Cryptocurrencies are on the rise, and money is pouring in. However, a ”Crypto Winter” is possible

<p>After days of selling pressure, investors snapped up stocks and other "risk assets" on Thursday, causing Bitcoin and other cryptocurrencies to rally.</p> <p>In afternoon trading, bitcoin was up 2.3 percent to $43,000. According to CoinMarketCap, Ether, Solana, Terra, and other major tokens were also rallying, bringing the overall market value up 2.3 percent to $2 trillion.</p> <p>According to Bloomberg News, Google is developing a new blockchain unit, the latest indication that Big Tech is considering how to profit from the crypto economy.</p> <p>According to Bloomberg, Shivakumar Venkataraman, a Google engineering vice president, leads a unit focused on "blockchain and other next-gen distributed computing and data storage technologies."</p> <p>Google, did not respond immediately to a request for comment.</p> <p>Venture capital is also pouring into the cryptocurrency industry. According to the Financial Times, one of the largest players, Andreessen Horowitz, plans to raise $4.5 billion for a new fund focused on blockchain-based companies.</p> <p>According to PitchBook, more than $30 billion in venture capital and other forms of private equity will be invested in crypto startups in 2021, a sevenfold increase over 2020.</p> <p>Nonetheless, capital may be pouring into cryptocurrency at a difficult time for the industry and technology as a whole. As the Federal Reserve tightens monetary policy, investors have grown concerned about rising interest rates. High-priced technology stocks have taken a hit. Cryptocurrencies have also suffered; the overall market has lost a third of its value, or $1 trillion, since peaking at $3 trillion in November.</p> <p>Tighter monetary policies are one of several reasons why UBS warns of a second "crypto winter" in a research note published on Jan. 14. The previous "winter" in 2018 saw Bitcoin and other cryptocurrencies plummet by more than 75% from previous highs. It took them about three years to get back to their 2017 highs.</p> <p>According to UBS, cryptos exploded in 20