The global economic recovery came to a halt succeeded by falling valuations across stock markets. And while big tech corporations took a significant beating by as much as 8%, the descent was much deeper in the realm of cryptocurrencies. But, despite a 12.5% drop, the recent surge in Bitcoin valuations is being seen by experts as a beginning to the end of the ongoing crypto winter.
Crypto Winter: Is the Hype Real??
There were speculations of Bitcoin hitting the coveted $100,000 mark during the year-end. That may have failed to live up to expectations, but Bitcoin is not the only cryptocurrency, and neither is the crypto trading market based solely on it. Digital assets based upon virtual platforms returned strong gains. And, a significant number of them are associated with gaming and upcoming blockchain innovations like the metaverse.
Crypto tokens such as Axie, Gala, and Mana have displayed strong gains. Axie, used in the Axie Infinity gaming platform, grew by 35% while the Mana token in the Decentraland metaverse hiked 57%. The valuation of the cryptocurrency used in the Gala gaming platform also leaped 125%. Though a fraction of market-leading Bitcoin, the combined market value of the aforementioned assets is approximately $12.7 billion.
In addition, cryptocurrencies based on layer-1 blockchain solutions are also exhibiting significant growth, owing to the rising metaverse craze. The notable movers include Ether, Solana, and Polkadot.
Also Read : Turkey to Set up Committee for Analysis of Metaverse and Crypto
Trends in Bitcoin Prices
Bitcoin’s current rally does not negate the fact that its valuation fell 40% since reaching an all-time high of USD 67,734 in November 2021. If we consider previous bubble patterns, it is easy to observe that its valuations fell sharply each time.
The first peak had Bitcoin decreasing 84% from $1137 to $183 within a year, between November 2013 and January 2015. Bitcoin scaled $19,041 during December 2017. Once again, it decreased 83% dropping to $3204. Judging by this pattern, an 83% drop will equate to a valuation of $11,515. This time, however, there are several additional factors.
Also Read : The Top 5 Crypto Trends for 2022
Predictions
Compared to the previous price drops, Bitcoin has a much larger market capitalization and presence. Bitcoin has surpassed PayPal in transactions, trailing behind only legacy payment processing services like MasterCard and Visa.
Global banking and finance powerhouses are utilizing crypto’s underlying blockchain architecture leading to a digital transformation in the existing BFSI sector. Hedge fund investments, banks, sovereign wealth funds, and even certain pension funds are pooling their resources and making investments across bitcoin. Nations like El Salvador have taken things up several notches higher allowing bitcoin to be used as legal tender and investing billions of dollars in Bitcoin.
Final Words
Contrary to popular trends, the bear trends in the crypto markets would not be staying for long. Bitcoin is in a much better position of relevance compared to before. And investors can opt for alt-token options working on futuristic innovations. During the course of the ongoing crypto winter, traders should focus on avoiding tactics deemed conventionally risky like shorting and focus on the long-term.
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