History of Bitcoin crises.. Is it thriving again or is it a major hoax?

 History of Bitcoin crises.. Is it thriving again or is it a major hoax?

The value of bitcoin has fallen over the past two days below $ 19 thousand, according to CoinBase.

The first digital currency, in terms of market value, has fallen 60% since hitting its highest level in November.

Within a British Financial Times article

writer David Hindley said that the owners of this cryptocurrency were used to the volatile nature of the industry. 

The paper touched on periods of boom and collapse previously experienced by bitcoin, to see if history repeats itself.

Japan's prosperity and depression

Before 2017

Bitcoin was trading for less than a thousand dollars. But on New Year's Day 2017, the value of this cryptocurrency exceeded the $1,000 threshold and reached $ 20 thousand before the end of the year.

The rush of investors, first in South Korea and then in Japan, was responsible for this boom.

After Japan authorized trading on 11 crypto exchanges in April 2017, the country accounted for about 40% of daily trading activity worldwide. But a period of collapse quickly followed this time of prosperity.

Bitcoin Winter First

Between March 2018 and May 2019, bitcoin traded at less than $ 10 thousand, leading many critics and regulators to question its future.

 For example :

traders and enterprises in London were cautious about dealing with cryptocurrencies, due to fears of fraud, financial crime and other reputational risks.

Sales transactions carried out by bitcoin whales early in 2018 raised concerns about the impact of large investors on the cryptocurrency rate.

 In April 2018, about 1600 bitcoin portfolios contained about a third of all available bitcoins, including about 100 with more than 10 thousand bitcoin.

Cryptocurrency winter deepened with 

the creation of new versions of Bitcoin

The price slumped to its lowest level since the beginning of 2017, but in June of the same year, bitcoin got a positive boost from Facebook when it unveiled the world's largest social media platform.

about its intentions to introduce its own digital currency, Libra.

 Although the Libra plan remained a mere ink on paper, news that Facebook was planning to enter the sector increased confidence in bitcoin's sustainability.

Pandemic Surge

After the first shock of the coronavirus pandemic, bitcoin began to rise again following PayPal's announcement that users would be allowed to keep cryptocurrencies.

 During the lockdown

retail investors began betting on bitcoin's rise. In the course of 6 months, its value has doubled from less than $ 12 thousand to more than $ 63 thousand.

The sharp rise of this market caught the attention of founding investors, and this upward wave culminated with the initial public offering of CoinBase, the largest crypto exchange, which opened with a valuation of nearly $76 billion on Nasdaq in April 2021. 

But the ascent phase did not last long; 

China banned cryptocurrency mining and the use of computers to solve equations to earn cryptocurrencies in September 2021, and the United States and Europe again raised expectations for regulations.

Bitcoin crisis as stock markets fall

Advocates of bitcoin assert that it is a hedge against inflation and volatility in other markets.

In October 2021

the cryptocurrency grew in popularity as ETFs launched, allowing investors to keep track of their prices without holding any bitcoin directly.

Days after ETFs resumed activity, bitcoin reached an all-time high of $ 69 thousand.

What comes next?

Previous bitcoin booms were supported by small investors who entered the market hoping to make a bumper profit over a short time.

 Subsequent collapses occurred when regulators or the broader market expressed concerns about the risks to the sector and raised the concern of bitcoin holders about the methods of disbursing their money.

According to Katie Martin, a Financial Times columnist, bitcoin is "the most speculative asset on the planet, perhaps even the most speculative of all time."

The writer concludes by saying

It remains largely unclear how any regulations in the context of the currency market will succeed in keeping up with the industry's practical realities. 

But if regulators succeed in drafting them, they will help the cryptocurrency industry build more confidence, and perhaps eventually bring some stability.

US economy fears led

Early December 2021 on rising inflation and interest rates in the future to a dramatic drop in the price of bitcoin. 

• Over the following months, bitcoin slumped as U.S.

• tech stocks slumped. When inflation worsened this year

• bitcoin fell further, and last June saw its worst week since 2020.

In an article published by The New York Times

• Paul Krugman wrote that cryptocurrency is a big hoax

• noting that all cryptocurrencies are worthless

• Even using the term "blockchain" is a part of this debate.

In his article published on the website

"American Institute for Economic Research"

(American Institute for Economic Research)

Writer Gerald Dwyer responded to Paul Krugman's article that what happens in the cryptocurrency market reminds him of the housing bubble and the mortgage crisis.

Although investors should be very cautious, their claims are somewhat exaggerated and not the first of their kind on the industry.

The author states that the financial crisis is 2007-2008.

Some government officials have suggested that cryptocurrency assets may pose systemic risks to the economy, which could create problems similar to the financial crisis. 

In addition, cryptocurrencies, like bitcoin, use large amounts of electricity, contributing to the rise in the price of electricity and playing a role in the climate change crisis.

Others suggest

According to the writer, the ban on cryptocurrency assets to fend off all negative market impacts, similar to China that prevented its citizens from mining or owning cryptocurrencies, and the United States can do the same.

The writer wonders:

It is difficult to know what the benefit of these assets will be after 20 years in the future or even earlier, and secondly this comparison reveals that it is wrong to think that current technology will not change, in fact it will change as much and completely as computer technology has. For example

Work is to change the Bitcoin Protocol known as Tabrot to enable it to perform smart contracts.

The writer says

• Smart contracts can automatically execute asset transfers

• and can be used when contracting parties are anonymous

• which is difficult to do without reliable automatic execution

as they are now used in some transactions and new uses are likely to be found in the future.

The writer points out

It is possible to lose money and even life savings invested in cryptocurrencies in the hope of gains, stressing that it is not wise to invest savings in cryptocurrencies, proposing that investment not exceed 1% of invested funds in cryptocurrencies, but instead advising experts to diversify the digital portfolio.