Markets.com Logo
euEnglish
LoginSign Up

Cryptocurrency update: Bitcoin still struggling

Jan 20, 2022
4 min read
Table of Contents
  • 1. Cryptocurrency update
  • 2. Can Bitcoin break out of the $42,000 range?
  • 3. EU puts crypto mining under the environmental spotlight
  • 4. Andreessen Horowitz looking for $4.5bn for new crypto fund

Bitcoin is still finding it difficult to break away from the $42,000 level with the Fed’s hawkish pivot providing impetus for a crypto sell-off.

Cryptocurrency update

Can Bitcoin break out of the $42,000 range?

A hawkish Fed and a sagging equities market are both weighing hard on Bitcoin and the wider crypto market.

Bitcoin has basically stayed stuck around the $42,000 mark for the past week or so, following on from the Fed’s rate hike hints, as well as a drop in US tech stocks.

At the time of writing, Bitcoin was in the midst of another sideways churn. Up 0.8% on the day, BTC was trading for about $42,161. Not much progress across the week.

For the world’s most popular crypto token, 2022 has not been the best of years. According to Coindesk research, BTC is now down 8.7% year-to-date. Other coins are performing the same, such as Ethereum, which has dropped 13% on a year-to-date basis.

At the moment, much of this churn can be attributed to an early year sell-off. There are expectations that the Federal Reserve could raise interest rates as early as March. Investors look like they’re dumping their risky assets in line with the incoming hike.

Bitcoin is some 37% off its all-time high. Volatility is nothing new in crypto markets, but it may pick up following the Fed’s hawkish pivot. But what would constitute a huge crash in assets like equities or crude oil, such drops are par the course for digital tokens.

The fear and greed index is up by a couple of points, with a score of 24, but it’s still firmly in the red. The Bitcoin bear market rolls on.

Bitcoin Fear and Greed Index is 24. Fear
Current price: $41,968 pic.twitter.com/ZDBTTvEpyE

— Bitcoin Fear and Greed Index (@BitcoinFear) January 20, 2022

EU puts crypto mining under the environmental spotlight

We’ve long talked about the environmental impact of crypto mining, especially networks which run on power-hungry Proof of Work (PoW) blockchain networks. Now, the EU appears to be putting the heat on digital token miners, raising its potentially harmful impact once more.

Erik Thedéen, Vice-Chair of the European Securities and Markets Authority (ESMA) has called for a bloc-wide ban on PoW mining with miners moving towards a Proof of Stake model.

Proof of Work systems basically require all participants on a blockchain to verify transactions. The computing power needed to generate tokens is massive, hence why mining operations are usually large-scale clusters of computers and servers tied together. The net result is high power consumption.

Bitcoin and Ethereum currently both run on PoW networks, although Ethereum is in the process of transitioning to a PoS system.

Proof of stake slashes the number of network uses needed to verify transactions.  That drops the amount of power required to generate digital coins, thus liming mining’s enverionmental damage.

In 2020, Bitcoin mining alone used more power than Sweden. As a Swede himself, it’s no wonder Thedéen is keen to push miners towards more sustainable methods.

“We need to have a discussion about shifting the industry to a more efficient technology,” Thedéen told the Financial Times. “The financial industry and a lot of large institutions are now active in cryptocurrency markets, and they have [environmental, social and governance] responsibilities.”

There are currently no indicators that Bitcoin will move to a Proof of Stake blockchain solution in the future. Expect the conversation around the token’s sustainability and energy consumption to increase going forward.

Andreessen Horowitz looking for $4.5bn for new crypto fund

Venture capital firm Andreesen Horowitz is aiming to raise $4.5bn in capital for a new cryptocurrency investment fund.

The firm has told prospective investors it is looking for an initial $3.5bn to build a crypto investment funds. Andreesen Horowitz already raised $2.2bn in June for its Crypto Fund III, the largest sum raised for a digital token fund to date.

The other $1bn is to invest in seed funding for crypto and digital finance startups.

The new crypto fund would be the industry’s largest, overtaking the $2.5 billion raised by Paradigm in November.

It comes just weeks after Katie Haun, an a16z partner, said she was leaving the company to start her own venture capital firm.

 


Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients. 

Written by
SHARE

Markets

  • Palladium - Cash

    chartpng

    --

    2.03%
  • EUR/USD

    chartpng

    --

    -0.06%
  • Cotton

    chartpng

    --

    0.15%
  • AUD/USD

    chartpng

    --

    -0.06%
  • Santander

    chartpng

    --

    0.16%
  • Apple.svg

    Apple

    chartpng

    --

    -0.02%
  • easyJet

    chartpng

    --

    -0.54%
  • VIXX

    chartpng

    --

    -0.29%
  • Silver

    chartpng

    --

    0.10%
Table of Contents
  • 1. Cryptocurrency update
  • 2. Can Bitcoin break out of the $42,000 range?
  • 3. EU puts crypto mining under the environmental spotlight
  • 4. Andreessen Horowitz looking for $4.5bn for new crypto fund

Related Articles

Trending Stocks Today: PLTR Stock , MCVT Stock, SMCI Stock, NVDA Stock

Trending Stocks Today: in the ever-evolving landscape of financial markets, certain stocks catch the attention of market participants due to their innovative approaches and strategic developments.

Frances Wang|about 13 hours ago
Interest rate cut percentage

Week Ahead: Interest Rate Decisions from Fed, BoC, and BoJ in Focus

The U.S. JOLTs job openings for May stood at 7.769 million, with June’s figure (due 29 July, 1400 GMT) expected to fall to 7.1 million, signalling a cooling labour market under tight Fed policy.

Tommy Yap|1 day ago

ECB Rate Cut Expectations Revised Amid Economic Resilience

Following the ECB's decision to hold interest rates steady, Goldman Sachs and JPMorgan Chase revised their expectations for future rate cuts, considering the economic resilience and potential developments in EU-US trade relations.

Liam James|3 days ago
Markets.com Logo
google playapp storeweb tradertradingView

Contact Us

support@markets.com+12845680155

Markets

  • Forex
  • Shares
  • Commodities
  • Indices
  • Crypto
  • ETFs
  • Bonds

Trading

  • Trading Tools
  • Platform
  • Web Platform
  • App
  • TradingView
  • MT4
  • MT5
  • CFD Trading
  • CFD Asset List
  • Trading Info
  • Trading Conditions
  • Trading Hours
  • Trading Calculators
  • Economic Calendar

Learn

  • News
  • Trading Basics
  • Glossary
  • Webinars
  • Traders' Clinic
  • Education Centre

About

  • Why markets.com
  • Global Offering
  • Our Group
  • Careers
  • FAQs
  • Legal Pack
  • Safety Online
  • Complaints
  • Contact Support
  • Help Centre
  • Sitemap
  • Cookie Disclosure
  • Awards and Media

Promo

  • Gold Festival
  • Crypto Trading
  • marketsClub
  • Welcome Bonus
  • Loyal Bonus
  • Referral Bonus

Partnership

  • Affiliation
  • IB

Follow us on

  • Facebook
  • Instagram
  • Twitter
  • Youtube
  • Linkedin
  • Threads
  • Tiktok

Listed on

  • 2023 Best Trading Platform Middle East - International Business Magazine
  • 2023 Best Trading Conditions Broker - Forexing.com
  • 2023 Most Trusted Forex Broker - Forexing.com
  • 2023 Most Transparent Broker - AllForexBonus.com
  • 2024 Best Broker for Beginners, United Kingdom - Global Brands Magazine
  • 2024 Best MT4 & MT5 Trading Platform Europe - Brands Review Magazine
  • 2024 Top Research and Education Resources Asia - Global Business and Finance Magazine
  • 2024 Leading CFD Broker Africa - Brands Review Magazine
  • 2024 Best Broker For Beginners LATAM - Global Business and Finance Magazine
  • 2024 Best Mobile Trading App MENA - Brands Review Magazine
  • 2024 Best Outstanding Value Brokerage MENA - Global Business and Finance Magazine
  • 2024 Best Broker for Customer Service MENA - Global Business and Finance Magazine
LegalLegal PackCookie DisclosureSafety Online

Payment
Methods

mastercardvisanetellerskrillwire transferzotapay
The markets.com/za/ site is operated by Markets South Africa (Pty) Ltd which is a regulated by the FSCA under license no. 46860 and licensed to operate as an Over The Counter Derivatives Provider (ODP) in terms of the Financial Markets Act no.19 of 2012. Markets South Africa (Pty) Ltd is located at BOUNDARY PLACE 18 RIVONIA ROAD, ILLOVO SANDTON, JOHANNESBURG, GAUTENG, 2196, South Africa. 

High Risk Investment Warning: Trading Foreign Exchange (Forex) and Contracts For Difference (CFDs) is highly speculative, carries a high level of risk and is not appropriate for every investor. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. Please read the full  Risk Disclosure Statement which gives you a more detailed explanation of the risks involved.

For privacy and data protection related complaints please contact us at privacy@markets.com. Please read our PRIVACY POLICY STATEMENT for more information on handling of personal data.

Markets.com operates through the following subsidiaries:

Safecap Investments Limited, which is regulated by the Cyprus Securities and Exchange Commission (“CySEC”) under license no. 092/08. Safecap is incorporated in the Republic of Cyprus under company number ΗΕ186196.

Markets International Limited is registered  in the Saint Vincent and The Grenadines (“SVG”) under the revised Laws of Saint Vincent and The Grenadines 2009, with registration number  27030 BC 2023.

Close
Close

set cookie

set cookie

We use cookies to do things like offer live chat support and show you content we think you’ll be interested in. If you’re happy with the use of cookies by markets.com, click accept.