Bitcoin: an unprecedented crisis in many respects, cryptocurrencies

The minimum price of $ 20,000 this weekend lost to bitcoin, the price fell to $ 17,600. However, the most important information is that it fell below its record of December 18, 2017 at $ 19,511, which carries the most famous cryptocurrency in a period of unprecedented uncertainty, despite the fact that today it exceeds $ 21,000. “The HODLer mentality is really being tested, and those who have not yet given up may be tempted more than ever.”Judge Craig Earlam, Oanda Market Analyst.

In the world of bitcoin, there is a category of very special investors who practice “HODL”, they are called HODLers. Far from speculators looking for the slightest movement in the market, they buy tokens that they keep as long as possible in the hope – still – of winning. The term comes from the deformation of the English term canned (keep), this would have been used for the first time in capital letters by a clearly drunk Internet user on the forum and “Bad trader”in his own words.

The three-year rule no longer applies

The principle could have remained in suspense on the Internet if the progress of bitcoin had not been so stable, despite very strong variations, over the years. So much so that there is finally an unwritten rule according to which any investor who keeps his tokens for at least three years, is in the return on capital. HODL has become almost a religion: a belief in the foundations of bitcoin, and so it will continue to grow for centuries and centuries.

Unfortunately, the price for the moment incorrectly affected the three-year law. It is not enough to question the dogma of HODL, but it is a blow to its followers.

DeFi doesn’t help

According to some analysts, the price of bitcoin has fallen victim to the crisis of decentralized finance (DeFi): “The crisis of confidence in DeFi is spreading, because in the end its structures are largely unclear”, Judge Philippe de Guville, Director General of Ismo. The (centralized) credit savings platform Celsius has suspended withdrawals for more than a week, which calls into question its solvency. “Total blocked value”, ie all the amounts pledged in DeFi, decreased from $ 107 billion when it peaked on November 9, 2021, to $ 38 billion today.

In recent days, another protocol has caused panic: Solend, which is in a liquidity crisis, to such an extent that its administrators put to the vote and managed to seize the account of the “whale” (an important investor). Yes, you understood correctly: it was about the seizure of his assets. The West, however, was canceled by second ballot after the resonance in social networks. “I can’t stop thinking about it livestock farm George Orwell: “All animals are created equal, but some are bigger than others”, comments Jeffrey Halley, market analyst also Oanda. He regrets that the DeFi ecosystem is less decentralized than he said because the problems are growing. “I’m not ruling out a crypto rally this week because there seem to have been enough lambs silenced.”he nuances.

Several unknowns

But other unknowns worry more: “The reality is that we have no history to evaluate bitcoin with high inflation, such a high dollar and strong growth.”says on Twitter independent analyst Leticia Bonaventura.

Created in 2009, it crosses this configuration for the first time. The tightening of the US Federal Reserve’s monetary policy has recently led to declines in markets as well as cryptocurrencies, while bitcoin was supposed to be separated from traditional assets, leaving many investors in doubt.

Technology is still evolving

Meanwhile, the lives of other players go on almost as if nothing had happened: PayPal has received a license in the United States for authorization exchange cryptocurrencies between their customers and third-party wallets.

Circle, for its part, is still planning to launch a token secured (stable coin) against the euro: the euro. The American company is already distributing another very popular stablecoin – USDC. “Yesterday, Europeans used dollar stablecoins. So tomorrow they will use euro stablecoins under the supervision of the US regulator. What progress! » Claire Balva, director of the blockchain at KPMG, jokes on LinkedIn. And add: “Meanwhile, in Europe, the regulator’s goal is to protect consumers from European stablecoins, which do not yet exist. […] The United States has long understood how to use cryptocurrency to expand its influence. The European objection must end. »

The fall in prices is attracting attention, but the ecosystem continues to grow. HODLers are sure to experience new transformations.