Crypto winter: with the same money you buy 4 times more bitcoins than a year ago

On January 1, 2022, no one would have imagined that Bitcoin lose two thirds of its value. Nor, that two of the 10 most important cryptocurrencies in the world would disappear. Much less than Major Crypto-Financial Services Companies Will Collapse.

And by no means, that the second most powerful exchange house would go bankrupt, and that its owner, the popular and adored young wonder, Sam Bankman Fried, will almost end up in jail.

No one would have imagined that, at the end of the year, you could buy four times more in bitcoin than a year ago.

That January 1 (less than a year ago), bitcoin was trading at US$ 47,954. per unit. The price was on a predictable downward curve, after reaching $69,000, further pushed lower by some bad news from the US economy. It could be expected and in fact it was already anticipated, a colder year, far from the price ceilings of 2022 but not the catastrophe that broke out during the year.

The value of cryptocurrencies continues to be ironed.

We already know, reality is dynamic and during this year things happened, so many things, many of them unexpected, that we not only reached crypto winter but also crypto hell.

But there can be redemption. The lowest prices of the last two years are today offered on the blackboard. On January 1 of this year, no one expected these prices to appear again either.

See: The man from Mendoza who installed Bitcoin as legal tender in El Salvador

To understand the dimension of the opportunity, on November 9 of last year a bitcoin was bought with US$ 69,000. Today, with that sum, 4 bitcoins are bought. But since anyone can buy BTC with just US$10, because each bitcoin is divided into 100 million parts, the situation today is as follows: with the same money, starting at US$10, you can buy four times more satoshis (the fraction of bitcoin) than those that were acquired in November 2021. Of course, there is always risk, as in any investment and more so in speculation.

The rise in interest rates in the United States makes investors play it safe and not risk cryptocurrencies.

Bitcoin ends 2022 walking in the USD 17,000 range, after having visited the USD 15,500 abyss six times in the last two months. This behavior raises fears that it could fall further, but blockchain data specialists say that it is making a bottom and that the sale is somewhat exhausted.

See: An artificial intelligence defined what is the best cryptocurrency

What happens is that in the middle are the great events of the year, strong distorting factors that have not yet been turned off. Nobody imagined the outbreak of a war that would jeopardize the world order and awaken the nuclear threat. It happened in February, in the face of international disbelief and the conflict in Ukraine has no goal of ending, nor of hastening a winner.

The periodic increase in the interest rate of the United States Federal Reserve is another of those already unexpected events. Because it was known that it was going to reach 3% but not 4.25% as it is today and that, at this time of the year, his boss, Jerome Powell, would confirm more increases in the future until inflation eases.

The war, the increase in rates, the increase in inflation worldwide, the outbreak of Covid in China, the nuclear threat, and the rise in the price of energy caused the crypto winter that began to appear at the beginning of the year. become a polar cycle.

Such a situation soon brought crypto hell to the market, striking down those who were weak in papers or in very weak positions. This materialized in a cryptocrash, back in May, when the digital currencies Terra and LUNA lost 99.9% of their value in 72 hours, in the midst of a panic run, leaving a trail of victims.

It was only the beginning, because not only were there millions of people who were trapped with these cryptocurrencies on them, without time to react, but there were also companies dedicated to the financial business, which were compromised.

They held out for another month as best they could and began to collapse for having kept large amounts of TERRA and LUNA in their possession, the value of which was never recovered.

Among the main ones were 3AC (Three Arrows Capital) and Celsius, the most important crypto financial platform in the United States, with two million clients. The fall of both and other lesser firms would leave injuries for the next round.

That fatal turn came a short time ago, in November, when a journalistic outlet from the crypto world revealed the maneuvers of FTX and Alameda Research, to get out of the compromised exposure in which 3AC had left them, and that they had resolved by issuing their own FTT cryptocurrency as if were Argentine pesos, using it as collateral for future obligations. This led to the precipitous fall of FTX in five days and it has been the last collapse. No one dares to point out if there will be more.

The ups and downs and scorched earth left by cryptocurrency markets should not be confused with cryptocurrency technology. The markets are that, buying and selling, in this case of assets with value. They speculate on the price of meat, soybeans, stocks, and also cryptocurrencies.

In any case, the main challenge of cryptocurrency technology is the reliability of the invention. Bitcoin is a computer program to issue a digital currency with certain and rigorous parameters that automatically controls its issuance and control.

This program has been running non-stop for more than a decade, until now it has not been hacked, tampered with, nor has it been possible to issue fake bitcoins or more than the program intends, nor has the same bitcoin been used in two different operations than the one the program intended. time, which would be a fraud maneuver.

It operates alone, through a blockchain network of individuals around the world, ordinary people, workers, professionals or millionaires and companies that have set up mining farms to take their benefits. But it does not have an owner, there is no corporation that owns the program, it is not from Microsoft, nor from Apple, nor from Elon Musk, nor from anyone, nor from a country, it does not depend on a central server but on the network of people who make it work.

This is the strength of cryptocurrency technology and specifically of blockchain technology that opens up a promising future that, as computer engineers say, “is here to stay.”

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