BTC is used as the native currency on the Bitcoin network. BTC can be used for peer-to-peer payments and store of value on the Bitcoin network. Bitcoin is also used to pay transaction fees. Keeps the decentralization of Bitcoin, with its small limited block sizes and low on-chain bandwidth, using off-chain payment channels to increase scalability. It is in this respect that Bitcoin acts as a payments settlement network.
Throughout its life, Bitcoin has primarily served as a digital currency for online marketplaces, settlement for the transfer of value between Bitcoin exchanges, a capital-raising mechanism for new cryptocurrency projects, a complementary asset for lending products, and a speculative store of value.
Bitcoin at 2018-2019
After peaking in December 2017, Bitcoin, along with the rest of the cryptocurrency market, crashed in January 2018, sending the cryptocurrency market into its latest bear market. Bitcoin has since dropped to $3,200, over 80% below its ATH. However, while prices have yet to recover to their 2017 highs, the institutionalization of Bitcoin has accelerated significantly. Traditional Wall Street institutions including the Chicago Mercantile Exchange, the Intercontinental Exchange and Fidelity have launched cryptocurrency offerings, opening up the market to institutional investors. There are currently several regulated exchanges and custodians. In addition, regulatory clarity around Bitcoin improved significantly after SEC Chairman Jay Clayton revealed that at a congressional hearing in February 2018, the SEC does not consider Bitcoin a security.
Since hitting its cycle low in February 2019, Bitcoin’s price has rebounded significantly, rising to $13,000 in June. Following the recent announcements of Facebook’s Libra project and the digital currency of the Central Bank of China, governments and multinational corporations around the world have begun to take cryptocurrencies more seriously. U.S. officials are debating a digital dollar, and lawmakers around the world are considering options for using a central bank digital currency (CBDC). In addition, since the announcement of Libra, there have been many hearings related to the cryptocurrency. China recently announced Blockchain as a revolutionary technology and will make blockchain technology a strategic imperative for the country. The price of bitcoin rose over 40% after the announcement, marking the highest intraday movement since 2011.
Also on April 28, 2018, SEC Chairman Jay Clayton announced that the SEC does not consider bitcoin (BTC) a security.
“This is a difficult area. Because, as you said, there are different types of crypto assets. Let me try to divide them into two areas. The pure medium of exchange that is most often mentioned is bitcoin. As a substitute for currency, which, according to most people, is not a security. Then there are tokens that are used to fund projects. I have been officially stated that there are very few tokens that are not securities, and I have not seen them. To the extent that something is a security, we must regulate it as a security and our securities regulations are based on disclosure and people must follow them and provide the information we need.”
32nd Chairman of the Securities and Exchange Commission.
According to the Crypto Rating Council (CRC) Securities System Asset Rating, Bitcoin received a score of 1 out of 5 and provided the following summary:
Lack of token sale and related marketing efforts.
Decentralized development and use
Anonymity of the project team
Bitcoin at 2020-2021
Bitcoin traded sideways in 2020, but with the onset of the novel coronavirus (COVID-19) pandemic, global markets experienced their biggest decline since the 2007-08 mortgage crisis. Bitcoin has not escaped the fall – in less than 48 hours, it lost half of its value, dropping below $4,000 for the first time since March 2019. Luckily for bitcoiners, bitcoin has bounced back to its pre-pandemic price in less than a month. .
Bitcoin’s rise after the March turmoil has attracted wider media and institutional attention and increased credibility for its story of value.Although Ethereum remained around $10,000 during the hot DeFi summer, Bitcoin will start to rise by the fall, with Bitcoin hitting $14,000 by early November. Whether it was the Federal Reserve’s unprecedented level of money printing, its V-shaped recovery in April, or direct stimulus payments to millions of Americans, it was clear that bitcoin had topped $14,000 as it first made a new peak over $20,000 on December 16, 2020. It reached $28,000 two weeks later. Then, on January 8, 2021, Bitcoin hit a new all-time high of $41,429.38. Since hitting $41,000, Bitcoin has basically gone down to $30,000.
The price of bitcoin is not the only thing that has risen rapidly in 2020. Institutional adoption took off. Led by Paul Tudor Jones of Microstrategy (worth over $1 billion), corporations have joined the bitcoin world en masse. From insurance companies like MassMutual ($100 million) to investment companies like Ruffer ($744 million). And corporations are not alone—entrepreneurs like Elon Musk and politicians like Miami Mayor Francis Suarez are increasingly pushing for bitcoin. Even athletes have joined the space, for example NFL player Russell Okung partnered with Bitcoin Lightning Company Zap, and became the first professional sports player to ever be paid with bitcoin.
Bitcoin at 2022
The current year is perhaps the most record-breaking series of failures of the flagship cryptocurrency that we have seen on the market. By May 30, 9 weeks of Bitcoin depreciation had passed.
At the same time, on May 30, everything looked quite ambitious. Bitcoin surged to $30,885 before falling back to $30,640, where it is now. This is the third consecutive promotion session. So far, however, it is too early to draw far-reaching conclusions – all these movements completely fit into the sideways trend of $28,500-30,500. Without fixing above $31,500-31,700, it is premature to talk about the preponderance of the number of “bulls”.
It is interesting that right now the correlation between the Nasdaq index and the bitcoin rate has disappeared. If for the cryptocurrency the past week was a continuation of the fall, then the US stock market technology index showed its best weekly result since November 2020.
The fundamental background, therefore, for bitcoin seems to be mixed. On the one hand, there are no important news that could provoke demand for cryptocurrency. On the other hand, a break in the correlation with US exchanges may signal a decrease in the emotional component, then cryptocurrencies could move in their own direction and not look back at exchange volatility. At the same time, the share of BTC in the cryptocurrency market rose to 46% over the week from 44% earlier. This is a good signal.
Cryptocurrency continues to experience difficult times. The BTC rate on Wednesday, June 22, is trading at $20,137 and looks rather weak.
Technical analysis leaves a chance for a decline to $20,000 if selling deepens. We are currently monitoring this area. There may be options further: for example, with a stop at $17,500, so that the “bears” can gain strength before the road to $10,000-11,000. Or, in the absence of an obvious negative, consolidation in the range of $20,000-22,000.
The fundamental background is currently developing in favor of sellers, namely:
BTC is correlated with the movement of the US S&P 500 and Nasdaq indices, and they are not doing very well;
Exchange “whales” at least do not increase their positions in BTC;
There is currently no domestic news capable of developing purchases.
Given the fact that the BTC rate is very sensitive to comments about the likelihood of a recession in the US economy, today it is worth paying special attention to the evening speech of the head of the Federal Reserve Jerome Powell. Increase in volatility is possible if the monetary policymaker focuses on the prerequisites for a decline in GDP.