The new collapse of Bitcoin

For many years, cryptocurrencies have followed their own logic regarding stock markets and other types of investments. Its price can rise or fall due to internal factors in the Bitcoin community or due to the rules that the state has decided to give to the sector. It has happened several times over the years.

But the sector’s new crash, with bitcoin tumbling below $40,000 (it’s currently traveling at $38,000, down 10% in the past seven days), dragging the entire digital asset sector with it, confirms the trend that’s starting to emerge. In 2021, and then merged in recent months: cryptocurrencies today are an investment asset like any other, they reflect the sentiments of investors, and in particular they seem increasingly to follow the direction of Nasdaq.

Origin among the assets

Cryptocurrencies fear international tensions, such as those in Ukraine or Kazakhstan, respond to central bank monetary policy decisions, respond to inflation, and fear negotiations will fail to avoid a collision at the heart of Europe.

All of these are elements that seem to underpin the process of normalizing crypto as an investment asset. Of course, the risk is still high: the price of cryptocurrency remains extremely volatile and dramatic gains are often followed by dramatic crashes. But the bears and the bulls are following each other in a rhythm that now mirrors that of the stock market.

300 million owners worldwide, 1.3 million in Italy

Currently, cryptocurrencies invest about $2000 billion, of which 41% is due to Bitcoin, 15% is Ethereum, and the rest is divided into 17,460 other cryptocurrencies in existence. It is estimated that there are around 300 million crypto holders in the world, of which 1.3 million are in Italy, according to a report by platform Triple-a. No. has grown significantly in recent years.

Cryptocurrencies are becoming popular. They are present in the portfolios of investment funds, sovereign states, banks and millions of small and medium savers who are attracted by the prospect of cryptocurrency’s bullish rage continuing over time and allowing for significant gains.

2022, the year of bitcoin’s spread

But the same mechanism of “mainstreaming” cryptocurrencies has brought psychology, the mood of the market itself, into the dynamics of value. The winds of war in Ukraine today threaten the stability of the markets, and if the Nasdaq loses 1.5% in the last session of the week, Bitcoin will fall 2% after its trend.

The cryptocurrency investor acts as a technology shareholder: he does not buy listed companies, but it seems that he is destined anyway to stay behind the new developments of the network, such as the Web 3.0 or the metaverse.

And if inflation, rising interest rates, Fed monetary tightening or geopolitical tensions raise questions about long-term investment in technology, cryptocurrencies lose steam as a result. Over the years, investors have begun to learn about cryptocurrencies.

Today they are very popular. The fact that three of the 21 commercials aired on TV during the 2022 Super Bowl in the US were for cryptocurrency exchange services and non-fungible tokens suggests in a plastic way that cryptocurrency is no longer a niche, but rather an investment. Among others, with its specific advantages and risks.

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