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Crypto’s tumultuous start to the year

Blockchain continues to be a hot topic every day and not without reason. Here is what’s new this week:

2022 started on a tumultuous note for blockchain with Bitcoin wobbling while the market grew. Know how metaverse, blockchain gaming, and crypto trends are calling shots in the cryptoverse.

Market Updates

The crypto giant, Bitcoin, falters its way into 2022 as the crypto market grows.

Christmas had good news in store for crypto and stock markets, with the S&P 500 sustaining momentum and going up about 5% since December 20. But Christmas was not so festive for Bitcoin, BTC gave up gains, and the total crypto market settled to around $2.3 trillion, dropping drastically from November’s $3 trillion high. However, the cap settled on about 300% higher than a year ago.

Regardless, it is not as bad as it appears — we have the crypto developments to be optimistic about,

The $45,000 of Bitcoin looks pretty problematic, doesn’t it? But when you focus on the big picture, it all looks more promising. Hashrate, the mining power of the network, continues to break records, with an increasing number of miners joining in North America after China’s 2021 crypto crackdown. Marathon Digital Holdings, a US mining firm, spent around $900 million on mining rigs. BTC holders also record numbers of nearly 40 million.

Ethereum also reached the record 71 million addresses driven by NFTs and DeFi. The NFT boom continued well into the new year, with OpenSea experiencing its third best day ever with around $243 million worth of trading on January 2. Active traders of OpenSea reached a record high of 362,000 in December. South Korean presidential candidate, too, started using NFTs to fundraise his campaign.

All these factors contributed to the rise in Ethereum’s fees and aided Polygon and Solana’s rise. The Ethereum sidechain, polygon, became a popular alternative for OpenSea users with $76 million in December. Solana, also an ETH alternative, offers lower fees, leading to its record high of 1.8 million users for its Phantom wallet last month.

Inflation continues to impact the global economy, but what does it mean for crypto? Turkey hit 36% inflation last year and is now looking to debate a new law to set up an official crypto custodian. Talking of Australia, the Sydney Morning Herald, a traditionally conservative pension fund, recently told its 1.8 million members that crypto is a good investment against rising inflation. Major banks are offering crypto trading to retail customers in Italy and Spain.

Bitcoin accounted for about 70% of all crypto last year, in stark contrast to the current 40%. Now, this stat could mean that BTC has slumped, but it still holds $870 billion worth of market. Instead, what has happened is alternative blockchains from Avalanche and Luna have emerged. Other than that, new crypto opportunities like Bored Ape Yacht Club, play-to-earn games like DeFi Kingdoms, and Web3 projects like the cloud storage protocol have also attracted investors.