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The crypto numbers over the past 5 years have a story to tell, and it’s not a rosy one

Cryptocurrency is one of the most talked about investment vehicles for Millennials and Gen Z. Over the past five years, digital tokens have multiplied investors’ fortunes. Recently, these tokens have been under tremendous selling pressure due to unstable macro indicators. This is also attributed to a tighter regulatory stance from the Reserve Bank of India (RBI). The once cheerful investors can now be seen venting their anger on social media platforms.

Tracking cryptocurrencies over the past five years

On July 7, 2022, Bitcoin was trading at $20,528. In comparison, the price of bitcoin was almost $2,500 on July 7, 2017. This shows an eightfold increase in the token price. However, the image may not be as black and white. Since peaking at $67,566 in November 2021, the largest cryptocurrency’s market cap has declined by around $880 billion, or nearly 70 percent of investor wealth.

Ethereum was trading at $245.99 on July 7th, 2017. The second largest digital token by market cap peaked at $4,800 on November 8, 2021. Today it is trading at $1,182.40.

A similar story can be seen at BNB, which debuted in July 2017. From its price of $0.11, BNB rose to $675.68 in May 2021 and then back to $654.32 in November 2021. However, on July 7, 2022, it was trading at $237.57, over 60 percent below its all-time high.

XRP was trading at $0.2550 on July 7th, 2017. It rose to $3.3778, an all-time high in January 2018, but fell below $0.30 by September 2018. It took three years to break the $1 mark. In April 2021, it reached $1.83

Dogecoin, which is said to have Elon Musk as one of its main investors, rose from $0.00244 in July 2017 to $0.6848 in May 2021. It is currently trading at $0.06869.

What do the numbers tell us?

Market data shows that almost all major cryptocurrencies hit all-time highs sometime in 2021 and have since declined. It has now been months since crypto investors have reaped significant gains. The situation is more difficult for investors who entered the crypto market at the beginning of 2021.

Why are cryptocurrencies falling?

The fall has no specific reason. The Indian government and the RBI have not been keen on cryptocurrencies for years. The RBI imposed an outright ban on “private cryptocurrencies” in 2018. The Supreme Court of India overturned the ban later in 2020.

Finance Minister Nirmala Sitharaman levied a 30 percent tax on profits from the transfer of all cryptocurrencies in her budget speech. It also announced a 1 percent TDS on digital token transfers. The regulation came into effect on July 1, 2022.

Apart from that, inflation has increased worldwide. The ongoing war between Russia and Ukraine has exacerbated the situation. Several countries have reached multi-year inflation highs. To control this, central banks have started raising interest rates to absorb liquidity in the market. This has also sucked money out of the crypto markets.

Governments were also concerned about the potential use of cryptocurrency by terrorist organizations and hackers. While predicting the future is a risky business, things are looking bleak for cryptocurrencies.

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