New Sentiments and Trends in the Cryptocurrency Market – A Brief Synopsis

Well, financial researchers and scholars across the globe use intraday data to analyze the effect of Bitcoin news and other cryptocurrencies on the volume, volatility, and returns of the BTC cryptocurrency. In fact, some traditional currencies experience a significant drop in returns after the arrival of negative news, whereas cryptocurrencies like Bitcoin react favorably to both positive and negative news coming from the market. This clearly shows the enthusiasm of investors in Bitcoin. It is definitely a trend that every crypto trader must understand.

On the other hand, news related to crypto exchange cyber-attacks and frauds, produces a spoiling effect, resulting in increased volatility and decreased returns. So, Bitcoin should not only be treated as a currency but as an asset too. Its salient characteristics should be known to investors, so as to properly analyze any news regarding Bitcoin volatility, especially during bubble periods.

Overall Situation of Cryptocurrency in Relation to Forex

Of late, Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) have gained huge attention from investors, merchants, policymakers, and financial consultants, due to their huge price appreciation. Presently, the hot topic regarding the nature of Bitcoin for determining whether this digital currency can be treated as an asset or a medium of transaction for goods & services is being discussed across the globe.

There are some studies that investigate how some high-impacting news in the market related to cryptocurrency, especially Bitcoin in particular and Forex affect volatility, volume, and returns. The study researched six major fiat currencies against the US Dollar (USD), which included the Euro (EUR), British Pound Sterling (GBP), Japanese Yen (JPY), Swiss Franc (CHF), Canadian Dollar (CAD) and Australian Dollar (AUD), apart from Bitcoin (BTC).

Statistics Related to Cryptocurrency

• Cryptocurrency’s overall market capitalization was estimated at $630 USD billion in 2022.
• A financial survey conducted by Forbes Advisor reveals that almost 67% of average investors have money in cryptocurrency.
• Almost 9-11% of the population in the UK and Western Europe have their money invested in cryptocurrency.
• Almost 5 million people in the UK and over double that number in the United States hold some form of crypto assets, and the figures are steadily rising, every single day.
• As per Forbes Advisor, the younger population aged between 18-35 is expected to hold twice as much cryptocurrency than the age group of 35-55 years.
• Bitcoin is the most familiar and purchased cryptocurrency, followed by Ethereum, Dogecoin, and Binance Coin. Whereas, Solana and Cardano rank at the bottom of the list.

Cryptocurrency – The Future Money

When considering a nation like the US and its role in proliferating the use of cryptocurrency and digital wallets, the Biden administration in particular has appointed a professional team to steer the regulation process for cryptocurrency. It is led by the treasury secretary and the chairman of the Securities & Exchange board. With such professional and qualified individuals sitting at the helm of crypto regulations, it can be definitely expected that a workable system or mechanism can be developed for investors, merchants, traders and multinational banks for transactions in cryptocurrencies through digital wallets and crypto exchanges.

In the present times, a majority of retailers accept payments in digital currencies like Bitcoin, Dogecoin, Litecoin, etc. which shows an increased usage of digital currencies, with the blockchain payment gateway system benefitting immensely from the extensive usage and proliferation of cryptocurrencies and related assets. All investors are wary of risks, volatility, and uncertainty. Therefore, a strict regulatory framework in place offers some kind of hope and assurance.

Why Are People Investing in Cryptocurrency?

• It is now made easier by brokers and crypto exchanges to start investing money through an App.
• It is far simpler to understand than conventional investments like SIPs, hedge funds, stocks, shares and mutual funds.
• Investors and global traders strongly rely on the mission statement that supports cryptocurrency.
• All investors have easy access to money when it is put in crypto assets.
• There’s a greater trust factor in cryptocurrency than traditional investments.

An Evolving Cryptocurrency Ecosystem Globally

FYI, a cryptocurrency ecosystem is all about the projects that are built around a particular blockchain system. For example, the Bitcoin ecosystem refers to everything that the developers and programmers have launched on BTC, which includes non-fungible tokens (NFTs), crypto exchanges, and games that employ ‘smart contracts’, indicating the owner of a digital asset. There’s a Solana ecosystem, Cardano ecosystem, and Avalanche ecosystem to name a few. All these cryptocurrencies function on blockchain technology that runs smart contracts.

Volatility in Market Capitalization of Crypto

The estimated market capitalization of cryptocurrency is pegged at around $800 billion USD as of January 2023 and is expected to grow even higher in the days to come. In terms of volume of transactions, Bitcoin alone recorded the highest figure of 200,000 daily transactions on average. As per a recent study, spending on blockchain solutions will be the highest in countries like the United States, followed by China and Europe. It is to be clearly understood that cryptocurrency is the new-age financial revolution, designed to become an alternative for cash in all major economies.

Final Note

The world of cryptocurrencies, encompassing thousands of digital currencies and crypto assets like Bitcoin, Ethereum, Litecoin, Dogecoin, Cardano, Solano, etc. is in a state of constant evolution, with fresh digital assets being introduced every alternate week. These digital currencies have different mission objectives, such as acting as alternatives to fiat currencies/cash and offering low-cost payment processing and peer-to-peer transactions. The entire cryptocurrency trading market is divided, based on the market capitalization of these specific cryptocurrencies and their geographical boundaries, reach, and limitations. The world is also witnessing a growing adoption of blockchain technology, the base for all cryptocurrencies and digital assets, cross-domain and across industry verticals.