on this go around, cryptocurrency investors need to pay attention to the macro-environment more than at any other point in the last decade. Whether Bitcoin and other cryptocurrencies are a cure for or the byproduct of 13 years of loose monetary policy remains to be seen.