By Tom Wilson<\/p>\n
LONDON, June 30 (Reuters) – If you’re a bitcoin investor, your nerves may have taken quite a pounding in 2021.<\/p>\n
The cryptocurrency’s journey towards the investment and commercial mainstream has gathered pace, with major financial firms and companies embracing the emerging asset.<\/p>\n
Such interest helped push it to a record high just shy of $65,000 in April.Yet in typically capricious fashion, it has since slumped by almost half.<\/p>\n
At the halfway point of the year, the original and biggest cryptocurrency is up around 20% year-to-date. Here are some charts that tell the story of bitcoin’s year so far.<\/p>\n
1\/STILL VOLATILE<\/p>\n
Wild price swings have been a defining feature of bitcoin throughout its near 13-year life.The first half of 2021 has been no different, despite hopes that greater liquidity in markets and stronger infrastructure would dampen swings.<\/p>\n
Bitcoin more than doubled from the start of the year to its all-time high of $64,895 hit in mid-April, before slumping by over half in just five weeks as regulators<\/a> across the world – especially China – cracked down on cryptocurrencies<\/a>.<\/p>\n In May alone bitcoin lost 35%, in its worst month since 2018.Last week it fell under $30,000 for the first time since January, briefly wiping out its year-to-date gains.<\/p>\n Many larger investors also left the bitcoin market after prices spiked in the first quarter, with some shifting to gold, according to JP Morgan analyst Nikolaos Panigirtzoglou.<\/p>\n “What we found out in the second quarter was that actually demand for bitcoin is price sensitive,” he said.”Some institutional investors started getting out of bitcoin in April … they thought bitcoin prices were too high relative to gold.”<\/p>\n 2\/BITCOINS OR ALTCOINS?<\/p>\n Bitcoin has attracted the lion’s share of the headlines so far this year. Yet many of its smaller digital currency rivals – known as the altcoins – have posted bigger gains.<\/p>\n Ether, the second-largest cryptocurrency, has nearly trebled so far this year, bolstered by a surge in the so-called decentralized finance sector.”DeFi” often uses its underlying blockchain technology to offer financial services without traditional middlemen such as banks.<\/p>\n Signs that the ethereum blockchain is gaining traction with mainstream financial firms has also fueled gains.<\/p>\n XRP, the seventh-largest coin, has gained a similar amount.Other once-obscure coins such as dogecoin, started in 2013 as a joke, have also far outpaced bitcoin, with investors drawn to the prospect of quick gains. Dogecoin is up over 5,000% so far this year.<\/p>\n 3\/OUTPACED BY MEME STOCKS<\/p>\n Retail investors have embraced bitcoin this year, attracted by narratives that it can act as a hedge against inflation and as a future payment method.<\/p>\n Also driving gains has been a perception that it is a vehicle for quick gains – a perceived quality shared by another 2021 financial market phenomenon: “meme” stocks, whose value is propelled by social-media buzz.<\/p>\n GameStop Corp and AMC Entertainment Holdings , two of the leading meme stocks, soared in the first quarter along with bitcoin, fueled by retail investors with spare cash and free time because of coronavirus stimulus lockdowns.<\/p>\n Yet the assets have since decoupled, with bitcoin’s gains for the year so far outpaced by GameStop – up more than 1,000% – and AMC Entertainment, which has surged over 2,500%.<\/p>\n “It’s just an extension of free money just going crazy and so I think that has somewhat you can see that rippling over into cryptocurrencies,” said Joel Kruger, a strategist at crypto exchange LMAX Digital.<\/p>\n (Reporting by Tom Wilson; Editing by Pravin Char)<\/p>\n<\/div>\n <\/p>\n