With Crypto Market In Free Fall, Is There A Safe Haven?

What may now seem like a lifetime ago, near the end of 2021, the cryptocurrency market was still on fire. 

Bitcoin BTC/USD, Ethereum ETH/USD, and other altcoins were setting all-time highs. BTC was nearing $70,000, more than doubling in value in a span of four months. The euphoria had set in and predictions of $100,000 BTC abounded.

Now it looks like the crypto market is on fire again. This time, however, the term is meant a bit more literally. Bitcoin is now sitting just south of $23,000, down almost 30% in a week and less than one-third of its value roughly seven months ago. Fear has replaced euphoria and optimism.

This precipitous decline has been spurred on largely by broader market forces and some high-profile scandals within the crypto community. With inflation setting 40-year records and global instability, money has flooded out of what is generally regarded to be a risky asset class. And this risk has been solidified in the minds of many by the near-total collapse of the stablecoin TerraUSD UST/USD. 

Investors are spooked and looking for safety. How can you grow your capital in a market like this while maintaining some peace of mind? The creators of the crypto ecosystem called Seasonal Tokens believe they have found a possible way.

Made up of four interrelated tokens — Summer SUMMER/USD, Autumn AUTUMN/USD, Winter WINTER/USD and Spring SPRING/USD — the project aims to help traders more predictably profit because of its novel mechanics.  

A cyclical schedule is set that is intended to cause the tokens to rise and fall in relative value to each other in a predictable manner. Every nine months the difficulty required to mine new tokens increases for a specific season, effectively reducing the supply of that token and theoretically making it more valuable. This phenomenon has been seen across many proof-of-work coins, most notably BTC.

At the same time, rewards for farming the tokens are adjusted, increasing demand. With these two mechanisms, each token is meant to be able to cyclicly rise and fall in value relative to one another.

The team behind Seasonal Tokens hopes to create a more fruitful experience for investors. In the world of crypto, traders at times might essentially be gambling. And gambling in a market that is in a steep downturn is especially dangerous. If the model proves correct, Seasonal Tokens hopes it may be a way to avoid the losses many are experiencing across the market.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

Featured photo by Maxim Hopman on Unsplash