Cryptocurrency Market Falling: Bitcoin Below $ 20,000 | Free press

Cryptocurrencies such as Bitcoin and Ether are known for their price fluctuations. On Saturday, the situation worsened. There are a lot of reasons. Some are more ad hoc, others are not.

Frankfurt am Main.

The cryptocurrency market is not calming down. The prices of many digital stocks continued to fall on Saturday.

The price of a single bitcoin, the oldest and largest digital currency by market value, has dropped below $ 20,000. Number two in the market, Ether, fell below the $ 1,000 mark. The market value of all approximately 19,900 crypto assets continued to decline.

The value of one bitcoin dropped to $ 18,690 on the Bitfinex trading platform on Saturday morning. That’s ten percent less than the day before. The price of aether dropped to $ 973. Bitcoin costs the same as at the end of 2020, the price of ether was last so low in early 2021. According to Coinmarketcap, the market size of all currently existing cryptocurrencies has dropped to $ 832 billion. That’s less than a third of the nearly $ 3 trillion record set in November.

Destructive annual development

The annual growth of many digital currencies is devastating. Bitcoin has lost nearly 60 percent of its value since the beginning of the year, and ether has lost more than 70 percent. The decline has accelerated, especially in the past few weeks as Bitcoin & Co has been dragged into a spiral of negative sentiment in the financial markets. Despite recent huge losses, Bitcoin has appreciated significantly over the past ten years.

The reasons for the sharp falls in prices in recent months are on the one hand economic: many central banks around the world are raising their key interest rates to keep high inflation under control. Thus, interest rates in the capital markets are rising at a historically high pace. Risky assets, including crypto assets, will suffer from development as they do not generate current income. Fixed income securities, for example, become more profitable again.

problems pile up

In this already unfavorable environment, the growing problems in the sector weigh particularly heavily. The sentiment has been weighing on the sentiment for some time that the cryptocurrency lender Celsius Network has suspended withdrawals and transfers. There are also reports that some hedge funds that rely on crypto assets are increasingly suffering from falling prices. A few weeks ago, the turmoil was caused by the fall in the price of the internet currency, which in fact was supposed to be stable, the so-called stablecoin TerraUSD.

Cryptocurrency expert Timo Emden of Emden-Research also gave technical reasons for the fall in prices again. “The comparatively low trading volume over the weekend may have triggered a slowdown,” says one comment. “If more is put on the market, it could have a domino effect and trigger more sales. Explosive price movements are then possible quickly ”.

Bitcoin and other digital currencies have traditionally fluctuated strongly, and in recent years there were already a few so-called “winter cryptocurrencies” around 2014 and 2018 where prices fell before going up again later. This time, however, the economic environment is even more difficult than then. (dpa)

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