It has been stated by various digital currency experts and analysts as well s found by those involved in this sector, that the nature of crypto currency which is quite unstable or unreliable, makes it one of the best investment opportunities. If it is done in a proper and well thought out way, it can generate a huge amount of profit.
In the market today, there is a presence of a wide range of cryptocurrency varieties but they're all not the same. Some cryptocurrencies can be said to be more unreliable or volatile than the other ones. However, it is important to keep in mind that with more volatility, the risk of investing in it also rises.
A look at the volatile nature of crypto currency
It is needless to say that the presence of such volatility and such unreliability in the cryptocurrencies have brought about certain drawbacks for it as well. Those who were interested in it, are however afraid of investing in ut as they are reluctant to get involved in it for the risks involved.
In addition to that, as the cryptocurrency market is going through a constant price change, incorporating it or using it as a medium of exchange, especially in the retail market has become a next to impossible task. There are numerous reasons or factors that contribute to this volatile nature of cryptocurrency and these have been discussed at length in this article.
Understanding the law of demand and supply
These two terms are entities, that can never be trusted. These are not always stagnant and are subject to constant change. Therefore, they can be termed as quite unpredictable. In the cryptocurrency market, like in any other market, the prices go up or down depending upon the supply and demand. Therefore, the changes in demand can be said to be a major factor for the crypto being so volatile.
The absence of regulatory frameworks
It is needless to say that crypto money is not regulated by any governing bodies such as the government. When it comes to fiat money, it is the government that ensures stability and is responsible for controlling it. Measures are even taken when there is deflation or any such troubles.
However, in the case of cryptocurrency, there are no such regulations that can keep the market stable or in control. Thus, it becomes a probe to instability and volatility. They also go up and down in price very quickly.
What are some of the speculation that contributes to its volatility?
It can be said that the future of trading, depends upon the speculation that arises in the people. When people involved in the trade visualize or sense a possible decline in the market, they attempt to sell it as soon as possible. This is done to avoid any sort of losses they might have to bear if they do not sell them soon.
This dependency on the masses as well s the media for new regard for the market, and their role of them as such an important factor in deciding the selling of crypto, adds to the volatility of the coins.
Conclusion
It is quite understandable from the nature of the cryptocurrency, that the more it is accepted or used by companies, its value rises all the more. There have been various instances where well-known companies have expressed an interest in the use of cryptocurrency as a medium of trade. It has completely transformed the dynamics of the crypto market.
However, it is quite impossible to predict or even assume which cryptocurrency would be in use or in demand at a given time, which further adds up to its volatile nature.
There has been some major development in the cryptocurrency segment, this year as there have been amazing records making it one of the best years for crypto ever. Various instances such as the Bitcoin and ether, reaching their peak this year, altcoins and dogecoins receive humungous popularity, various digital assets also got sold for millions of dollars, NFTs also stored high in their value this year, etc. All in all, this year has been one of the best years for all aspects of crypto. All. of this and more helped in bringing the cryptocurrency into the mainstream market and set a mark for itself.
Developments in the field of cryptocurrency this year
The development that has been witnessed this year, is quite difficult to be deciphered. However, out of the many certain developments have been the most eye-catching and noticeable. These selected few instances are as follows:-
• For the first time, the price of Bitcoin passed the amount of 1 trillion and set a new milestone. It happened as a result of the support that cryptocurrency gained from institutional investors and financial companies. After that various reputed and well-established companies, started to invest in Bitcoins as they are ur as a potent investment opportunity.
• After the sale of Beeple's 69 million dollar sale, the NFTs saw popularity that had never before been witnessed since its beginning. It can be said with certainty that this year was the most successful ever in the history of NFTs and helped it reach its peak as well.
• After Elon Must showed an interest in the Dogecoins, the journey of this form of crypto currency has been quite a roller coaster, that had to face various ups and downs. However, the last year has been a great year for Dogecoins as it began gaining momentum after several tweets made by Musk himself and from the support that Musk as well s SpaceX has shown for the Dogecoins.
• After the adoption of Bitcoin by El Salvador as a legal tender, it saw one of its peak moments this year and el Salvador also became one of the first countries to make it happen. With this, it became legal for people to use these Bitcoins as a form of exchange, payment for goods as well as payment of taxes.
Negative trends in the field of cryptocurrency this year
Even though there has been some groundbreaking development in the field of cryptocurrency this year, there have also been negative trends. These were also some of the first to have occurred ever and which were quite surprising for the users of cryptocurrency as well. These are as follows:-
• One of the cryptocurrency platforms was hacked and almost as much as 600 million dollars has been stolen. It was said to be one of the biggest theft that had ever occurred in the digital currency field. The hacker was able to get into the network and carry out the thievery. However, the hacker returned all that he had stolen. But the act left everyone in shock and made it a noticeable event that occurred in this particular year.
• The Bank of China banned the use of cryptocurrency. They deemed all sorts of use of crypto or trading in crypto, as illegal.
• Various rules and regulations were imposed on the use of cryptocurrency and its trading. Various regulatory frameworks were also created specifically for cryptocurrency. These regulations and the rules and terms that emerged out of them also brought forth some concerns that the crypto community had regarding the regulations.
With major changes occurring in the arena, Bitcoins are still struggling for support as they venture into a new week. It has been observed and verified that the Bitcoin market has not yet crossed the 60,000 dollar mark. Those who are already invested or keeping an eye on the digital currency market information need to be more vigilant and look out for forthcoming updates and modifications.
What does blockchain data portray?
There have been various analyses presented by different companies that indicate the relationship that the Bitcoin prices and the network activity share. It has been stated various well-known companies that are involved with data analysis and with analyzing the digital currency market, have stated that network activity is on a rise.
It has further indicated that with the rise in the network activity, there is also a possibility of a potential that the 60000 dollars mark can be broken.
What have analysts further predicted about Bitcoin?
Even though there have been a various positive indication that shows a steady rise in the Bitcoin Market, there is some well-known digital currency analyst who has differed on this point. They have further stated based on their analysis that there might be a downturn.
However, ut is believed by others involved in this trade, that if the long run is to be looked at, then it shows a positive future for the Bitcoin market. They have further said that though things are transforming or going through changes constantly, there is a certain bullish feeling in the environment which is only getting stronger with time.
The emergence of new names in the Bitcoin market
With the constant changes that are occurring in the Bitcoin market, various other companies or brands are also emerging on the scene. They are also headed towards gaining market favor and establishing a name for themselves in this particular arena.
The new companies that are making an appearance are also in high demand and even have investors lined up who want to take profit from them. There is also a high possibility of these blockchains gaining immense popularity overnight, after their release. However, it is also to be considered that the probability of that happening is very rare and sometimes even impossible.
What are the scenarios globally?
There has been a narrative going on, which states that it is an inflationary hedge. It is said to be benefitting from a situation where the monetary and price go uncontrolled. The cryptocurrency is programmed in a way that it can give rise to or produce only a finite number of coins. These coins are produced at stable intervals, more or less.
What is the tension going on, Internationally?
There have been various ongoing international relations that have proven to be disastrous for the trade between various countries. For example, the Biden administration has not been able to conduct successful sessions with one of the largest economies in the world, that is, China. However, they are not the only ones that are facing such issues of communication.
Conclusion
Various other countries gave been facing the same issues as well. It has also been analyzed by various bitcoin specialists or digital currency analysts, that Bitcoin is such a thing that is said to be profiting from adverse climates. It is said to be performing more stably when it has to adapt to a certain adverse situations and is known to be benefitting from the chaos that prevails all around and can even be termed as an anti-fragile element.
It is, however, become quite important to stay on top of this news and updates, especially in today's time and age when things are changing rapidly and unexpectedly.
Decentralized media is fairly a new gateway for many artists and creators to get their ownership back and reduce third-party interference. Before decentralization normally, creators and artists have to go through a certain level of regulations to showcase their talent and their content is sold out to other parties but the issue is content creators get low profit due to the intervention of the third party. With the help of decentralized social media, there is no need for third parties and content creators have their own back they directly contact their users.
It is also beneficial for the consumers they can choose content according to their interests and also make some interest groups in which they can vote. Now consumer data can not be hacked or misused without permission and also don’t need to follow a certain algorithm, they have control over their data.
DECENTRALIZED MEDIA
BLOCKCHAIN AND Flick came up with a new idea to build an open platform for both creators and consumers. In this platform, users are allowed to pitch and fund their projects. In this platform, creators pitch their projects and community votes according to the suitable projects which they think are worthy. The project which gets higher votes can get funding from the Flick platform. The best part is both users and creators can work together to build something valuable which is profitable for both parties.
DECENTRALIZED MEDIA
Blockchain technology gets very famous due to its tremendous security purpose. In the blockchain, social media content is secured and there is no misuse of your data possible. Every user has a private key which is hard to hack. There are already different blockchain social media platforms in markets which has unique features.
STEEMIT
The Steemit platform provides the user to earn crypto for creating and organizing content. Steemit is launched in 2016 and it was the first-ever decentralized app that arrived on Steam. It is also one of the oldest blockchain social media which is still in operation.
ARRIVAL OF TWITTER IN DECENTRALIZED SOCIAL MEDIA
Twitter founder Jack Dorsey made clear that Twitter is jumping into crypto and most specifically bitcoin and they have already announced that they are launching a crypto team and their goal is to master the excellence in blockchain and Web3. According to the report Twitter’s main purpose is to give more attention to crypto payments and NFT galleries.
But in long term, their main motive is to provide users more ownership and control over their data with the help of blockchain social media. At the end of the day, it will become more beneficial for users as they get more control of their data which is a great step by Twitter. Users can post their data but the only difference is that there is no need to follow centralized media rules which eliminates fake news and misinformation which is great.
CONCLUSION
The adoption of decentralized social media surely changes the whole experience for the users and creators and eliminates the third party. Creators now have more ownership of the content and there is no restrictive algorithm to follow to succeed. Users feel safer than ever before their data is not used or gets stolen by companies. And it is all possible with the help of blockchain technology. In social media, you have already noticed that a huge amount of fake news and fake data is used to increase likes or for some, it is used as a promotion function. Users are manipulated with their data and likes. Decentralized social media provides a platform that gives ownership without hampering the experience.
Those who have ventured into the crypto market know how volatile the market can be. Therefore, it requires a detailed and thorough study before one decides upon forming any sort of association with the market. It is also important to take a look at the trend of the previous year, such as a detailed study of the bear market in the previous years.
This would help people understand how things were or how things worked when they faced the crypto market crash in 2008, like the one being faced now in 2022. It would help one analyze the difference as well as the similarities, and in the process understand or predict what ll there is to come or what all can be expected to come.
The Value of Bitcoin during the bear market
It has been recorded that in the year 2017, the Bitcoin value touched its all-time peak with a value of 19.1k dollars. However, in the years following it, the Bitcoin value showed a major downturn and fell as low as 3.2k dollars. It was estimated to be a downturn or drawdown of almost as much as 83%. It was even considered to be one of the lowest that the Bitcoin market has ever faced.
However, in the current year, the Bitcoin value has not fallen as low as it had fallen in the year 2018. But there has been a severe drawdown which has become a matter of major concern. This year, it has been called almost as low as 73% from what it was in the year 2021. If it was to be compared with the fall that was experienced in the year 2017, it could mean that it would have to fall 11.4k low to be equal to that experienced in the year 2018.
However, it cannot yet be said anything definitively, as if in the coming months, the value of Bitcoin falls any less, then it would surely match what has faced in the 2018-19 market.
Learn more about the realized price of the Bitcoin
The data that has been collected from various trusted sources indicate that the realized price of the Bin is 23,340 dollars currently. This is said to be the average price of all sorts of Bitcoin that I'm demanding right now. It is a rare phenomenon when the value of Bitcoin falls lower than the value given here. It generally occurs during the end of the near market season.
However, with the current situation of Bitcoin and the value at which it is trading right now, it can be said that it might soon hit its lowest. It would not take long before it reaches its bottom.
As per the MVRV Z-score, which can be referred to as the difference between the market value and the BTC realized value, Bitcoins value has gone tremendously low. However, in the years 2018 and 2020, these scores had reached their lowest levels and this year it is headed towards the same scenario but might not reach so low.
A closer look at the Bitcoin value
However, a closer look into the trends from the year 2017 to 2021 ut has observed that there has been a significant rise in active addresses. The Bitcoin market cap has also noticeably risen by over 300%.
It has also been reported that the rise in active addresses is much less than that of the rise in Bitcoin addresses. This steady increase in both factors has led to the wide acceptance of general networking.
Conclusion
It is not always an easy task to predict or make assumptions about how the bear market is going to function at a particular time. It has become even more uncertain given the current times and situation.
