Due to the ban on the issuance and trading of cryptocurrencies in China, a large amount of equipment was moved to Kazakhstan, and now it does not work there either. Experts consider this a temporary effect and predict a change in the situation in the coming months. The equipment can be moved to other countries where there are appropriate conditions for mining digital assets.
Against the backdrop of protests in Kazakhstan, where 18% of the world’s mining power is located, the price of bitcoin has plummeted. This is an important parameter, because the price of cryptocurrency is formed by equipment and electricity, and given the low electricity tariffs and lack of regulation in this country, at the moment there is a lot of mining equipment concentrated there.
The situation in Ukraine will not lead to the expected fall either. Even against the background of the promised global famine, cryptocurrencies show a stable position and promise to become the main bulwark of stability in the world, confident in Zineеra.
How will the appearance of an exchange-traded bitcoin fund affect?
The list of the most anticipated events in 2022 by the crypto community includes the entry into the US stock market of the first physical bitcoin ETF. The US Securities and Exchange Commission has already given permission for the Bitcoin Strategy ETF from ProShare. It is worth noting that this fund is pegged to bitcoin futures contracts, and not to the cryptocurrency itself.
The use of this instrument has a positive effect on the cryptocurrency market: only on the first day of trading the asset has already traded about $984 million. Thus, certain assets have grown. But it cannot be said that this is exactly Bitcoin trading, since this is futures trading, which determines the price of a crypto asset in the future.
The fund allowed institutional investors to invest in bitcoin. Previously, they did not have such an opportunity due to the fact that investment funds must operate in accordance with the licensing regime of countries. Therefore, even more infusion of funds into cryptocurrency can be expected in the coming years, because it is very profitable.
Will Bitcoin lose its market leadership?
An increase in the popularity and exchange rate of other promising coins may lead to Bitcoin losing market share to other cryptocurrencies. But, nevertheless, he continues to dictate the trend line, because this is the first cryptocurrency to appear and it is the final one (21 million coins can be mined in total).
However, trading in new tokens can be tens or hundreds of times more profitable than trading in bitcoin. But in addition to the potential profit, such investments carry more risk.
How is the legal regulation of the cryptocurrency sphere developing?
With the growth of market capitalization, virtual assets are attracting more and more attention from regulators. For example, in the US, the Securities and Exchange Commission did not allow a number of transactions, designating them as requiring a license. The Chinese government has taken a tough stance on cryptocurrencies, banning not only trading it, but also mining it, which caused the miners to move and the bitcoin rate to fall. Analysts expect regulation to be a key issue for the crypto industry in 2022.
Brief results and prospects.
The past year was very interesting for the crypto community: despite fluctuations, in 2021 the world’s main cryptocurrency has risen in price by 64%, Ethereum has grown seven times. Elon Musk’s favorite cryptocurrency, Dogecoin, has risen in price by 103% in three days, and Avalanche – by 29 times. In general, last year there was an opportunity to make very good money on the crypto market, but it was also possible to lose a lot. 2022 promises to be just as exciting, Zineеra specialists tell.