Does ‘Crypto Winter’ Affect Crypto Gift Cards?

Crypto gift cards have become increasingly popular over the years. Over the decade-plus rise of Bitcoin and second generation coins and blockchains like Ethereum, many individuals and institutions – both large and smaller-scaled, have continued seeking to develop and progress the blockchain science.

This has benefitted crypto gift cards as it also has the many various intertouching aspects and sub-industries which live and exist within the larger-expansive crypto industry. So then just the same, when things impact the crypto industry such as the living concept of ‘crypto winter’, a time in which the market becomes low and slow for an extended period, the various sectors are affected in the same way, only in decreases and not productivity and price spikes.

What Is Crypto Winter?

Before investigating if so, and then, just how crypto winter affects Bitcoin gift cards and the entire gift cards sector across all cryptos, it would seem appropriate to first ensure that the term itself is fully explained and comprehended.

Crypto winter is a time in the cryptocurrency market when the prices of digital assets drop to substantially lower levels compared to most-often highs experienced in the individual prices of assets recently, prior to the low period. A fundamental characteristic of a crypto winter is a general market downturn, similar to, but not the same as a bear market.

Crypto Winter Is Not A Bear Market

Bear markets can be calculated with percentages much more easily than crypto winter. In fact, bear markets are considered around a 20% decrease from recent highs across the market by many metrics-dependent standards.

Crypto winter can range in any variety of weeks, or several months at a time, and the prolonged ‘cold market conditions’ are typically coupled with a decreased public interest in trading and investing in crypto overall. It is literally ‘cold and lonely’ in many ways, equating to the crypto winter sometimes being tough for individual investors to survive. But just like every underperforming market, things eventually turn again at some point. And while the crypto winter is present, everything including crypto gift cards, can and more than likely will be affected in some way to some degree.

A Closer Look Into What Happens With Crypto Gift Cards During Crypto Winter

Crypto gift cards hold crypto, whether Bitcoin, Ethereum, or any one of a number of digital assets traded on the open market. No matter the coin, each associated gift card is subject to the volatility which it reflects in the market. Meaning if Bitcoin is experiencing a decline and trading at a lower price denomination, then the BTC present on a gift card is worth the same value against the dollar, or other products and services eligible to be exchanged for the value of the BTC.

If a retailer has been experiencing consistently increased demand for their product then the gift card denomination held for that retailer may not go as far as other times when supply grossly exceeds demand. If the product has to be priced higher due to greater demand, that means a gift card worth $100 USD would essentially buy less in those market conditions. While it is a reference to opposite sides of the gift card proposition, the point is, various factors and conditions can affect the value of a gift card, and in this case, a cryptocurrency gift card.

When Crypto Moves, Everything Around Crypto Moves

When considering crypto-fueled gift cards, not only can the actual and intrinsic value of crypto being lower in a crypto winter affect the value of the gift card directly, but the perceived value placed on crypto during crypto winter conditions is also considerably lower than other times in the market, which can also affect the crypto gift card market.

In the same way fewer investors are typically willing to trade in crypto winter conditions, thereby reflecting a decrease in actual trade volume and less liquid circulating through the market, a fewer number of people are typically anticipated to show interest in crypto in general and therefore a lesser total dollar amount will more than likely be attributed to the crypto gift card market.

Of course there may be differences and variables which come into play with this. There could be specific times and seasons where it seems that there is almost no impact felt in the crypto gift card industry, such as holiday seasons for instance. Specific platforms may have specials or a niche market which is less affected by the greater market conditions. Variables certainly exist, but all in all, when a crypto winter has set in it typically makes it more difficult for everything within the market.

Seeing The Light Beyond The Winter

While crypto winter can be rough, and the end can sometimes seem like it’s nowhere in sight, the market always develops. Things never stay the same forever in crypto or any market for that matter. With that in mind, an individual investor could learn to look at crypto winter as a time when less congestion and lower prices in the market make conditions ideal to have an opportunity to capture value at a time when some or many digital assets may be trading at potentially undervalued price levels.

When the use case of the coin or token is understood, and the holder sees the value in the network and its developments, it’s like the use case of any other instrument or equity which might be traded on any of several global equity markets. So crypto gift cards will always hold the value of the crypto held thereon. As the market experiences its ebbs and flows, so will the Bitcoin gift card and other crypto-based cards, but crypto winter has its end eventually.