Crypto winter and Ethereum landmarks


The cryptocurrency market has experienced several cycles characterized by periods of rapid price increases known as bull runs, followed by extended downturns referred to as “crypto winters.”

The term crypto winter refers to a phase within the cryptocurrency market characterized by a downturn in investor enthusiasm. This is evident through significant declines in crypto asset prices and trading volumes from their previous highs. Distinct from traditional capital markets, the cryptocurrency sector lacks standardized metrics to identify the onset of a crypto winter.


Nevertheless, a pattern has been observed that tends to span a four-year cycle. This cycle starts with an increase in the price of Bitcoin (BTC), leading up to the block reward halving. After the halving, a price downturn typically begins after crypto assets achieve new all-time highs.

The term crypto winter is not officially declared by any specific regulatory body or organization but is recognized by a consistent trend of declining prices across various cryptocurrencies.

This phase began in January 2018 and extended through December 2020.

The Great Crash of September 2018

During this period, Bitcoin and Ether (ETH), the two leading cryptocurrencies, experienced a loss of over 80% in value from their all-time highs. Bitcoin had previously reached a peak of nearly $20,000 toward the end of 2017, while Ether had ascended to over $1,400 before both saw a sharp decrease in value by September 2018.

Among the top 100 listed cryptocurrencies, 95% recorded a substantial drop in value.

Multiple inherent industry challenges triggered the crypto winter of 2018. These included the notably high failure rate of initial coin offerings, where over 97% did not meet their objectives, coupled with the issue of individual investors being overly leveraged. Regulatory concerns further complicated the situation, leading to a significant withdrawal of investors from the market.

The aftermath of the 2018 crypto crash profoundly affected the perception of cryptocurrencies. Financial institutions began to view the crypto market skeptically, labeling it as potentially speculative, while governments worldwide advised caution regarding crypto investments.

This period of inactivity shifted in July 2019, when investor enthusiasm began to warm up, propelling the price of Bitcoin beyond the $10,000 threshold. This revival in the market’s fortunes, however, was short-lived.

In March 2020, the outbreak of the COVID-19 pandemic introduced a significant liquidity crisis that impacted markets globally, including the cryptocurrency market.


The Ethereum PoS journey sees new plans and reschedules

Despite the significant downturn in 2018, the year also witnessed pivotal developments for Ethereum. During this period, Ethereum began laying the groundwork for its transition to a proof-of-stake (PoS) system despite facing delays and rescheduling efforts.

Early in 2018, network congestion was caused by the popularity of CryptoKitties, a blockchain-based game. This event highlighted the need for Ethereum to improve its scalability. In response, Ethereum explored the concept of sharding, a process that divides the blockchain into several smaller, more manageable segments known as shard chains or data layers. Each shard operates independently, allowing for parallel processing of information, which can significantly enhance the blockchain’s scalability.

However, Ethereum’s transition to a proof-of-stake (PoS) blockchain was slower than anticipated, with multiple delays along the way.

According to its 2017 roadmap, two significant upgrades were planned from Ethereum — Metropolis and Serenity — to improve scalability by introducing proof-of-stake and sharding. The Metropolis upgrade was to be implemented in two phases: Byzantine, which focused on privacy improvements, and Constantinople, which would introduce a hybrid proof-of-work+PoS system.

Nonetheless, by June 2018, Ethereum abandoned the hybrid approach in favor of a more straightforward PoS system known as Casper 2.0. Although initially expected in 2019, this transition was completed in 2021, illustrating the complexities involved in upgrading such a significant and widely-used blockchain platform.

In a notable development during this period, the United States Securities and Exchange Commission (SEC) classified Ether as a non-security in June. This decision made Ether only the second asset, after Bitcoin, to receive such a designation, sparking discussions and debates in subsequent years.

2019: The year of mainstream recognition and DeFi

In 2019, Ethereum gained significant attention due to its technical progress and decentralized finance (DeFi) expansion as an ecosystem. Over the course of the year, the DeFi sector experienced considerable growth, with the total value locked in DeFi protocols increasing to $667 million by Dec. 31, 2019.

DeFi TVL chart 2019. Source: Medium

Initially dominated by MakerDAO, which held 1.86 million ETH (approximately $260.4 million in value at the time), the sector saw an influx of new participants by year’s end.

Decentralized Exchanges also experienced significant growth, gaining traction amid the prevailing popularity of centralized exchanges. Uniswap emerged as a key player, with its average daily trading volume increasing from $25,000 to $1.5 million and its liquidity expanding from $500,000 to $25 million.

Moreover, Ethereum began to attract attention from various sectors, including major corporations, financial institutions, consumer brands and celebrities.

Basketball player Spencer Dinwiddie announced a initiative to tokenize his NBA contract on Ethereum, creating 90 Ethereum-based tokens. These tokens allowed holders to invest in a portion of Dinwiddie’s futures contract earnings plus interest. Dinwiddie received $13.5 million upfront from his $34 million contract through this arrangement.

The Sacramento Kings, a professional basketball team, launched a rewards program using a token built on Ethereum to enhance fan engagement through blockchain technology. In the entertainment industry, the Star Trek franchise announced it would issue a series of collectible ships as nonfungible tokens on Ethereum, leveraging the platform for digital collectibles.


Additionally, Samsung introduced a developer platform focused on Ethereum and announced a new smartphone with an integrated Ethereum wallet.