After a rough quarter, cryptocurrencies are on the rise again

Bitcoin, the world's largest cryptocurrency by market capitalisation, has seen high volatility this year.

After losing market favour post a bloody quarter, the market for cryptocurrencies seems to be warming up again. In what can only be described as a 'bear market' for the crypto space, the last quarter seemingly brought to halt the euphoria around the alternative currencies, which are currently valued at halved values from their all-time highs. 

Consider this. A CoinDesk quarterly review of the market notes that Bitcoin, which is trading at around $32,600, almost 49 percent down from its all-time high of $64,863 in April 2021.  The same stands true for Ethereum, which is down by as much as 50 percent from its all-time May high of $4,300. However, Ether, the native cryptocurrency of the blockchain platform, managed to end the quarter in green with almost 18 percent growth along with XRP, which managed to rise about 21 percent. 

Bearish Sentiment

Ask any market expert and they’ll tell you that course corrections are a needed exercise. The current prices, a reflection of the same, paint a bleak picture, with Bitcoin down almost 5 percent and Ethereum following suit with an 8 percent fall over the last 24 hours. 

It's hard to discount the clear impact of all the developments that happened over the last quarter on the current prices of these assets. With China intensifying its crackdown on cryptocurrency mining by shutting crypto-mines in energy-intensive regions of Inner Mongolia, Sichuan and Qinghai, in addition to issuing warnings to banks and payment giants to halt transactions related to cryptocurrencies, miners have been looking beyond the country, traditionally the biggest crypto mining giant in the world and exploring alternatives in countries like the US, Canada, Kazakhstan and more. 

In fact, Chinese central bank officials also ordered the closure of a software company named Beijing Qudao Cultural Development for its alleged software assistance in aiding cryptocurrency transactions. And China is not alone in this quest. The UK's financial regulator recently imposed a ban on Binance, one of the world’s largest cryptocurrency exchanges. This comes in the middle of a global skepticism about the regulatory ambiguity of cryptocurrencies. 

Some hope, after all?

But some good did come out of all this. With China slowly fading away from the crypto-mining picture, it has now become 28 percent less difficult to mine crypto assets. It is a financial delight for the remaining miners on the computing network because, with more than 54 percent of the bitcoin hash rate, which is the collective power of miners gone off the network, experts predict that there is more money to be minted and more bitcoins to be earned. 

Even Visa Inc. acknowledged the massive spendings of over $1 billion on crypto-linked cards in the first half of 2021, assuring investors that it will take all necessary actions to make the cryptocurrency transactions smoother and faster. In this regard, the company also announced that it is partnering with 50 crypto platforms and 70 million merchants worldwide to empower conversion and spending of various digital currencies. 

Hold on for dear life and some interest as well

Perhaps rewarding the patience of crypto investors who do not sell despite the violent price flips in the market, ZebPay introduced an 'Earn' feature that will allow investors to earn interest on their holdings in spot and trading wallets. Here is a breakdown of interest on various altcoins.

"Cryptocurrency is today a popular asset class. Investors are looking to get in not just via the traditional mechanism of trading, but also via alternative avenues like SIPs and more. There has been a substantial rise in the number of Defi users as well. As industry data suggests, over the last year itself, the amount locked in Defi projects has gone from $600 million to $60 billion. Despite the bearish markets, we are positive about the cryptocurrency space and its sustainability in the long term,” he explains.