The universal legalization of the crypto currency revolution is still in the infancy stages. Although it is recognized as a means of transaction in certain countries, other nations have not yet embraced the decentralized form of money known as crypto currency.
A decentralized system of finance is of major advantage and positive impact as it has eliminated the idea of centrally controlled finance and replaced it with a world wherein greater autonomy financially may be attained. In the existing system of finance, your money is managed through a governing organization known as the central bank but reverse is the case in a decentralized system.
A decentralized system comes with the opportunity of making profit added to your own finance whearas such thing never happens in the centralized system of finance.
In order to evaluate the profitability in the top 3 crypto currencies over the aforementioned time period, I will look at their performances in this piece.
Bitcoin (BTC)
Bitcoin climbed steadily from $5000 to over $25,000 and above between January and December 2020. Within the year, there was a significant difference in the price of BTC of about $21500 in rise or margin.
For owners of bitcoin who purchased it earlier in 2020 while the price reached above $5000, 2021 was a better year in deed.
In line to how its price behaved in 2020, it is clear that BTC's price increased steadily during this time, from $26550 to $29500. An investor who had earlier purchased 1BTC at a price of $6000 would have made an additional $20,000.
For the majority of Bitcoin owners, 2022 was a bearish year, sometimes known as a red year. The pricing started displaying indicators of an adverse market in March.
There was also a bullish period in the price before the month of March, which was followed by a negative phase that lasted until the month of December. The cost dropped below $16,640.
However, 2023 was predicted to be a year of recovery.
It is clear that the price of Bitcoin has increased gradually since January, and between now and the middle of 2024, it is likely to reach the $30,000 mark.
Ethereum (ETH)
Ethereum had a good start to the year 2020. The profit was favorable up to December which estimated roughly $600 increase.
There is some sort of tie between its price and that of BTC because ethereum likewise saw a sudden bullish season in 2020 when the price of BTC rose up to $25,000.
For the majority of holders of Ethereum, however, 2021 was also a positive year because the asset's lowest price during that year was below $1000 and its maximum, over $4000, represented an approximation of a $3600 profit if you had purchased it in 2020.
The year 2022 was a year of red for bitcoin, and ethereum followed suit. From January to December, the price of ETH saw a bear market, providing an opportunity for purchasers.
There was a fall in the price of ETH that cost around $2800 range. This was also reflected in how well BTC's price performed.
As the price of ETH climbed from $1200 to above $2000 but is currently below $1600 as of the month of September 23, 2023, there was a slow recovery or bull season for the majority of investors who were affected by the bear market. Additionally, there was a price differential of about $600 because market conditions continue to cause price volatility.
Binance Coin (BNB)
BNB went through a bullish phase in 2020, lasting from January through December. The BNB price was above $10 when the year began, and it gradually increased until it reached $35 and above. There was an increase in pricing that was roughly in the $27 range.
For BNB investors, 2021 appears to be a bullish year as the asset's price increased above $600. It fell to $500 over the entire last month of the year.
When the price of BNB reached $240 in 2022, there was a dramatic decline in the trend. However, it appears that most crypto currencies saw a widespread bear market in 2022.
In April 2023, the market experienced a price increase for BNB above $325, and the next season was bearish. As of September 2023, the cost of BNB was less than $225.
My Research Summary
In conclusion, 2021 proved to be the most profitable year for the majority of crypto currency investors due to a bullish time in the price of major assets like BTC, ETH, and BNB.
The overall performance of an asset may not always be bullish over the course of a year, so it is important to keep this in mind when making long-term investments. If the investment you made turns out to be bearish over the course of a particular year, you can carry it over to the following year. To avoid the consequences of what occurred to FTX and LUNAR, it is crucial to conduct your own research and keep an eye on the market trend and news sources because crypto currency values are volatile, you should sell when the time is right to lock in profits and diversify your holdings. The explanation for this is that by observing the bullish and bearish seasons adequately, your profit will not be equivalent to your loss, leaving you with little to no take-home profit.
(This is not a financial advice).
Thank you for reading, I wish you a profitable week.