All About Crypto Seasonality
The total market capitalization of the top 100 cryptocurrencies has increased over the past seven years from approximately $5.2 billion to over $1 trillion.
The total market capitalization of the top 100 cryptocurrencies has increased over the past seven years from approximately $5.2 billion to over $1 trillion. Currently, investors put their money into cryptocurrencies at a rate that makes them the fourth-most popular investment, following equities, mutual funds, and bonds. The market capitalisation of Bitcoin by itself is sufficient to place it among the top 20 largest corporations in the S&P 500.
Since the cryptocurrency market has captured the attention of the rest of the investing world and eliminated some of the early doubts surrounding its sustainability, we have decided to take a more in-depth look at the factors fueling its incredible growth.
What is Crypto Seasonality?
The concept of crypto seasonality refers to the widespread belief that the price of Bitcoin will rise and decrease over a predetermined period, significantly impacting the cryptocurrency market as a whole. Bitcoin (BTC) was the first cryptocurrency ever created and is the industry’s most valuable digital asset. Because it was the first cryptocurrency, it will always have a significant amount of value attached to it, and all following coins will be connected to it in some way. Bitcoin, on the other hand, is not a stable asset. The value of the first cryptocurrency ever created fluctuates all the time, shifting by thousands of dollars in either direction at any given moment.
It is anticipated that this volatility will reach a high once every four years before plummeting sharply, owing to the halving of the Bitcoin supply. The rewards for mining Bitcoin are halved every four years as part of a process known as "the halving", which is pre-programmed into the blockchain. This ensures that a smaller number of bitcoins are added to circulation with each mined block. The market tends to correct itself after halving the total provision of coins into circulation, with Bitcoin's price rising due to its more scarce nature.
However, the price of Bitcoin tends to crash shortly afterwards as investors cash in their newly earned profits, which causes the market to overcorrect. As the price of bitcoin continues to fall, more investors begin to worry about the security of their holdings. They may sell their Bitcoin to move their money into alternative cryptocurrencies.
Other factors affecting the value of cryptocurrencies:
The node count reveals the number of operational wallets in a given network. It demonstrates to you how resilient the community is. A large node count can demonstrate a robust community, and a strong community increases the likelihood that a particular currency will be able to weather a potential crisis. Second, the number of nodes in a network may be used as an indicator of both the strength and decentralization of the network, which are critical components in crypto.
Another component that affects the value of cryptocurrencies is the cost associated with their creation. Miners utilize specialized hardware or servers daily to produce new tokens and validate new network transactions. This process is known as "mining." Miners are compensated for their efforts with virtual tokens and a portion of the network fee. The network activity of miners makes it possible for cryptocurrencies to continue functioning.
Therefore, an increase in the costs associated with mining may increase the value of the cryptocurrency. It makes no sense for miners to waste their resources mining new cryptocurrency tokens if the rewards are insufficient to cover the expenses and earn them a profit. Miners should not mine new cryptocurrency tokens if the incentives are not large enough. However, this isn't always the case and isn't consistent across different cryptocurrencies, so it's important to do your research before committing to anything.
The availability of a token on most cryptocurrency exchanges will likely increase the number of people purchasing and utilizing that token. If you need two or more exchanges to trade any cryptocurrency token, you will be required to pay a fee for each exchange, which will increase the overall cost of the investment.
Inflation, Tax and Market Trends
Some crypto enthusiasts assume that top cryptocurrencies like Bitcoin, Ethereum, and BNB are less sensitive to the effects of external market variables. However, this may not be the case. During the first two weeks of April 2022, the value of these and other key tokens experienced a steep decline, and the overall cryptocurrency market shed approximately 400 billion dollars worth during that period. To make matters even worse, market analysts believe that a "catastrophe" in the financial markets might cause cryptocurrency values to drop even lower.
Although Bitcoin's price has fluctuated above and below a threshold of $40,000 for the majority of the year 2022, the most recent price drop serves as a reminder to investors that decentralized digital tokens may still react strongly to factors such as inflation, taxes, and the overall performance of the market as a whole. Recent developments give rise to the possibility that the assertion that cryptocurrencies can function independently of the many external market factors may not be accurate. When looking for potential correlations between cryptocurrency performance and other issues, investors should look at things like inflation, the policy of the Federal Reserve, and tax season.
Crypto Trends in October 2022
It’s October! What's trending in crypto this month?
Crypto Trends in September 2022
It’s September! What's trending in crypto this month?
Bitcoin Showing Signs of Resurgence After Catastrophic Dip: What's Contributed?
The Crypto Winter looms even as Bitcoin’s price shows signs of stabilising and resurging. Read on to discover ...
Tesla Sells Bitcoin Holdings: Will This See the Beginning of a Trend for Other Businesses Who Hold Crypto?
Getting to Grips with Arbitrage
The world of trading has many different tricks and tools refined over the years by strategists and financiers, ...
The Crypto Winter: Are There Any Advantages?
It seems that another crypto winter is among us, but what does it mean and are there any advantages? Click here ...
The Comparisons Between the 2018 Crypto Bear Market and Now: Are They Useful?
Cryptocurrency is currently heading into another bear market. Click here to find out how noting comparisons can ...
The Blossoming Intersection of Fashion and Crypto: What Does the Future Hold?
Over the last few years, fashion and crypto have been entwined together. Click here to find out what this means ...
Could Post-Merge Ethereum Have a Centralization Problem?
Ethereum recently completed its merge into Ethereum 2.0. Click here to find out if this will bring about a ...
Instagram to Add Support for NFTs
Instagram to launch NFT functionality on its platform in 100 countries worldwide
Can Ethereum’s Ecosystem Keep Its Future Bright Amidst This Crypto Winter?
Ethereum has steadily been building an ecosystem unlike any other. Click here to find out why its future remains ...
Buterin Criticises Bitcoin’s Stock-to-Flow Price Prediction Model – But What Is It?
The stock-to-flow prediction model has caused a mixed reaction amongst the crypto community. Click here to find ...
AVAX, the Ethereum Killer: What You Need to Know
AVAX, which is a token run on the Avalanche blockchain, is said to be the Ethereum killer. Click here to find out ...
A ‘Digital Library of Italian Culture’ in Puglia: Is It Expanding NFT Use to New Areas?
The University Aldo Moro is currently using NFTs as a way to reignite the culture of Puglia. Click here to find ...
Crypto’s Position in the Italian Economy: Will It Only Grow and What Would Regulation Do?
Crypto is continuing to grow in the Italian economy. Click here to find out how and what regulation might mean ...
Will the EU Adopt a Digital Currency?
Cryptocurrency is growing across the world, with more and more countries starting to embrace it. Click here to ...
Ethereum’s Proof of Stake System: Do Other Coins Use It?
Ethereum is currently switching to the proof of stake system. Click here to find out what this means and whether ...
How has Ethereum Fared in Price and Reputation in Light of Terra and Tether?
The de-pegging of Terra and Tether has had wide repercussions for the crypto market. Click here to find out how ...
NFTs and Crypto: Is the Relationship Between Blockchain Tech and Social Media Growing Ever Closer?
Social media has played a large role in the blockchain’s steady rise. Click here to find out why the relationship ...
Join the Zonda Pay affiliate program and earn a 20% commission!
We’re offering handsome rewards to users that help us to onboard new clients - sign up and start earning a ...
Several crypto transfers will be unavailable on 21 January 2023, from 14pm-17pm (UTC)
We are launching Flare (FLR) Airdrop and FLR/PLN market on 19.01.2023 at 2pm (GMT+1)
Are you ready for the Flare (FLR) Airdrop?
Scheduled Maintenance on January 19
Introducing our New Year’s BTC and ETH trading competition
Prove your skills trading BTC and ETH and win up to 10,000 PLN
Limited deposits and withdrawals on 06.01.2023
Due to public holiday, deposits and withdrawals via some channels will be unavailable tomorrow, 06.01.2023
We will be delisting several markets on 11.01.2023
Due to minimal volume and limited use, we will be delisting the following markets
PLN withdrawals on NYE
Several payment methods unavailable on December 26th
Scheduled Maintenance on December 20
3.03 The Dow theory: principles and statements
This lesson helps you understand the principles and statements of Dow’s theory.
3.05 Candlestick charts and patterns
This lesson focuses on understanding candlestick charts and patterns.
2.05 Bid-Ask spread and slippage
This lesson explains bid-ask spread and slippage.
2.04 Understanding market capitalization
This lesson centers on understanding cryptocurrency market capitalization.
2.03 Common crypto trading terms
This lesson is a compilation of the most commonly used crypto trading terms.
2.02 How to start cryptocurrency trading
This lesson explains a step-by-step process on how to start cryptocurrency trading.
2.01 Why to invest in cryptocurrencies
This lesson explains why cryptocurrencies might be a good asset to include in your investment portfolio.
3.02 Understanding technical analysis
This lesson helps you understand technical analysis in crypto trading.
3.01 What is fundamental analysis in crypto?
This lesson walks you through the fundamental analysis of cryptocurrencies.
3.04 What are the types of charts? How to read a chart?
This lesson explains how to read a chart and types of charts in technical analysis.