As many remember, 2021 was definitely the year of cryptocurrency. Only a decade ago, Bitcoin’s price was less than a dollar, and in November 2021, its price skyrocketed to over $65,000!
The prices of major cryptocurrencies stayed high for some time until the crypto market experienced a major crash. While 2021 was the year of crypto, 2022 was anything but, and it wasn’t kind to digital currency investors. This article explores this topic and describes what has happened since 2021 to the major cryptocurrencies within the market.
The State Of The Cryptocurrency Market In 2021
Before we get to the Bitcoin price update, let’s check out the market situation back in 2021. Back then, the cryptocurrency market witnessed substantial growth and instability. Bitcoin, the most valuable cryptocurrency by market capitalization, hit an all-time high before plummeting precipitously in May 2021.
Other major cryptocurrencies, such as Ethereum, Binance Coin, and Dogecoin, experienced significant price fluctuations throughout the year because of that. The cryptocurrency market trend back then was to invest more in crypto to gain profit because of price increases.
Increased institutional usage and acceptance of cryptocurrencies as a real asset class was one of the reasons contributing to the rise of the cryptocurrency market in 2021, which has led to changes in cryptocurrency prices.
Large corporations like Tesla and Square made significant investments in crypto, and traditional financial institutions like Goldman Sachs and Morgan Stanley began selling cryptocurrency-related investment products to their clients. Thus, more people were interested in crypto trading for beginners, which also led to an increase in the value of digital currencies.
The rising interest from regular investors was another aspect fueling the cryptos and, specifically, the Bitcoin market’s rise. The popularity of the meme currency Dogecoin, which acquired traction through social media and celebrity endorsements, drew a new wave of investors into the market. This all led to Bitcoin and altcoin price movements.
However, regulatory challenges and crackdowns in some countries marred the cryptocurrency market in 2021. China restricted crypto mining and trading, leading the value of Bitcoin and other cryptocurrencies to plummet significantly.
To sum up, 2021 was a year of increasing value for crypto. People and businesses started accepting the currency more, specifically because of talks of acceptance of digital currencies as payment methods. However, the value increase didn’t last for long.
Bitcoin’s Price Change Since 2021
Most price analysis of major cryptocurrencies shows that things started to change closer to the end of 2021. The price began to fluctuate more as investors were concerned about inflation and the emergence of a new COVID-19 variant called Omicron.
The cryptocurrency price fluctuations continued, and more to the path of losing value than increasing. BTC fell significantly between January and May 2022. The closing prices hit $47,445 at the end of March. Even though some experts stated that the prices would continue falling, many didn’t see it coming. Eventually, BTC fell to $28,305 at the beginning of May 2022.
Since then, Bitcoin has dropped below $20,000 by the end of 2022. In July 2022, the BTC price was lower than $16,000.
Price Changes Of Other Major Cryptocurrencies Since 2021
Just like Bitcoin, many other cryptocurrencies also lost their value. In 2022, some of the most popular currencies were Ethereum, Terra, Dogecoin, Cardano, Solana, and others. Overall, at the end of December 2022, these currencies lost the following percentage of their value:
- Ether – 67%
- Dogecoin – 55%
- Solana – 93%
- Cardano – 80%
- Terra – 100%
- AMP – 93%
However, as most experts predicted, the cryptocurrency began bouncing back. Even though it didn’t regain its value as of the end of 2021, it is slowly increasing in value. For example, Bitcoin, which traded under $16,000 in July 2022, gained some of its value back, and today, in 2023, it costs over $29,000. Ethereum, which traded at slightly more than $1,000 in July 2022, has now reached over $2,000.
Factors That Influence The Cryptocurrency Market
The crypto market performance depends on multiple factors, but one thing is for sure: it’s extremely volatile, and this article proves this fact in numbers. Even though investment opportunities in cryptocurrency are still more than amazing, people should better understand what influences crypto’s value. Here are some of the most critical factors:
- Demand and supply. A cryptocurrency’s price is directly proportional to its demand and inversely proportionate to its supply. The price will rise if there are more buyers than sellers, and vice versa.
- Current events and news. Positive news can increase investor confidence, while negative news might provoke panic and sell-offs.
- Regulatory changes. Positive rules can improve market confidence and attract more investors, but bad regulations can create uncertainty and drive away investors.
- Adoption and usage by major corporations. The greater the number of people and businesses who use cryptocurrencies, the more valuable they become.
- The market sentiment. This term refers to investors’ overall attitude and feelings about the market. Positive sentiment can lead to more purchases, while negative sentiment can lead to more sales.
- Technological progress. New technologies have the potential to make cryptocurrencies more efficient, safe, and scalable. Naturally, it could lead to an increase in digital assets’ value.
It’s also worth mentioning that sometimes, crypto prices are affected by hype and media buzz. However, it’s not always for the best since many manipulate the market this way, buying currency for a low price and then selling it for a higher price.
Future Predictions For The Cryptocurrency Market
The current digital assets market update is that cryptocurrency is regaining its value. Recently, Ripple won the case against SEC, which led to XRP’s price increase. Overall, the investors’ mood is changing to a more positive one, and the prices prove that more people gain confidence when investing in cryptocurrency.
It’s difficult to predict the prices of cryptocurrency because of its volatility, but many experts believe that crypto will continue growing in value. Growing adoption of crypto across industries and clearer regulations may lead to even more confidence in crypto.
Overall, cryptocurrency still offers amazing profits and other benefits to the world. It is slowly bouncing back after a major crash. While many people decided to give up on investing in crypto, others simply learned their lesson: investors should always monitor the market and the news.
Cryptocurrency is highly volatile, but it could be a good factor for those who want to invest early on when prices are low and gain profit when they increase. If you’re willing to give it a try, always keep an eye on the news. Moreover, use a risk management strategy to avoid heavy losses.