Markets to date: bitcoin after the current cycle high in 2022

Key facts:

Bitcoin achieved a return of 60% in 2021, double that of traditional assets.
In the fourth quarter of 2021 bitcoin appreciated 11.42%.

Mercados al día is an exclusive summary of the news that moves the bitcoiner economy. It is sent in advance by email to a list of subscribers and then published every Monday on CriptoNoticias. If you want to have the information in advance, subscribe to the list here.

Bitcoin closed the year 2021 with a return of 60%, after reaching an all-time high close to $ 70,000. However, for various analysts and traders, bitcoin has not yet reached the maximum value of the current bullish cycle, which was expected by the end of this year.

With this annual performance, bitcoin showed an appreciation much higher than that of traditional assets, as reported by CriptoNoticias. The S&P 500 index ended 2021 with a 29% return, while gold closed in the red, down 6% on the year.

November and December were months in the red for the price of bitcoin. In November, the price decline was 7%, while in December, the price drop was 18.75%. However, thanks to the extraordinary rise in the price in October, of 40%, the fourth quarter ended with an appreciation of 11.42%. In 2021, only the April-June quarter turned red for bitcoin, with a 42% price decline.

Annual returns of bitcoin price since 2009. Source: buybitcoinworldwide.com.

In the graph the annual returns of the price of bitcoin are represented. As can be seen, bitcoin has grown every year since 2009, except in 2014 and 2018. As a logarithmic scale is used, the height of the annual candles corresponds to percentage increases in price. However, the absolute price increase is higher in the most recent years.

This year, for example, bitcoin increased in price by almost USD 20,000, while in 2017 the annual increase was close to USD 13,000. As a percentage, however, the price increase in 2017 was 1,335%, compared to the 60% appreciation this year.

In 2021 the expectation of seeing bitcoin in 6 figures fell

At the end of 2021, the price of bitcoin registered the price of USD 46,219, according to the CriptoNoticias price index. Although the first cryptocurrency reached a 60% appreciation, compared to the USD 28,972 with which it opened the year, the market expected a higher yield from bitcoin.

Several well-known analysts and traders had estimated a closing price for bitcoin in 2021 above $ 100,000. CriptoNoticias referred to the main predictions about the price of BTC that emerged since the beginning of the year, and that were not fulfilled. Among these estimates, analyst Willy Woo pointed to a possible goal of $ 300,000 for BTC in 2021, although he later spoke for an extension of the bitcoin cycle in 2022.

BTC flow to and from the hodlers. Source: charts.woobull.com.

In a December 21 analysis by Woo, commented on by CryptoNews, the analyst defends his stance of a bullish start to 2022 for the price of bitcoin. He argues that so-called hodlers, or investors with little willingness to sell, are buying back the BTC they sold last May.

Featured chart of the week

This graph establishes the comparison of the companies that acquire bitcoin for their strategic treasury reserve in contrast to the BTC funds managed by companies that have launched spot ETFs or directly backed by bitcoin.

Bitcoin ETF vs Companies that hold BTC. Source: charts.woobull.com.

The graph shows that while the BTC managed by the different ETFs show a slightly decreasing trend, the BTC acquired by companies such as Block.one and MicroStrategy show an increasing trend.

Holders retain 86% of bitcoin money

Bitcoin holders, classified as long-term (LTH) if they have held the coins for more than five months, and short-term (STH) otherwise, control a total of 86.45% of bitcoin money, according to to a Glassnode report, commented on here.

BTC circulating distribution in 2021. Source: Glassnode.

LTHs control 13.33 million BTC, while STHs manage 3.01 million BTC. In the case of BTC inventories on exchanges, the total figure has been decreasing and ended the year at 2.56 million BTC.

MicroStrategy and Block.one dominate in retained BTC

In terms of institutional investment, the acquisition of bitcoin by corporations continued in 2021. The strategy of accumulating BTC as a strategic reserve instead of dollars was very beneficial for these companies.

CriptoNoticias analyzed on December 25 the first five companies, by the amount of BTC they have acquired. Block.one, the company responsible for the issuance of the EOS cryptocurrency, is the leader in BTC acquired with 140,000, followed by MicroStrategy, with 122,478 BTC.

In a distant third place is Tesla with 42,902 BTC, followed by the Tezos Foundation (17,500 BTC) and Galaxy Digital Holdings (16,400 BTC).

Cryptocurrency market tripled in value in 2021

The market capitalization of cryptocurrencies tripled in 2021, as we report in this medium. This represented a return three times greater than that obtained by bitcoin in the same period. At the beginning of 2021, the market capitalization of cryptocurrencies was USD 766,678 million, while, at the end of last year, that figure rose to USD 2.37 trillion. Bitcoin’s dominance declined in 2021 from 70% to 40.3%, in figures from CoinMarketCap.