The cryptocurrency market goes through cycles, characterized by bull runs with rapid price increases followed by periods of decline known as "crypto winters."

During a crypto winter, enthusiasm from investors decreases, leading to significant drops in crypto asset prices and trading volumes compared to previous highs. Unlike traditional capital markets, the crypto sector lacks standardized metrics to identify the start of a crypto winter.

While there is no official declaration of a crypto winter from regulatory bodies, a consistent trend of declining prices across various cryptocurrencies indicates its onset. The crypto winter that began in January 2018 lasted until December 2020.

The year 2018 saw a significant crash in the crypto market, with Bitcoin and Ether losing over 80% of their value from their all-time highs. The crash was attributed to challenges in the industry, including high failure rates of initial coin offerings and regulatory concerns.

Despite the downturn, Ethereum made strides toward transitioning to a proof-of-stake system for improved scalability. The transition faced delays, with upgrades like Metropolis and Serenity aimed at introducing proof-of-stake and sharding to enhance scalability. Ethereum's move to a PoS system, known as Casper 2.0, completed in 2021, following multiple rescheduling efforts.

In 2019, Ethereum gained mainstream recognition, particularly in the decentralized finance (DeFi) sector, which saw substantial growth. By the end of 2019, the total value locked in DeFi protocols reached $667 million. Ethereum also attracted interest from corporations, financial institutions, consumer brands, and celebrities, indicating broader adoption and recognition of the platform's capabilities.