By Tom Wilson
LONDON, Jun 30 (.) – If you’re a Bitcoin investor, your nerves may have suffered a lot in 2021.
The cryptocurrency’s journey into mainstream trade and investment flows has accelerated, and major financial firms and companies are embracing the emerging asset.
Such interest helped propel it to a record nearly $ 65,000 in April. However, following a typically whimsical pattern, it has since plummeted by almost half.
So far this year, the original and main cryptocurrency is up close to 20%. Below are some charts that tell the story of bitcoin in 2021.
1 / STILL VOLATILE
Sudden price swings have been a defining characteristic of bitcoin throughout its nearly 13-year life. The first half of 2021 has been no different, despite hopes that greater liquidity in markets and stronger infrastructure will dampen the changes.
Bitcoin more than doubled since the beginning of the year, to its all-time high of $ 64,895 reached in mid-April, before losing more than half in just five weeks, when regulators around the world – notably China – took action. energetic.
In May alone, Bitcoin lost 35%, its worst month since 2018. Last week it fell below $ 30,000 for the first time since January, briefly erasing its gains for the year to date.
Many larger investors also exited the bitcoin market after prices soared in the first quarter, with some switching to gold, according to Nikolaos Panigirtzoglou, an analyst at JP Morgan.
“What we found in the second quarter was that the demand for bitcoin is price sensitive,” he said. “Some institutional investors started exiting bitcoin in April … they thought bitcoin prices were too high relative to gold.”
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2 / BITCOINES OR ‘ALTCOINS’?
Bitcoin has made the most headlines so far this year. However, many smaller rival digital currencies, known as ‘altcoins’, have posted higher gains.
Ether, the second-largest cryptocurrency, has nearly tripled so far this year, fueled by a surge in the so-called decentralized financial sector. The “DeFi” often uses its underlying blockchain technology to offer financial services without traditional intermediaries such as banks.
Signs that the ethereum blockchain is gaining traction among major financial companies have also boosted profits.
XRP, the seventh largest coin, has earned a similar amount. Other once-obscure currencies, such as dogecoin, which started in 2013 as a joke, have also far surpassed bitcoin, and investors are drawn by the prospect of quick profits. Dogecoin is up over 5,000% so far this year.
3 / EXCEEDED BY MEME SHARES
Retail investors embraced bitcoin this year, lured by the narratives about how it can act as a hedge against inflation and as a future payment method.
Also driving earnings was the perception that it is a vehicle for quick profits, a perceived quality shared by another 2021 financial market phenomenon: “meme stocks,” whose value is driven by rumors on social media.
GameStop Corp and AMC Entertainment Holdings, two of the top “meme stocks,” soared in the first quarter alongside bitcoin, driven by retail investors with cash and time off due to coronavirus lockdowns.
However, assets have been decoupled since then and bitcoin’s gains for the year have already been outpaced by GameStop – which accumulates an increase of more than 1,000% – and AMC Entertainment, which has increased more than 2,500%.
“It’s just an extension of free money, which is freaking out and I think somehow you can see it spreading to cryptocurrencies,” said Joel Kruger of LMAX Digital.
GRAPHICS: Meme stocks outperform bitcoin https://tmsnrt.rs/3x8DLMz
GRAPHICS: Bitcoins or ‘altcoins’? https://tmsnrt.rs/3qxSMVW
GRAPHICS: Another Wild Ride: This is the year of bitcoin https://tmsnrt.rs/3w51IDh
(Edited in Spanish by Carlos Serrano)