May 13, 2022
Despite being the largest and most important cryptocurrency, Bitcoin is still known for being prone to dramatic surges followed by equally rapid declines. After rising to an all-time high of over $60,000 in April 2021, Bitcoin dropped to just under $30,000 at the end of July. However, instability and crypto go hand-in-hand, and the Bitcoin rollercoaster raced back into the air soon after, with the all-time high reaching over $67,000 in early November.
In early 2022, the yo-yo once again succumbed to gravity, fuelled largely by the political unrest and protests in Kazakhstan and the subsequent internet shutdown. What did the situation in Kazakhstan have to do with Bitcoin? Since China's crackdown on the currency, its neighbour has become the second largest player in the Bitcoin mining landscape, accounting for 18.1 percent of all global computing power used in the activity.
Now, in May 2022, Bitcoin has dropped below $30K again. Reflecting not only the global financial turmoil caused by rising inflation, as investors try to shed "riskier" assets like cryptocurrencies, Bitcoin's latest price drop is also linked to the "stable coin" terra that its $1 clutch breaks and Luna's subsequent collapse. The domino effect this could create, even for established currencies like Bitcoin, is what some analysts are warning could prove a devastating turning point for the market.
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Bitcoin has had its fair share of dramatic swings. The cryptocurrency pioneer's first rise was in 2010, when it rose from $0.0008 to $0.08. Since then, the coin has continued its trend of big jumps and sharp corrections.
Bitcoin's first notable jump was in 2017 when it rose from $974 to $20,000 — a 1,950% increase. This was perhaps the moment when the currency captured the public imagination like never before and began its march to mainstream recognition.
By the end of 2013, BTC quickly reached $1,200 – which was a huge deal at the time. This rise was significantly fuelled by discussion in the US Senate about the "potential to promote more efficient global commerce" regarding cryptocurrencies. China's central bank had also weighed in with cautious approval. But later in December, the approvals were withdrawn and China began banning banks from trading Bitcoin. On December 18, Bitcoin prices halved in one day.
Crypto fans have not forgotten Bitcoin's meteoric rise from $20,000 in December to nearly $65,000 in April 2021. The cryptocurrency was up more than 200% since September. But by the end of May, it was down to about $35,000. However, as usual, it has since made up much of the loss. Where does it go after that?
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Rising demand
A factor that has a really big influence on the crypto prices is Rising demand. Thanks to big online exchanges like the ones you can find in Tradimo’s list of popular cryptocurrency exchanges, the usability has increased dramatically, which is why we have seen a very big increase in the market cap over the last years. Thanks to this rise in popularity and adoption by many companies, more and more governments and countries are trying to find out how they can implement them as well. All of these reasons have been fundamental drivers for the price increase in cryptocurrencies.
Supply and Demand is a big factor that determines the value of anything that can be traded, including all digital currencies in the market. For example, if more people are trying to buy bitcoins, while others are willing to sell them, the price will go up and vice versa. And since the supply of many cryptocurrencies is limited, the increased popularity has been driving up prices.
Final Thoughts
The nature of cryptocurrencies is that they’re highly unpredictable. A cryptocurrency that’s the talk of today may be irrelevant tomorrow. Similarly, a cryptocurrency can rise from obscurity to the hottest thing tomorrow. It’s a roller coaster ride, and crypto enthusiasts live for it.
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About the Creator
Matteo
My life as a freelance writer has been an exciting journey so far. I'm constantly learning and evolving as a writer, never settling for good enough, and always striving to create content that is both impactful and meaningful.
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