The growth rate of cryptocurrencies in 2022 has begun to decline. Why?
Over the past few months, Bitcoin has seen at least three important events in its history: the full legalisation of BTC in El Salvador, a historic high of $69,000 for the cryptocurrency, and a new record for the network’s hash rate. However, one of the coin’s fundamentals is on the decline – it’s the number of cryptocurrencies being set up around the world that allow newcomers to purchase coins. In the first two months of this year, the growth rate of their number has decreased compared to the same period in the previous year. We tell you more about the situation.
Cryptocurrencies are devices that allow digital assets to be purchased for cash. While they are convenient for newcomers, they have a significant disadvantage. There are serious discrepancies in exchange rates and high commissions. In addition, some of them require a “Know Your Customer” procedure, which involves disclosure of passport details.
For illustration, here is a picture of one of the crypto-machines. If anything, the smartphone in this case shows the actual coin price, and on the right side you can see the price of buying BTC with the device.
Serious discrepancy between the real Bitcoin exchange rate and the one shown in the cryptomat
What’s happening with Bitcoin
According to analysts at Cointelegraph, the increase in the number of cryptocurrencies in the first two months of each year has traditionally increased. However, this trend has been interrupted for the first time, and it has happened specifically in 2022. Between January and February, 1,817 cryptomats were installed worldwide. At the same time, in the same months of 2021, the number of machines installed reached 2,435 units, which is an increase of 618 units.
Growth in the number of cryptomats
By comparison, in January-February 2020, 760 cryptomats were installed. During the same period in 2019, only 250 units were installed.
Distribution of cryptomats by region of the world
One of the main reasons for the slowdown can be seen as a lack of country participation. For example, the United States alone accounts for 93 percent of the total number of cryptomats installed globally in 2022. On the other hand, the number of cryptomats in Europe decreased by only 1 unit in the first two months, for a total of 1,397 machines. At the time of writing, North America accounts for more than 95 per cent of all crypto machines.
Crypto machines in different parts of the world
Unless other governments step up their efforts to introduce cryptocurrencies, the rate of growth in crypto machines will be difficult to sustain, as many crypto-loyal states are already experiencing an oversupply of such devices. In addition, the tangible drop in the crypto market since the market crash that started at the end of November should be considered an important factor.
By the way, taking advantage of the current industry downturn is easy enough. As it turns out, long-term investments and further storage of coins is the only proper way to accumulate Bitcoin. At least such a report was issued by an artificial intelligence trading bot that was developed by Portuguese crypto-enthusiast Thiago Vasconcelos. He created the bot to multiply BTC in his crypto wallet, after which the bot almost immediately chose a long-term investment strategy.
How to invest in cryptocurrencies?
Vasconcelos is the main founder of Aceita Bitcoin, a Portuguese organisation that promotes the adoption, promotion and popularisation of Bitcoin. Here’s one of his quotes in an interview with Cointelegraph about the bot.
It was an artificial intelligence experiment that involved me analyzing a huge amount of data on the BTC/USDT trading pair.
Screenshot of the bot working
The bot’s logic is simple: it parses Bitcoin’s previous price movements and tries to predict a profitable trade. If it succeeds, it gets one point added to the rating, if not – it loses one point. In this way, the developer has managed to create a simple system of rewards/punishments for choosing a trading strategy.
The goal of the bot is to get the best possible result, and the exercise is that it makes thousands/millions of attempts on this dataset, compiling a ‘mental’ route of when it is best to buy, when it is best to sell and so on.
It turns out that the best route is to practically not touch your coins after buying them, the bot claims. That is, long-term investment in Bitcoin yields far more returns with minimal risk than constant trading. And that makes sense, because high market volatility can make a trader’s position unprofitable very quickly.
Moreover, if he trades with leverage, that is, with borrowed funds from the cryptocurrency exchange, he can lose all of his money. This situation is called liquidation, and it occurs when the rate moves in the wrong direction to a predetermined level.
eBay CEO Jamie Iannone
The case for investing in coins is only getting bigger. The day before, eBay’s CEO Jamie Iannone said that his company is considering integrating cryptocurrency payments soon.
We believe that every trader and investor should choose their own strategy, as it should suit their nature and amount of free time. However, if one chooses a long-term strategy, one should carefully analyze the projects in which one invests money. However, in the event of a prolonged market crash, they must at least survive - and not everyone is able to do that.
Related posts
