Cryptotals in the last 5 years have a story to tell, and it is not rosy
Cryptocurrency has been one of the most talked about investment instruments for millennials and Gen Z. Over the past five years, digital tokens have multiplied investor wealth. Lately, these tokens have been under enormous sales pressure due to unstable macro indicators. A stricter regulatory position is also attributed to the Reserve Bank of India (RBI). The once cheerful investors can now be seen venting their dissatisfaction on social media platforms.
Tracking of cryptocurrencies over the last five years
As of July 7, 2022, Bitcoin traded at $ 20,528. Compared to this, July 7, 2017, the price of Bitcoin was close to $ 2,500. This shows an eightfold increase in the price of the token. However, the image may not be as black and white. Since peaking at $ 67,566 in November 2021, the largest cryptocurrency has seen market value erode by around $ 880 billion or nearly 70 percent of investors’ wealth.
Ethereum traded at $ 245.99 on July 7, 2017. The second largest digital token by market value peaked at $ 4800 on November 8, 2021. Today it trades at $ 1182.40.
A similar story can be seen in BNB, which debuted in July 2017. From the price of 0.11 dollars, BNB rose to 675.68 dollars in May 2021 and then again to 654.32 dollars in November 2021. On 7 July 2022 it was however, traded at $ 237.57. , over 60 percent below the all-time high.
The XRP traded at $ 0.2550 on July 7, 2017. It rose to $ 3.3778, a record high in January 2018, but fell below $ 0.30 by September 2018. It took three years to surpass the $ 1 mark. In April 2021, it reached $ 1.83
Dogecoin, which reportedly has Elon Musk as one of its major investors, rose from $ 0.00244 in July 2017 to $ 0.6848 in May 2021. It is currently trading at $ 0.06869.
What do the numbers tell us?
The market data indicate that almost all the major cryptocurrencies reached a record high sometime in 2021 and have fallen since then. It has been months now since the crypto investors enjoyed significant gains. The situation is tougher for investors who entered the crypto market in early 2021.
Why do cryptocurrencies fall?
The fall has no particular reason. The Indian government and RBI have not been involved in cryptocurrency for several years. RBI introduced a direct ban on “private cryptocurrencies” in 2018. The Supreme Court of India later lifted the ban in 2020.
In his budget speech, Finance Minister Nirmala Sitharaman introduced a tax of 30 percent on the gain on the transfer of all cryptocurrencies. She also announced a 1 percent TDS on the transfer of digital tokens. The rule came into force on 1 July 2022.
Apart from this, inflation worldwide has increased. The ongoing war between Russia and Ukraine has exacerbated the situation. Several countries have hit high inflation levels over several years. To control this, central banks have begun to raise interest rates to absorb liquidity in the market. This has also sucked money out of the crypto markets.
Governments have also been concerned about the potential use of cryptocurrencies by terrorist organizations and hackers. Although predicting the future is a dangerous business, it looks bleak for cryptocurrencies.
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