Bitcoin Price Cancels Out the Gains on New Year’s Eve

    On Dec. 31, Bitcoin (BTC) and the larger cryptocurrency market fell later in the day, wiping out intraday gains and putting an end to a hugely successful year on a sour note.

    Market Update

    According to statistics from Cointelegraph Markets Pro and TradingView, the price of bitcoin dipped below $46,000 on December 31 and was last spotted hanging around that level. The flagship cryptocurrency is currently trading at $45,933, down over 5% from its intraday high and 2.9 percent on the day.

    Altcoins followed Bitcoin’s downward trend, with the likes of Ether (ETH), Binance Coin (BNB), and Solana’s SOL all losing more than 2%. Cardano’s ADA fell more than 4% on the day. According to CoinGecko, the total market value of all cryptocurrencies fell by almost $100 billion from its intraday high of $2.4 trillion to $2.27 trillion.

    Crypto OGs continue to grow in number

    The abrupt turnaround came after a brief relief rally for Bitcoin and other cryptocurrencies on Dec. 31. Bitcoin’s price increased by more than $1,500 in less than an hour, according to Cointelegraph, a rise that may have been assisted by a $6 billion options expiry event in December.

    Bitcoin is expected to have a year-to-date return of less than 60%, which is considerably below the expectations of many, if not all, prognosticators at the start of 2021. Despite the fact that BTC has never approached six-figure prices, the top cryptocurrency continues to draw investors with a short time horizon. (Investors with a low time preference are more concerned with their financial well-being in the future than in the present).

    “The genuine OGs are hanging tight,” remarked UTXO Management analyst Dylan LeClair earlier this week, referring to Bitcoin’s long-term holders having a far lower on-chain cost base than those who are now selling. Long-term BTC holders have an average on-chain cost basis of $17,825 compared to $33,890 for individuals who are presently using their coins.

    In 2021, the crypto market experienced an infusion of skilled institutional investors, in addition to the retail-oriented class of long-term hodlers. According to CoinShares statistics, net flows into crypto funds hit $9.3 billion in 2021, with Bitcoin accounting for over two-thirds of that sum. Through December 13, these funds had received inflows for 16 weeks in a row.

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