Bitcoin remains the subject of intense investor attention due to its unusual market performance. Here are five key aspects of its effectiveness:
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And so let’s go through the important criteria of the most famous cryptocurrency BTC
1. High-Performing Asset with Volatile Downturns: Bitcoin has been the best-performing asset in eight of the last eleven years, although it has been the worst performer in the remaining three years. This duality emphasizes his high-risk nature.
2. Cyclicals and Drawdowns: In the current bull market that began in November 2022, Bitcoin has roughly quadrupled. Against the backdrop of previous bull markets (2015-2017 and 2018-2021), when prices increased 100 and 20 times respectively, the current cycle showed eight drawdowns of 5%-20% and two of 20%-30%, with no more significant drops .
3. Price performance since the cycle crash: Bitcoin is up 400% since November 2022, reminiscent of the 2000% rise in the 2018-2022 cycle. The current growth trajectory indicates potential for further strengthening.
4. Price dynamics since the halving: Each halving cycle was accompanied by a significant increase in prices during the year. Since the fourth halving on April 19, 2024, the price of Bitcoin has declined by 2%, which may indicate future growth.
5. Annual Returns and Over-the-Year Drawdowns: Despite an average annual decline of 48%, Bitcoin has posted positive annual returns in seven of the last ten years. The 23% drawdown in the first half of 2024 is relatively modest, suggesting room for further gains in the current cycle.
Conclusion: Bitcoin market dynamics reflect a complex interplay of significant gains and declines, highlighting its volatility and potential. Understanding these patterns will help investors better navigate the cryptocurrency landscape.