Today's most popular trend is cryptocurrencies. It has, in fact, been a part of the culture for quite some time. Since the market's first great surge, all anyone has been able to talk about is the many cryptos in the market and the influence that they are having. Initially, only those in the financial sector were swayed by the asset's potential. Slowly, its hold expanded, and the world of crypto began to take over not only economic regions, but also major industries, TV and movie stars, music icons, and so on.
Bitcoins past can tell us about its future.
Prior to 2017, bitcoin was worth less than $1,000. However, on New Year's Day 2017, the cryptocurrency surpassed the $1,000 mark, and by the end of the year, it had risen to within touching distance of $20,000.
A rush of interest, first in Japan and later in South Korea, launched the boom. Small investors became interested in bitcoin after seeing primetime television advertisements and billboards promising large returns. Japan accounted for over 40% of daily trading volume worldwide after allowing trading on 11 crypto exchanges in April 2017.
Bitcoin's first winter (March 2018 to May 2019)
From March 2018 to May 2019, Bitcoin traded below $10,000 as opponents and regulators expressed concerns about its future. After a struggle over a cryptocurrency fork, multiple versions of bitcoin were generated, driving the price to its lowest level since the beginning of 2017.
The pandemic surge (October 2020 to April 2021)
Once the initial shock of the coronavirus outbreak, bitcoin began to gain traction after PayPal announced that users will be able to store bitcoins.
With the economy in lockdown and government stimulus checks to spend, retail investors began to bet on bitcoin's rise. The cryptocurrency has risen from under $12,000 to over $63,000 in six months.
The high, however, did not last long. In September 2021, China outlawed crypto mining, the use of computers to solve puzzles in order to earn cryptocurrencies, but activity swiftly shifted to other countries.
Then the United States and Europe raised the potential of legislation once more.
Ultimately, day traders got caught up in a viral meme coin craze, with many cashing out their bitcoin to play the equities markets, and further concerns were expressed, particularly by Elon Musk, about the environmental cost of cryptocurrency mining. Bitcoin hit a low of slightly under $30,000 in late July.
As stock markets tumble, Bitcoin suffers (July 2021 to today)
Bitcoin supporters first claimed that it was a hedge against inflation and impervious to market volatility. The cryptocurrency entered the mainstream in October 2021 with the debut of an exchange traded fund, which allowed investors to have exposure to its ups and downs without actually holding bitcoin. Bitcoin reached an all-time high of nearly $69,000 just days after the ETF began trading.
However, as a mainstream asset, its fortunes are considerably more strongly tied with wider market mood.
Fears in the US and Canadian economies in early December about growing inflation and anticipated interest rate hikes caused bitcoin's price to plummet, and bitcoin plummeted in tandem with the slump in US tech stocks in the months that followed. When inflation intensified this year, bitcoin plummeted even more, having its worst week since 2020 in June.
In the future, while regulators have promised to be "unrelentingly tough," it is still unknown how any future bitcoin restrictions will work in practise. However, there is more indication of collaborative thinking, and if regulators are successful in establishing standards, they will help the crypto business create confidence and, perhaps, eventually offer some stability.
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