Bitcoin sees a reversal as recent price rises come to a stop

Written by Simon Peters, eToro's Market Analyst

Bitcoin saw a reversal last week as its recent rises came to a stop. The cryptoasset began the week trading below $47,000, rising to a high of $47,635 on eToro on Monday.

But its performance flagged the rest of the week, sinking below $44,000 on Friday. It has recovered some momentum over the weekend however, and is now trading around $45,800.

Ether meanwhile continued steady rises over the week, despite a huge reversal on Friday. The cryptoasset began the week trading around $3,250, rising to $3,370 on Thursday. On Friday however the token underwent a major reversal, falling as low as $3,192. It staged a fast recovery over the weekend however and is now trading strongly above $3,450.?

Cryptoasset markets in the past month seem to have been marking a similar route to stocks, which have been buffeted by geopolitical tensions and rising interest rates. The bounceback of the past month has been encouraging but tokens continue to operate within a fairly restricted range, looking for more positive indicators to firm up the price.?

Investors looking at indicators of a breakout will cheer the ongoing news that stablecoin operators such as Terra continued to buy up large volumes of tokens, but beyond this the market is still in a period of uncertainty as global events unfold.?

19 millionth bitcoin mined

April Fool’s Day saw the 19 millionth bitcoin come into existence, and with it the countdown for the last two million tokens to be mined began.?

While it is a notable milestone, there is not much indication it will have a powerful impact on the market yet. Bitcoin mining is designed so that the more are created, the more difficult it becomes to create more. That we’re nearing the last millions left means the process will become slower than it has been in the past decade for growing the token.

However, real systemic change happens when the network undergoes so-called ‘halving.’ This is when the process of mining essentially becomes twice as hard or half as rewarding, hence, halving. The next bitcoin halving looks set to take place in 2024, under current conditions.?

Whether or not this will ultimately impact the price of bitcoin, time will tell. The cryptoasset was designed to be inherently deflationary, with scarcity and difficult processes in place for the creation of new tokens. Adoption has a huge impact two, and broadly this has only gone in one direction.?

Ethereum founder praises bitcoin ‘maximalism’

Ethereum founder Vitalik Buterin published an essay on Friday in which he lauded the positive aspects of so-called ‘bitcoin maximalism’ but the timing of the post, which happened on April Fool’s Day has left watchers questioning its veracity.?

The post goes into detail on the ethos of bitcoin maximalism - which essentially refutes the viability of other cryptoassets and resists change to bitcoin. Buterin’s own creation Ethereum is typically the biggest target of bitcoin ‘maxis.’?

The timing of the post has left watchers questioning its seriousness, as it was published on 1 April. But the blog seems to be taking a serious look at some of the issues facing crypto today, including bad actors and negative associations, while defending bitcoin maximalism as a movement that encompasses both rich and poor.

Ultimately Buterin advocates bitcoin remain fundamentally ‘just being money’ instead of proposing its use cases be altered. This lack of change, instead of turning people away, is a core feature of the system which is ultimately touted as an alternative digital-native global currency.?

WWE to launch NFTs

The WWE has signed a deal with Fanatics, a sports platform, to launch trading card NFTs on the Candy Digital platform. However, the cards don’t look like they’ll be available any time soon.

The wrestling organisation already has trading card licences in place that aren’t set to expire for some years. This means while the technology might be there, old fashioned rights issues mean that the cards won’t be made available to fans in the near future.?

The past year has seen a multitude of sports outfits from football teams in Europe to US NFL stars and franchises. WWE’s deal will also include licensed merchandise and other e-commerce initiatives.?

Candy Digital is not a well-known NFT platform but Fanatics and WWE both have significant brand presence in the space, which could help it further grow into a competitor in a market that has seen an explosion of operators in the past 12 months.

This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as a reliable indicator of future results.

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