This year was a big one for the crypto market. As of mid-November 2021, the 6 most expensive virtual currencies around the world had market caps between $66.4 billion and $1.2 trillion. Cryptocurrencies have been hot topics not only in the financial world, but also in the general public this year, making news for many different reasons.
Five years ago, your Bitcoin was worth about $700, but in early November of 2020 it had shot up to $68,530.34, while Ethereum had hit $4.837.59. One reason for the uptick in crypto interest is that some people tend to view it as an insulator against inflation, in the same way that traders have traditionally viewed gold.
“While gold has slid throughout the year, Bitcoin and Ethereum have more than doubled,” explained Wilfred Daye of Securitize Capital. Let’s take a tour around the globe and see how cryptos are poised to meet 2022, from the situation with China and crypto currencies to the latest news about the 6 most expensive virtual currencies around the world.
China and crypto currencies
China and crypto currencies are two terms President Xi would rather you didn’t say in one breath, and he made this amply clear this year. In May, he forbade payment companies and financial institutions from providing crypto services of any kind, (2013 and 2017 were years in which China made similar laws). But that was nothing compared with what he did in September, banning mining altogether.
“In the history of crypto market regulation in China, this is the most direct, most comprehensive regulatory framework involving the largest number of ministries,” said Winston Ma of NYU Law School, referring to the all-encompassing ban on all crypto transactions and mining, the consequence of which would see all electricity cut off.
The People’s Bank of China was concerned that Bitcoin speculation undermined “economic, financial and social order,” and the move sent Bitcoin’s value down by 9%, (in May it was 30%). As to mining, the government’s concern has been the environmental toll of the practice.
In terms of long-term effects of the regulations in China and crypto currencies, Craig Erlam of OANDA, for one, is not overly worried because “China’s actions haven’t held back cryptos’ rise too much in the past.”
El Salvador
In June, El Salvador’s President Nayib Bukele’s made a historic move when he adopted Bitcoin as legal tender. One thing that seemed to motivate the unusual move was the saving in commissions paid by Salvadorans abroad for sending money home. These transfers brought $6 billion into the country in 2019, which amounts to 1/5th of its GDP.
Aside from this, “It will bring financial inclusion, investment, tourism, innovation and economic development for our country,” tweeted the young president. His approach has been direct and proactive, even ordering LaGeo (the state-owned electrical company) to figure out how to use the land’s volcanoes as a renewable energy source for Bitcoin mining.
The country is still in the early stages of the experiment, so “Whether this becomes a trend and then snowballs, or whether this will be a blip, we will only know through history,” said Brandon Thomas of Grayline Group.
Bitcoin ETFs
The ProShares Bitcoin Strategy ETF, which debuted in October, does not directly invest in Bitcoin but rather manages Bitcoin futures contracts for its clients. When it was a month old, its assets amounted to $1.26 billion and its share value was up by 10.95%.
One thing traders have been wondering about is when the US will approve the first spot Bitcoin ETF that directly holds the cryptocurrency. Analysts suspect it may appear in mid-year 2022, which is the same time the Grayscale Bitcoin Trust is set to change into a Bitcoin spot ETF.
Bitcoin’s future
We know that experts’ predictions aren’t to be taken as promises, but by the end of 2022, Mark Palmer of BTIG estimates a Bitcoin will be worth $95,000. And, at some point in the future, JP Morgan believes the mark of $146,000 will be reached. Look out for the progress of the Bitcoin ETFs that already exist and those that will undoubtedly follow.
Invest in crypto currencies with iFOREX as CFDs
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Before you start to invest in crypto currencies with iFOREX as CFDs, take advantage of the brand’s well-known PDF guides, video tutorials, and one-on-one training to sharpen up your trading strategy. And keep in touch with all crypto news, whether it be about China and crypto currencies, El Salvador, or ETF developments.
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