Cryptocurrencies like Bitcoin and Ethereum have seen tremendous growth over the past year, with their prices rising and falling in tandem with news events and market sentiment. However, some market analysts believe that cryptocurrencies are not true assets, but rather commodities.
Bitcoin in 20k -24k Resistance Level
Since June 13th of this year, the price of Bitcoin has been volatile, experiencing significant ups and downs. On June 20th, the price reached an all-time high of $21,400, only to fall back below $19,000 just a week later. However, the last month have seen a major recovery, with the price once again climbing above $24,000. Despite this volatility, the overall trend seems to be positive, with the price gradually increasing since early this year. While it is difficult to predict the future of Bitcoin prices, it seems likely that the recent trend will continue in the short-term.
Bitcoin Crash in September 19th 2022
The value of Bitcoin took a tumble on September 19th, falling by over 10% in a matter of hours like also crashed August 19th of 2022. This marks the latest in a string of crashes for the cryptocurrency, which has seen its value fluctuate wildly over the past year. While the reasons for this latest crash are not entirely clear, some experts believe that it may be due to concerns about the upcoming hard fork of the Bitcoin blockchain. This could lead to two competing versions of Bitcoin, which could split the community and reduce confidence in the currency. Whatever the reason for the latest crash, it is clear that Bitcoin remains a volatile asset, and investors should be cautious when buying or selling it.
The Ethereum Merge helped the crisis in Crypto?
The recent crisis in the cryptocurrency markets has been largely attributed to the so-called “Ethereum merge” fork that occurred finally in last Thursday – September 15th.
The fork, which was intended to be a routine update to the Ethereum blockchain, ended up causing a major split in the chain, with the two resulting chains being incompatible with each other.
This led to a mass sell-off of Ethereum and other cryptocurrencies, as investors panic-sold their assets in order to avoid losing money. However, it seems that the worst may now be over, as the two chains have stabilized and begun to trade at somewhat similar prices. While it is too early to say definitively, it seems that the Ethereum merge may have actually helped to stabilize the markets and prevent further losses. Only time will tell if this is truly the case, but for now, it appears that the cryptocurrency markets have weathered this latest storm.
Why Ethereum proof-of-stake was a success but the bitcoin and Ethereum prices are dip?
One of the key reasons for Ethereum’s success has been its Proof-of-Stake (PoS) algorithm. Unlike Bitcoin’s energy intensive Proof-of-Work (PoW) algorithm, PoS allows users to validate blocks and earn rewards without expending large amounts of electricity. This has led to a more decentralized and environmentally friendly network, which is one of the core tenets of Ethereum’s philosophy. The recent dip in prices could be attributed to a variety of factors, including the ongoing bear market, regulation concerns and the ending of the ICO boom. However, the long-term prospects for both Ethereum and Bitcoin remain bright, as they are both well-established cryptocurrencies with strong communities and talented developers. While prices may fluctuate in the short term, the underlying technology of both cryptocurrencies is sound and will continue to innovate and evolve. As such, Ethereum proof-of-stake remains a success story, despite the current dip in prices.
Is Market See Cryptocurrencies as Commodities?
Cryptocurrencies like Bitcoin and Ethereum have seen tremendous growth over the past year, with their prices rising and falling in tandem with news events and market sentiment. However, some market analysts believe that cryptocurrencies are not true assets, but rather commodities. This is because they do not generate any income or dividends, and their only value lies in their price.
As such, market fluctuations can have a large impact on their prices. For investors, this means that cryptocurrencies are high-risk investments, and they should only allocate a small portion of their portfolio to these assets. However, for those who are willing to take on the risk, cryptocurrencies can still offer the potential for high returns.
And that’s why the Technical Issue like was the Ethereum Merge didn’t influence the crypto prices.
The Crypto is influenced by Ukraine War, by World Climate Change, in other words by issues more bigger than a “simple” technical Merge. Like it was by Covid-19 Pandemic.
There are a variety of reasons why commodities prices can vary. Some of the most common reasons include supply and demand, weather conditions, geopolitical factors, and speculation.
- Supply and demand is perhaps the most straightforward reason for price variation. When there is more demand for a commodity than there is available supply, prices will rise. On the other hand, if there is more supply than there is demand, prices will fall. This basic economic principle has a major impact on commodity prices.
- Weather conditions can also lead to price fluctuations. For example, droughts can reduce crop yields, leading to higher prices for agricultural commodities. Similarly, extreme cold or heat can disrupt energy production, resulting in higher prices for crude oil and natural gas. In general, any type of extreme weather event can have an impact on commodity prices.
- Geopolitical factors can also lead to price swings. For instance, tensions between two countries can lead to trade disruptions and lower demand for commodities exported by those countries. Alternatively, if a major producer of a commodity decreases output, prices will tends to rise. In short, any type of political or economic uncertainty can lead to volatility in commodity markets.
Finally, speculation can also play a role in price variation. When investors believe that prices will go up in the future, they may buy commodities as a way to profit from rising prices. This increased demand can cause prices to increase even further. Conversely, if investors believe that prices will fall in the future, they may sell commodities in order to avoid losses. This reduced demand can cause prices to decline even further. In short, speculation can magnify both upward and downward price movements in commodity markets.
Conclusion
Just a few years ago, cryptocurrencies were the preserve of a small group of early adopters. Today, they are a mainstream investment, with leading financial institutions all over the world offering products and services related to digital currencies. This is a remarkable turnaround, and it is largely due to the fact that cryptocurrencies have established themselves as a commodity. Like other commodities, such as gold and oil, cryptocurrencies are seen as a safe haven by investors looking to protect their portfolios from market volatility. They are also attractive to those who want to hedge against inflation. As a result, the demand for cryptocurrencies is likely to continue to grow in the years ahead.
