Dubai, 2nd February 2022:- Contrary to many market analyst and commentator predictions for Bitcoin to break $100,000 per coin by the end of 2021, the digital gold has seen resistance slowing the asset’s appreciation over the last 12 months. The market slump has slowed the appreciation of Bitcoin, equating to just 3% growth based on the price in February 2021 according to Evai Ratings and Research, the crypto rating authority based in the DMCC Crypto Centre. Bitcoin depreciated in January to a low of $32,917, 52% lower than the $69,000 all-time high it enjoyed in November. However, the number of wallets holding 0.01 BTC or more has risen to an all-time high to over 9 million, compared to 7.7 million in January 2020.
The entire crypto market cap rose 278% from $767 million in January 2021, to $2.9 trillion by November 2021. The recent market depreciation has reduced the market cap back down to $1.7 trillion – which even in the face of a huge market downturn, is an increase of 131% from January last year.
The Fed’s recent announcement on inflation rates had a paradoxical effect on the crypto market, with some investors removing positions held on more volatile assets such as cryptocurrencies, while new investors keen to hedge investment against inflation joined the crypto market. The current downturn is playing out like a large correction that will soon see Bitcoin and altcoins return to new all-time highs. “If we look at inflationary pressures that are occurring at the moment, due to Covid and the recession that is occurring, governments are printing money and as a result of that, fiat money is decreasing in value. Crypto is a hedge against this as there is a fixed supply, so it doesn’t suffer from the same inflationary pressures,” advised Professor Andros Gregoriou, Chief Research Officer of Evai.io at the DMCC Crypto Centre. “Inflation will always occur – once it recovers, it will occur again because in any kind of crisis, governments always react by spending. Fiat money is constantly decreasing and, in turn, it’s devaluing your wealth, so ultimately, cryptocurrencies are the key.”
Altcoins (alternative digital assets to Bitcoin), have shown themselves to be key investments, with Metaverse assets doing especially well. Sandbox (SAND) and Decentraland (MANA), two of the most established Meataverse projects, have achieved 15,000% and 4,000% price appreciation respectively over the last twelve months.
UNXD, the luxury NFT marketplace behind Dolce and Gabanna’s first NFT collection – in which physical garments were sold via digital proof-of-ownership NFTs containing digital counterpart items, recently announced a new fashion show will taking place within the Decentraland Metaverse in March. The show will feature a range of wearables for consumer avatars, while clothing brands such as Adidas, Nike and Gucci have all entered the Metaverse market, solidifying the digital asset value associated with Metaverse projects. In January Walmart also announced plans to launch its own cryptocurrency along with a Metaverse, in which consumers will be able to purchase physical goods via an online digital world powered by cryptocurrency.
Ripple has seen a surge of investment during the final days of January, joining Cardano in ‘flipping’ the Solana blockchain by market cap and entering the top three blockchain projects alongside Bitcoin.
Meanwhile Visa announced in their first report of the fiscal quarter 2022, published at the end of January, that crypto payments worth $2.5 billion were made by customers through its crypto-linked cards during their first fiscal 2022 quarter – equivalent to 70% of their entire crypto transaction spend for fiscal 2021.
About Evai:
Evai Ratings and Research are an academically-led AI and machine learning fintech company, with headquarters in the DMCC Crypto Centre Dubai. The company is the global crypto ratings authority which provides a free-to-use, unbiased crypto ratings platform at www.evai.io, democratising the crypto market for new and experienced investors through AI and ML technology. The senior management team are made up of CEO Matthew Dixon, Chief Research Officer Professor Andros Gregoriou and Simon Reid Chief Operating Officer. Evai has offices in London, Singapore and Dubai with a specialist team that span the globe, including research and development partnerships with leading universities, including Peking University.
Evai.io - January 2022 Market Review
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