Bitcoin and the crypto market in general moved south on New Years Day, wiping out gains for the day and ending the year weaker. The top cryptocurrency is down more than 5% from its intraday high and down 2.9% over 24 hours.

Market update

Bitcoin traded above $ 46,300 on December 31, 2021 at 23:59 UTC (6:59 a.m. on January 1, 2022 in Synthetic Team), up 58% year over year – making 2021 one of BTC’s weakest years in recent years Time made.

Altcoins also saw a similar downtrend as Bitcoin, where ETH, BNB and SOL fell more than 2%. Cardanos ADA is down more than 4% during the day.

According to CoinGecko, the total market capitalization of all cryptocurrencies has fallen more than $ 100 billion from its intraday high, from a high of $ 2.4 trillion to $ 2.27 trillion.

Total market capitalization | Source: CoinGecko

The price made an abrupt reversal after BTC and other cryptocurrencies rose slightly at the beginning of the December 31st session. Bitcoin price reportedly rose more than $ 1,500 in less than an hour, likely thanks to the roughly $ 6 billion worth of option expiration event in December.

Bitcoin closes above $ 46,300

BTC price 4-hour chart | Source: Tradingview

At 58.14%, the growth rate was significantly lower than in previous years. Bitcoin closed 2020 with a profit of 309%, 2019 + 86% and 2017 +1,244%.

However, Bitcoin performed better this year than in losing years like 2018 (-71%) and 2014 (-59%). It also surpassed 2015 with a modest 38% increase.

However, the relatively low gains over the past 12 months make 2021 one of the weakest years for Bitcoin in recent history.

Poor performance can have a number of causes. Although the price hit new all-time highs of the year, it has plummeted at various times. In May, Tesla abruptly withdrew its decision to allow payments in the leading cryptocurrency, and China banned the use of cryptocurrencies. These events likely contributed to the immediate loss.

Bitcoin also suffered significant losses in late November, largely due to concerns about the COVID-19 Omicron variant.

Hodler keeps stacking sats

The yield of less than 60% YTD is much lower than many, if not most, predictions for early 2021. While they never come close to a six-figure valuation, the top cryptocurrency players continue to attract investors who prefer low time frames. Investors who prefer short periods of time place more emphasis on the state of their finances in the distant future than on the present.

BTC’s recent price correction is largely due to the summer “crypto tourists” entering the market. As reported, veteran owners are still selling record-low amounts of BTC in late December. Meanwhile, buying activity on Coinbase seems to have increased significantly towards the end of the year.

Earlier this week, UTXO Management analyst Dylan LeClair highlighted:

“Long-term Bitcoin holders have an average on-chain cost base of $ 17,825, but those currently issuing coins have a cost base of $ 33,890. The long-term owners are really determined HODL. ”

Cost base for long-term owners and BTC price | Source: Glassnode

In addition to long-term retail-oriented hodlers, the market saw a wave of professional institutional investors in 2021. According to CoinShares data, the amount of net cash flowing into crypto funds exceeded $ 9.3 billion in 2021, with Bitcoin accounting for more than two-thirds of that. These funds had inflows for 16 consecutive weeks through December 13th.

Altcoins do better

Bitcoin’s relatively poor performance this year has given a number of other altcoins the opportunity to shine at a breakneck pace.

Solana (SOL), a major competitor to Ethereum, is up 9.179% year-over-year, making it one of the top 5 coins by market capitalization.

Decentraland (MANA) earned 3.823%. As a virtual land token, the growth is likely due to the Metaverse hype sparked by Facebook and other companies in October.

Dogecoin (DOGE) also rose significantly by 2,906% over the course of the year. The run of the largest meme coin began in April when the short squeeze event drew GameStop’s attention to DOGE as a “meme” investment.

Bitcoin’s closest competitor, Ethereum (ETH), has grown slowly but steadily by 406% throughout the year.

Other coins that have increased significantly this year are BNB + 1255%, ENJ + 1812%, CRO + 841%, ADA + 650% and UNI + 262%.

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