After BTC, ETH is the second most consolidated cryptocurrency, although it has marked differences with respect to the cryptoactive created by Satoshi Nakamoto
2021 will be remembered as the year of cryptocurrencies thanks to the extraordinary figures reached by these digital assets in the last twelve months. It’s that on January 1, the total market capitalization was u $ s766,678 million and a few days after the end of December this value tripled and reached US $ 2.37 billion.
While the Bitcoin It is the most popular token, as it is the first in the saga and in turn the one with the highest market capitalization, Ether (ETH) She was decorated as the winner of this 2021 shortly after finishing, according to most analysts.
But why do they claim this? It is that the second largest cryptocurrency drastically outperformed its most volatile rival during the year in terms of percentage growth, a trend that could continue in 2022.
The token belonging to the network Ethereum had a year-on-year growth close to 450%, while that of BTC, which reached u $ s68,500 valuation record, closes the year approximately in 60%.
Ether, the token belonging to the Ethereum network, had a year-on-year growth of close to 450% in 2021
The most notable gains this year were on the side of Vitalik Buterin, creator of the network and the token, since its system profited abruptly this year from a number of causes such as: the adoption of blockchain technology by financial technology companies, or the popularity of tokens no fungibles (NFT) in the world of art and games.
Also, to a great extent, the recent updates of the network influenced, highlighting the 2.0 and the EIP-1559, which adjusted gas rates and introduced a mechanism that burns part of the base rates collected.
When measuring the superior performance of ether over Bitcoin, considering volatility, it is observed that its value increased to levels last seen in the summer period of 2018.
A crazy 2021 for crypto
The volatility linked to the US presidential elections gave the market a boost, then accelerated after the arrival of the first COVID-19 vaccines in late 2020. For a time, Bitcoin showed a positive correlation with the S&P 500 index, the emerging market stocks and even commodities as a measure of inflation. But then, after reaching a 110% yield in just five months, his momentum stalled.
While it appeared that the correction was over for Bitcoin after repeated declines during December, its value failed to settle with the u $ s50,000 as floor, and this December 28 it fell back, along with the main cryptos.
For example, Ether, collapsed more than 6%, while others like Cardano (ADA) The Dogecoin (DOGE) fell 8%, and Solana (SOL) Y Polkadot (DOT) were the ones that suffered the most with falls of up to 10%, according to CoinMarketCap.
Bitcoin’s crash dragged the crypto market across the board, with drops of as much as 10% in some
Even so, 2021 will be remembered as the best year for cryptocurrencies yet, in general, ‘with space’blockchain” attracting a significant amount of capital thanks to the launch of exchange-traded funds (ETFs) and increased awareness among investors“, according to the analyst Naeem Aslam.
“Many traders made life-changing profits in 2021 and have been waiting to take profits until after the turn of the year to delay tax payments until 2023“, he assured for his part Sergio Silva, Fireblocks Sales Director. “That is another source of selling pressure that could turn into a cascade of further weakness in January,” he added.
The balance of the year
2021 started with a first term at full speed and thanks to the boom in the market, cryptocurrencies reached u $ s1.83 billion, which represented a rebound in its capitalization from 139% in the period.
That figure was pulverized in the next three months – by the hand of one of the historical peaks of Bitcoin– and a maximum of $ 2.57 billion on May 12.
The second quarter of 2021 was characterized as Bitcoin’s most bullish rally yet
But collapse in the prices after the blows of Tesla Y China they caused the market, by June 30, to fall to $ 1.43 trillion.
The third quarter was a boom for cryptocurrencies, despite a moderate dip in September, and the total market value rebounded to u $ s1.9 trillion.
In the last quarter of the year, the cryptocurrency market saw numerous tokens break their historical records, which allowed it, despite the irregular behavior in December, to reach US $ 2.37 trillion.
JP Morgan’s projection on Bitcoin in 2022
The American Investment Bank JP Morgan published a recent report where it provides an analysis of the current panorama of cryptocurrencies and also projects the price of bitcoin for the next few months.
According to the report released by the entity to its clients, alternative assets, which include cryptocurrencies, “should continue to perform phenomenally in 2022.”
On this occasion, unlike what happened in previous analyzes, the specialists placed a target price on the digital currency: it is u$s73.000.
For JP Morgan analysts, cryptocurrencies, “should continue to perform phenomenally in 2022”
If the current price is contemplated, this projection would represent about a 17% increase, something that does not seem so far if you take into account the high volatility of the asset and contemplating the past upward trends.
On the other hand, JP Morgan differentiated the market price, driven by supply and demand, from the “fair” value of this cryptocurrency. In this case, the price would have to be $ 35,000, which means that bitcoin is overvalued by more than 77% if current prices are taken into account.
In any case, on many occasions, the “fair” value of an asset does not tend to coincide with its market price, mainly because investors and operators discount future expectations.
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Ethereum closes an unforgettable year: why its cryptocurrency was the big “winner” of 2021