Nothing attracts investors and traders like the good old bull market. And although there have been many successful trends throughout history, none of them has been compared to the success of cryptocurrencies.
As recently as 2010, one bitcoin cost less than five cents, and already in 2021 they were ready to pay almost $ 70,000 for a token. A rally of this magnitude has led to the emergence of many thousands of new digital currencies. Imitation, of course, remains the most sincere form of flattery, and new tokens attract market participants with the prospects of fabulous profits.
However, profit goes hand in hand with risks, and cryptocurrencies are no exception to the rules of the game. While some are chasing easy money, others support cryptocurrencies for ideological reasons, since the new asset class is designed to become an alternative to traditional means of exchange, fiat currencies and even gold.
The degree of acceptance of cryptocurrencies is growing, but it was speculative activity that contributed to the jump in prices and wild market volatility. Throughout 2021, cryptocurrencies have experienced both a breathtaking rally and a rapid decline.
However, one trend remains unchanged: the number of cryptocurrencies is steadily growing. New tokens seem to appear every day, and against this background, the question arises whether there may be too many of them in the end?
The bullish trend led to a jump in value
In 2021, bitcoin and ether made significant progress, but the volatility turned out to be very high. As of December 31, the annual growth of bitcoin (which was trading just below $46,000) was 57.8%.
Ether performed much better in percentage terms, gaining 392% and ending trading on December 31, 2021 at $ 3,650. The record highs of the two leading cryptocurrencies were recorded on November 10.
