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Graphics: Boom, Bust, Perplexity – Years of Bitcoin Ever

File Photo: The representation of the virtual currency Bitcoin is displayed in front of the stock price graph in this figure taken on March 15, 2021. REUTERS / DadoRuvic / Illustration

June 30, 2021

Tom Wilson

London (Reuters) – If you are a Bitcoin investor, your nerves may have been quite throbbing in 2021.

The cryptocurrency journey towards mainstream investment and commerce is accelerating, with major financial companies and businesses embracing new assets.

Such interests helped push it to a record high of $ 65,000 in April. But typically in a whimsical way, it has fallen almost in half since then.

At the midpoint of the year, the original largest cryptocurrency has increased by about 20% year-to-date. There are several charts that tell the story of the Bitcoin year so far.

1 / Still volatile

Violent price fluctuations have been a decisive feature of Bitcoin throughout its lifespan of nearly 13 years. In the first half of 2021, there was no difference, despite the expectation that increased market liquidity and enhanced infrastructure would curb volatility.

Bitcoin has more than doubled since the beginning of the year, reaching a record $ 64,895 in mid-April. Since then, regulators around the world, especially China, have cracked down on cryptocurrencies, causing them to fall by more than half in just five weeks.

In May alone, Bitcoin lost 35% in the worst month since 2018. Last week, Bitcoin fell below $ 30,000 for the first time since January, temporarily eradicating year-to-date profits.

According to JP Morgan analyst Nikolaos Panigilzoglow, many large investors have also left the Bitcoin market after the price surge in the first quarter, with some shifting to gold.

“What we found in the second quarter was that the demand for Bitcoin is actually price sensitive,” he said. “Some institutional investors began to break out of Bitcoin in April … they thought Bitcoin was too expensive compared to gold.”

Bitcoin surpasses meme stock https://fingfx.thomsonreuters.com/gfx/mkt/xegvbzajxvq/Pasted%20image%201625044892455.png

2 / Bitcoin or Altcoin?

Bitcoin has dominated the headline so far this year. Still, many of its small digital currency rivals (known as altcoin) are making more money.

Ether, the second largest cryptocurrency, has nearly tripled so far this year, supported by the surge in the so-called decentralized financial sector. DeFi often uses the underlying blockchain technology to provide financial services without traditional intermediaries such as banks.

Signs of the Ethereum blockchain gaining momentum in mainstream financial companies are also boosting profits.

The seventh largest coin, XRP, has earned a similar amount. Other previously obscure coins, such as Dogecoin, which started as a joke in 2013, far outperform Bitcoin, attracting investors to a rapid profit outlook. Dogecoin has increased by more than 5,000% so far this year.

Bitcoin or altcoin? https://fingfx.thomsonreuters.com/gfx/mkt/xklvyxdqwpg/Pasted%20image%201625045597120.png

3 / Better than meme strains

Individual investors were fascinated by the explanation that Bitcoin was adopted this year and can act as a hedge against inflation and as a future payment method.

It was also recognized that promoting profits was a means of quick profits. This is the perceived quality shared by another 2021 financial market phenomenon, the “meme” stock, whose value is driven by social media topics.

Two of the major meme stocks, GameStop Corp and AMC Entertainment Holdings, surged in the first quarter with Bitcoin, backed by retail investors who had spare time and free time to block the coronavirus stimulus.

Still, the assets have been separated and Bitcoin’s profits this year have been outpaced by GameStop (more than 1,000%) and AMC Entertainment (more than 2,500%) so far.

“It’s just an extension of crazy free money, and I think you can see some spillover over cryptocurrencies,” said Joel Kluger, a strategist at crypto exchange LMAX Digital.

Another Wild Ride: Years of Bitcoin so far https://fingfx.thomsonreuters.com/gfx/mkt/qzjvqxwnxpx/Pasted%20image%201625045877544.png

(Report by Tom Wilson, edited by Pravin Char)



Graphics: Boom, Bust, Perplexity – Years of Bitcoin Ever

Source link Graphics: Boom, Bust, Perplexity – Years of Bitcoin Ever

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