Large holders are increasing volumes
In early November, “whales” purchased an additional 43,000 BTC worth $2.8 billion. The assets were acquired within 5 days. Thus, the increase in volumes at the addresses of large wallets had a positive impact on the Bitcoin chart.
In just one night, the price of the digital coin increased by $3.5 thousand. As a result, over the course of a month, owners of wallets containing more than 10 thousand BTC purchased 93 thousand coins.
After a long portfolio build-up, large investors switched to profit-taking. First of all, let's figure out how this will affect the market.
Whales are putting pressure on Bitcoin
This year, BTC reached new historical values. The price of one coin was fixed at $65–69 thousand. On this wave, many expected that the height of $100,000 would be “conquered” by the end of December. But large asset holders decided otherwise.
Currently, Bitcoin is trading around $57-58 thousand and is moving sideways. 8848 Invest analyst Viktor Pershikov said that the trend will continue until the end of the year. In addition, he predicted a price reduction to $53 thousand.
First of all, the “whales” are putting pressure on the exchange rate. They have been taking profits for several weeks now. But the market continues to maintain a positive mood. At the same time, demand exceeds supply.
Still, the holidays are a period when retail investors begin to partially dump their assets. According to analysts, one should not expect a strong fall, but excess profits are also practically excluded.
Controversial law
Earlier, in October, Deputy Minister of Finance Alexey Moiseev said that the government does not intend to change anything in the existing approach to regulating cryptocurrencies. The ban on crypto payments in Russia, according to the official, will remain. At the same time, you can carry out transactions through electronic wallets outside the Russian Federation. “I think it will remain that way for now,” Moiseev noted.
Since January 1, 2022, the Law “On Financial Digital Assets” has been in force in Russia. The document recognizes cryptocurrencies as property, but prohibits payments with them. The law is often criticized. For example, experts from Moscow Digital School (MDS) note that it introduces new terms instead of those that are well-established in world practice. This creates uncertainty.
In addition, the document is filled with contradictions. According to the definition given in the law on digital financial assets, cryptocurrency is recognized as a means of payment and can be an instrument for investment, MDS lawyers point out. But in accordance with Article 14 of the law, legal entities and individuals do not have the right to accept it for payment. In general, experts believe, the authors of the law have failed to develop an adequate definition of digital currency.
Aaron Chomsky calls the digital asset law a pointless misunderstanding. In his opinion, the cryptosphere needs a new legislative framework. “It is necessary to describe in detail the definitions of exchangers, stock exchanges and mining, and then begin to implement the requirements,” he concludes.
When the pyramid collapses
The fall of Bitcoin today is not news, since almost every day there is a rapid rise and then a decline in the rate. In a large number of ways, cryptocurrency is similar to a financial pyramid, which will collapse anyway. Investors who invested in the business at the very beginning will receive greater profits. Due to low profit growth, buying Bitcoin is becoming increasingly risky.
The bet is placed on 208-2021. The reason will be a whole mix of threatening factors. The government of most countries will begin to clamp down on uncontrolled money, and competitors will create something more profitable that will block Bitcoin, and everyone will forget about it. Most likely, in a number of countries, the release of official cryptocurrency will begin, which will be the main reason for Bitcoin to disappear into oblivion.
You must not miss a new outbreak and try to wisely manage what you already have.
What will change after the adoption of a new law in America
Financial expert and analyst Ivan Samoilenko said that a new law recently adopted in America obliges everyone associated with the cryptocurrency market to provide personal data. At the moment, the US Treasury has not specified all the features of the new work, therefore, the miners have suspended their activities for now.
Experts believe that until everything that is happening returns to normal, investors will be wary of contributing their financial resources to the development of the cryptocurrency market. To date, it is unknown whether America will continue to tighten the rules for working with cryptocurrency. Who knows, perhaps soon miners will have to find another country in which they could work normally.
The value of Bitcoin as a technology and as a currency
Blockchain technology
Some people manage to criticize Bitcoin for its technological uselessness, arguing that the blockchain is just a modified database. They also focus on the fact that the operation of this system is ensured by participants whose computer equipment carries out mathematical calculations that no one needs, for which they actually receive a reward in the form of bitcoins.
However, if you pay attention to the costs of purchasing mining equipment and paying for the electricity necessary for its operation, an obvious factor immediately catches your eye - if people massively spend real money to get virtual money, then they see a certain value in it. And this value grows in proportion to the number of participants joining the Bitcoin network.
Additionally, despite Bitcoin's slowness compared to more modern cryptocurrency projects, it continues to be a major digital asset used for storing and transferring funds.
His dominance in the crypto market rarely falls below 50%, which means he is the most trusted. Behind the trust in Bitcoin is also the, albeit virtual, but still revolutionary blockchain technology, which is already quite actively used in many industries in the real world.
Therefore, for the price of Bitcoin to collapse to zero, something drastic must happen, for example, the inclusion of quantum computers in the game, horror stories about which have been fed to the crypto community for several years now.
In theory, such devices could actually destroy the existing mining industry and be able to easily hack the private keys of crypto wallets, seriously undermining the level of trust in the security of the Bitcoin network. True, most likely, by then Bitcoin developers will be able to come up with protective measures taking into account the emergence of new computing technologies.
Our video will help you better understand the technical side of Bitcoin:
Bitcoin technologies
Forbidden Crypt
The Bank of Russia intends to ban investments in crypto. This was reported by Reuters, citing two knowledgeable sources. The rationale for the ban is the growing risks to financial stability due to the increasing number of digital money transactions. One of the agency’s interlocutors noted that the Central Bank has taken a tough position and advocates a complete rejection of all cryptocurrencies. According to another source, the Central Bank is currently discussing the ban with market participants and experts. If such a decision is supported by legislators, the ban will affect new transactions with crypto. The restrictions will not apply to virtual currency already purchased.
The Bank of Russia is now preparing a consultative report, a representative of the regulator said in an interview with Reuters. It will voice the position of the Central Bank on this issue, he added and did not give details.
Ticket to Dubai
Probably, the rumors about the ban on cryptocurrencies are a test of public opinion, and the final position of the regulator will be more reasonable, admits IT expert Daniil Shepovalov. “But there is little hope. The consequences of the bans are predictable,” he notes. According to him, if cryptocurrencies are banned in Russia, specialists in the field of decentralized finance or crypto-art will look at “all this” with longing and go to “the conditional Dubai.” At the same time, the expert continues, Moscow could be made an attractive crypto center. To do this, it is necessary to create infrastructure and introduce standards for investor protection.
Prohibited mining: what awaits Bitcoin in the near future
Chomsky also speaks about the problem of the outflow of specialists abroad. He notes that immigrants from Russia are represented in a huge number of top crypto projects, and restrictions will lead to “mass migration of talented people.”
Instead of prohibitions, the expert advocates partnership. So, Chinese miners moved to Russia. They could bring real revenue to the budget if this process is formalized properly. And large cryptocurrency exchanges are ready to cooperate with the authorities in order to maintain the opportunity to earn money - conflicts with the state are simply unprofitable for them. “Thus, the decision to ban cryptocurrencies appears irrational. And blocking will lead to a complete withdrawal of market participants from the supervision of regulators through the use of VPNs and other mechanisms,” Chomsky predicts.
Why did Bitcoin collapse today?
What caused the rapid decline? The stability of cryptocurrency is due to the fact that it enjoys fairly high supply and demand in the financial market. Recently, users have started mining solely to sell. On all exchanges, without exception, the following picture is observed: the number of offers for sale exceeds the number of buyers.
Bets began to appear that led to futures sunsets, i.e., the sale of cryptocurrency at a low cost. This is the main predisposing factor for the sharp collapse of the exchange rate. Some traders try to take bitcoins at any price so as not to lose part of their profit. They understand this, so they don’t give up at the first fall.
Until only those Bitcoin owners who know a lot about this matter remain on the market, the rate will go down and up. Stability is not predicted.
Expert forecasts
The fall in the Bitcoin rate suggests that the complete collapse of this cryptocurrency is inevitable. Despite this, it is impossible to determine the exact date of the collapse in the financial market. Predictions show that Bitcoin will collapse in 2022.
In order to support cryptocurrency, which is beneficial to all investors without exception, it is recommended to adhere to the following recommendations during crisis situations:
If a cryptocurrency falls, even for a long period of time, you should not panic. At least 30 percent of assets must remain on hand. Even if it seems that Bitcoin will collapse soon, play it safe so that if the rate rises, you will not be left with nothing.
Already on December 23 there will be a division of the most popular cryptocurrency. The miscarriage of Bitcoin will be called Lightning Bitcoin. This idea was supported by all BTC exchanges. The current version of the cryptocurrency, according to most, will be the most secure and fastest version.
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Mining will be carried out using the CPU.
Additional Information
The growth of the rate depends on several criteria. Even inexperienced cryptocurrency users can make a competent forecast on their own. To do this, you need to study the exchange: if there are fewer sell orders, and more requests to buy appear, then the rate will rise, which is due to the fact that buyers begin to increase their rates.
Even the most experienced expert will not make an accurate forecast. We need to wait for the moment when alarmists leave the market, who, with a slight decrease in rates, begin to sell off their entire stock for pennies. Only after market stagnation can we talk about any stability. Bitcoin growth is possible up to 20 thousand. That is, already in February 2022.
According to experts, Bitcoin is a pyramid that will collapse. It has become almost impossible to mine without losses. Cryptocurrency in the financial market is not backed by anything, so such money has no value without demand.
