Bitcoin has the highest market capitalization and investment value and is the most valued digital currency. Even though its current price isn’t very appealing, it still remains at the top of the list with more cryptocurrency investors investing in the Bitcoin sphere.
Many cryptocurrency enthusiasts view Bitcoin as an alternative asset to the financial world. They use it to make daily transactions, if necessary. Surprisingly, 2021 will be a significant year in Bitcoin’s history. The year has been for Bitcoin investors taught them that “once a volatile currency, always a volatile currency” is true.
Bitcoin was launched in 2009. It welcomed a new era in blockchain technology and digital currencies. Bitcoin is often associated with the cryptocurrency market. Its highest price was seen in April, when it fell to half its current value. However, crypto investors still believed in bitcoin despite the drop in its price.
The plunge was not a failure. Investors poured more money into bitcoin believing that it will overcome its ‘hard times’ and make a comeback. Bitcoin’s value remains high, despite market trends.
As of May 30, 2021 all bitcoin worldwide had been estimated to be worth US$653million, which is more than Jeff Bezos’ net worth. The cryptocurrency has been moving in the right direction, with major financial institutions and companies authorizing them as valuable assets. Analytics Insight presents Bitcoin’s Year to Date as it relates to market performance, volatility and price oscillation.
The big hits and extreme volatility
Unpredicted price oscillations are part of bitcoin’s daily routine. Throughout its 13-year journey on the digital currency market, bitcoin has experienced such extreme volatility. The sudden rise and fall of the bitcoin price was what changed the course of the recent price swing.
Bitcoin began the year strong, with a high market presence and a high performance. After the dramatic price rise, newcomers and investors in crypto have poured more money into bitcoin.
From the beginning of the year, the cryptocurrency experienced a more than twofold increase in value to reach its record high of US$648,895 by mid-April. Then, it suffered a sudden drop that nearly halved its value. What caused bitcoin to plummet in such a short time? Elon Musk and China’s Government! Elon Musk, tech entrepreneur and CEO of Tesla, shattered its market reputation in April with a tweet.
Musk tweeted that Tesla wouldn’t accept bitcoin payments to purchase their vehicle, citing the environmental disaster caused by digital currency mining.
China was the same. Because of its insane electricity consumption, the Chinese government has prohibited people from mining Bitcoin.
China is responsible for approximately 75% of all bitcoins mined worldwide. It is the largest contributor to the digital currency markets, so the unpredicted ban on bitcoin prices was very harsh. The Bitcoin price is still at US$34,000
Nikolas Panigirtzoglou from JP Morgan says that many investors who have shown interest in Bitcoin thus far have switched to gold or another investment option due to its falling price.
Meme coins are a threat
The cryptocurrency market could be affected by rising controversy about Bitcoin’s decline and the meme coin’s price rise. Dogecoin is a digital currency that was created from memes and jokes.
It has been performing well in the market. Dogecoin is also being considered by many crypto investors as a possible replacement for the plummeting Bitcoin price. Retail investors also piled into digital assets hoping for huge gains. Dogecoin’s value surpassed Ford’s at one point.
In addition, Bitcoin and two other big meme stocks, GameStop Corp. and AMC Entertainment Holding, have also surged in the first quarter.
One thing that helped them to stand strong was their unshakeable price, even after Bitcoin crashed to its lowest point. Since then, the asset has been decoupled. GameStop’s stock price has risen by 1,000% while AMC Entertainment saw a jump of more than 2,500%.
Altcoins outperform Bitcoin
Ethereum is the most popular altcoin. Ethereum, an altcoin that was created from Bitcoin’s complex blockchain technology is the second largest cryptocurrency in the world by market capital.
Altcoins were also affected by the bitcoin effect and experienced some price drops at first, but they have since rebounded. Ethereum’s growth has been a staggering 1,200% in just one year, compared to Bitcoin’s 702%.
Bitcoin is not in control of the digital currency market. If Bitcoin is bullish, the crypto market will also be bullish. However, if it is bearish most of the market will fall with it.
There are exceptions to this trend, but it is the norm for digital currencies. Ethereum, like many altcoins, was on the linear side and escaped the sidewind of Bitcoin’s decline. Ethereum was created to serve as the foundation for a decentralized future internet.