This 2022 has not been the best start for Constellation Software in general, although Bitcoin has been more evident in its fall since having had an incredible year, where it distributed profits to all its followers.
As explained by many economists, cryptocurrencies have a life cycle in the digital market that is already repetitive, where their value stagnates, but it is only a bubble that then explodes with high values, which is to be expected in a market so volatile.
A look at the first quarter of Bitcoin in 2022
Although BITCOIN had been in decline since November, when its prices had fallen by almost 18% at the beginning of the year, going from more than 47,000 dollars per unit to 35,000, it may be somewhat alarming for many the losses it has shown are moderate.
For March, the values of cryptocurrencies have begun to recover steadily; even their upward push occurred for eight consecutive days. Still, their movements suggest that this trend will continue throughout the second quarter of the year.
A complex situation is looming in the face of possible new announcements from the Fed, all that remains is to wait to observe the behavior that cryptocurrencies develop and there be able to determine if their upward trend will flow like water.
Although for many analysts, the fact that for the year 2021, the upward movements reached almost 115% is contradictory, while for 2022, the performances of the cryptocurrencies were utterly opposite, generating between 5 and 25% profits.
Statisticians who analyze the crypto market have determined that January of this year has been the worst since 2018.
The war has influenced the value of digital currencies
There have been various factors that investors consider to have been the leading causes of the decrease in the prices of cryptocurrencies, among which the Fed report stands out, where they increase interest rates in the North American country,
On the other hand, the electricity and internet connectivity failures that occurred in Kazakhstan and, last but not least, the Russia’s invasion of Ukraine.
This situation may have been most closely linked to the valuation of cryptocurrencies since the governments of both nations have begun to promote the DIGITAL FINANCIAL SYSTEM.
For Russia, the panorama is more complex since this country’s actions against Ukraine have brought about a series of sanctions, where the commercial and financial operations of this world power are limited.
For the digital market, this has meant a push of great importance since, with the beginning of the war, the use and management of crypto assets have skyrocketed because they are being used as a means of payment and exchange of goods and services that allow the Russian population will not be affected.
The other scenario paints in favor of Ukraine since many countries in favor of contributing to the security and protection of the Ukrainian inhabitants have arranged the blockchain platform as a means of receiving any type of donations as well as payment of goods and services that this country has contracted in normal operations outside the context of war that they are currently experiencing.
The most recent impact associated with the Bitcoin falls is the assertion of regulations on cryptocurrencies in the European Parliament, but it is enough to wait for the results and reports that will emerge from April to benefit or affect the value of Bitcoin and other cryptocurrencies.
All these factors around Bitcoin, transformed into news, are the leading cause of the volatile situation that Bitcoin has experienced during the first quarter of the year.
Apparently, external factors should not influence the digital market. Still, everything that is happening shows us that they are influential and obviously have the enormous capacity to transform the digital market about the values of each of the digital currencies that make it up.
Observing the behavior of a market as new and as unique as the digital one allows us to evaluate the development of this cryptographic environment in a few months and that, indeed, the current situation reflects a fearful or frightened market.
After these falls, changes begin to originate in the financial structures of the markets since they start to adjust, and upward trends will indeed arrive.