Since the introduction of cryptocurrency in the past decade, investors have moved from investing only in stock, properties, and bonds to digital investments. There are nearly over 11,000 crypto coins as of 2021 and among them is Bitcoin, which has risen from a fringe technology popular with cryptographers to the world’s ninth most valuable asset by market cap.
The price of bitcoin and the number of Bitcoin users rose massively over the years following the clarity on the legality of Bitcoin and other cryptocurrencies by the regulators in major economies. Banking connections were established, making it easy to convert local currency to and from bitcoin.
Bitcoin is the world’s first decentralized cryptocurrency which was invented in 2009 by a pseudonymous programmer or group named Satoshi Nakamoto. It is a digital currency that uses public-key cryptography for its transactions and the transactions are done without the oversight of a central authority (which means it is out of government interference or manipulation).
The digital currency monetary system is carried out through a unique kind of software, cryptography, and financial incentives. The Bitcoin network is controlled by a cryptographically secure, verifiable database called the blockchain and its ecosystem consists of a global network of stakeholders including the miners and traders. Through Cryptocurrency revolutionary decentralized technology, investors have become millionaires, money reimagined, and multi-billion-dollar industry-inspired over the years. Take a more deep dive into bitcoin news – BTC news today.
For the past decade, despite the highly volatile nature of Bitcoin price in the crypto market, it has become the top-performing asset of any class (including stocks, commodities, and bonds), climbing a staggering value of 9,000,000% between 2010 and 2020.
2021 has been a turbulent year for cryptocurrency. The rise in Bitcoin price began in Sept 2020. Exploding from below $12,000 at the beginning of the month to over $60,000 by April. In May, the crypto market experienced a wave of bad news, including Elon Musk’s support for Dogecoin and a crackdown on China’s cryptocurrency services, leading to a dramatic drop in price. As of July, Bitcoin has slowly dropped below $30,000.
For the first time since April 2020, Bitcoin broke the $60,000 price barrier over the weekend. Its market price was close to the all-time high of $64,800 it reached on 14 April. Due to the progress on bitcoin ETFs, the bullish move was in control and by Monday on 22 Nov, the expectation of the cryptocurrency community and mainstream investors for SEC approval of bitcoin ETFs became a reality.
Crypto Economy Slides By 8% With An Exit of $22 Billion in Value
Unfortunately, following the massive plunge on 25 Nov. 2021 which is on Friday morning, the global crypto economy has lost 8% in value as a great number of crypto asset prices dropped significantly during the overnight trading sessions. The Crypto economy has lost more than $22 billion in value as the leading digital currencies in the top 20 standings experienced losses between 6% to 20%.
Bitcoin’s economic value has slid to 8% and its market cap is just above the $1 trillion mark while Ethereum’s (ETH) economic value has slid 9.4% for the past few days. Stablecoin trades command more than half of the recorded volume with $115.1 and each ether was changing hands for just above $4K per unit on Friday.
Currently, Bitcoin has dropped below $10,000 from the peak it attained on 10 November and there are no solid signs that the price slide is stopping.
The expectation has been that the downtrend will adjust horizontally in the short term but the long-term downtrend remains unchanged. Various analysts and experts have expressed their thoughts on what caused this latest price drop and where the cryptocurrency might go from here.
Crypto Economy Slides in Value Due To New Covid Variant
Following the outbreak of a new covid variant which was discovered in South Africa, Bitcoin and other cryptocurrencies have fallen sharply and you can look at the price changes from this SEO Tools Centre Bitcoin tool. According to various analysts, the covid variant is said to be more contagious than the Delta variant and it is said to have around 30 mutations leading to a shake in traditional financial markets.
Also Read: A Beginner’s Guide to Bitcoin
Alex Krüger an economist and Bitcoin advocate on 25 Nov 2021, expressed his view on Twitter concerning the effect of the new covid variant on global markets. Krüger said that there is a big move across global markets and traders are pricing at higher odds due to renewed lockdowns on low liquidity conditions.
US Infrastructure Bill As a factor To Crypto Economy Slide
The recent infrastructure bill signed into law on November 15, 2021, by president Biden is seen as one of the factors that contributed to the crypto economy crashing. The infrastructure bill consists of new requirements for certain cryptocurrency transactions. This might have little to do with infrastructure but could have potentially dramatic implications for millions of United States businesses, investors, and consumers who have chosen to invest using cryptocurrency and rely on its efficiency, transparency, and accessibility.
Currently, Investors are not certain about the survival of equities in another economic hit with little or no support from the central banks, as central banks would have to deal with the two challenging factors. According to Ipek Ozkardeskaya, a senior analyst at Swiss quote, he pointed to the fact that inflation is rising, and COVID news is getting worrisome.
Based on the analysis, the issue remains that they can’t use the same equipment to fight back inflation and the economic slowdown. And the choice is a difficult one.