Western Union Falls To Bitcoin as Market Continues it’s Cycle
Noise is once again rising that crypto currency is dead que the mainstream articles that will come out soon saying Bitcoin is dead. That has started to become it’s own signal of when to buy because you know that it is probably the bottom.
But as we know the crypto currency market is a dynamic and often unpredictable landscape yet it follows certain cyclical patterns that can provide insights into its future trajectory. Currently, the market seems to be in line with historical cycles suggesting that the present fluctuations are part of a typical cycle rather than signs of a definitive bear market.
Also in Venezuela crypto remittances are surging as the country grapples with severe economic challenges. with more international workers choosing to send money back to their families via Bitcoin and other crypto currencies instead of the mainstream banks and western union’s. There is growing evidence that western union’s monopoly on international remittance is over
It's just Bitcoin's Cycle
The debate over whether Bitcoin is in a bear market or merely experiencing a typical correction in a broader bull cycle is ongoing. However, data shows that Bitcoin's performance aligns closely with previous market cycles. Following the FTX collapse, Bitcoin's price hit a low of around USD 15,500. Since then it has risen approximately 250% a pattern reminiscent of previous cycles.
As seen in the 2015 to 2018 cycle Bitcoin increased by 234% from a cycle low point. Similarly, in the 2018 to 2022 cycle, Bitcoin saw an increase of about 240%. These cycles typically experienced stagnation in the following months. But hold on to your Bitcoin because they did witness significant upward movement starting in Q4. This historical consistency suggests that the current market behaviour is not an anomaly but rather part of a recurring pattern.
The current market environment is also influenced by Bitcoin options expiry events which can cause significant volatility. Recently, around 18,000 Bitcoin options contracts valued at approximately USD 1 billion, expired. Despite being smaller than the end of-quarter expiry. These events still contribute to market fluctuations. The put/call ratio of 0.65 indicates more long (call) contracts expiring than shorts (puts) which typically suggests a bullish sentiment.
The broader market sentiment has turned more pessimistic with implied volatility (IV) rising significantly. Implied volatility measures future volatility from expiring contracts and increases during major market movements. This pessimism is reflected in the market’s performance, with Bitcoin and Ethereum experiencing substantial declines. As the market adjusts to these expirations, the broader crypto landscape remains volatile but in line with historical patterns.
Venezuela Remittance Increase as Western Union Loses Ground to Crypto Currency
As Venezuela's economic situation deteriorates futher we are seeing an increase in crypto remittances which have surged providing a crucial lifeline for many citizens. In 2023 crypto currencies accounted for 9% of the USD 5.4 billion in remittances sent to Venezuela this amounted to a whopping USD 461 million. This growth in crypto remittances has been consistent since 2018 barring a slight dip in 2020 when COVID hit.
Traditional remittance services like Western Union often involve steep fees, long wait times and issues with currency supply making them less viable for many in developing countries. Crypto currencies on the other hand offer a more efficient alternative. They provide faster transaction times and lower fees which are critical for Venezuelans dealing with hyperinflation and economic instability.
The shift to Crypto currencies for international remittance has seen Western Union Profits drop massively despite the increase in global remittance occurring, indicating an end to the companies monopoly on international transfers.
Despite having the largest proven oil reserves globally Venezuela's economy is plagued by inflation, sanctions, supply issues and government corruption. In 2018, the Venezuelan government introduced a state backed crypto currency called the Petro to circumvent U.S. sanctions. However, due to perceived corruption and its lack of legal tender status the Petro failed to gain traction and was eventually shut down in 2024.
The Venezuelan government has continued to explore digital assets to facilitate international trade, particularly in the oil sector. This has led to further complications such as Tether freezing USDT assets held by Venezuela in compliance with U.S. sanctions. Additionally, the country suffers from widespread energy shortages which have led to bans on crypto mining to reduce the burden on the power grid.
The Outlook
The current state of the crypto market reflects historical cycles, indicating that recent fluctuations are part of a broader pattern rather than a definitive bear market. Meanwhile, in Venezuela, the surge in crypto remittances underscores the crucial role crypto currencies play in providing financial stability amid severe economic challenges.
As the global crypto market continues to evolve, understanding these cycles and the practical applications of crypto currencies in different regions becomes increasingly important. Whether navigating market trends or addressing real world economic issues. The crypto landscape offers a complex but promising option for both investors and everyday users.
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Posted Using InLeo Alpha