Bitcoin did not protect capital from inflation last year. Not only that, it went into a massive bear market like technology stocks. However, most analysts believe that there is little room for BTC to depreciate.
A year ago, on November 10, 2021, bitcoin’s historic peak was marked. The cost of 1 BTC has reached $68,976 (this value may vary depending on the exchange). However, since then, the share of this oldest cryptocurrency has fallen by -73%. And since then, a lot has changed in the cryptocurrency market…
What has happened in the past year in the bitcoin market
Bitcoin became cheaper despite high inflation. Thus, he did not justify the hopes placed on him as an anti-inflationary defense. It acted like a risky tech stock, entering the bear market mainly due to higher US rates.
However, the rise in the value of money in the US and many other markets was not the only reason for the strong BTC sell-off. Let’s recap some of the most important bitcoin facts from the past 12 months:
A series of bankruptcies of important organizations from the world of cryptography. This year, the third largest exchange FTX, the crypto-financial platform Celsius, the Terra/Luna ecosystem with the stablecoin TerraUSD, and the Three Arrows Capital fund went bankrupt. Each of these events had a strong negative impact on sentiment around cryptocurrencies. There was a panic yesterday about the withdrawal of the Binance exchange from the FTX bailout.
The US SEC is still rejecting BTC ETF applications. Investment firms have been applying for permission since 2013. However, the SEC has yet to issue this authorization. This year, he denied the petition, in particular, Shades of Gray, and in response to this, a lawsuit was filed. Interestingly, he already owns the Grayscale Bitcoin Trust (GBTC), which has $13.5 billion in assets.
Mining BTC is getting harder and harder. This year, this trend has intensified. The indicator showing the profitability of mining, that is, the total hashrate, remains close to its historical maximum. As electricity prices soared, miners got in big trouble and started selling off their BTC holdings en masse.
More and more well-known investment companies own BTC. BlackRock, Fidelity, Van Eck. These are just some of the major investment firms that admit to investing in cryptocurrencies, including bitcoin of course. They started doing this in the last 2 years. Bitcoin is also on the balance sheet of an increasing number of US fund companies such as Tesla, Microstrategy, Block or Coinbase.
Overlays in the Bitcoin network will make it useful. With the advent of the Lightning Network overlay, there is an increased likelihood that BTC will become an increasingly used means of payment. Arcane Research data from August 2022 shows that the number of Lightning network users has grown from 150,000 in a year and a half. users up to … 80 million! About 48% of transactions are transactions between individuals, but already 18% are commercial transactions (purchase / sale of goods or services). The cost of online transactions increased by approximately 480% (in US dollars) in 12 months.
How long will the crypto winter last?
What’s Next for Bitcoin? What are the forecasts of well-known investors and analysts? We have collected some important and interesting votes over the past weeks. They show that the “crypto winter” may be slowly ending and the price of BTC should not fall significantly below current levels.
According to technical analysis by Northstar, the price of bitcoin could be approaching $10,000. You should not go back to buying this cryptocurrency until its price falls below the 30-week average, according to a Northstar analyst.