Cryptocurrencies are still on the decline. Bitcoin is also going downhill. An improvement in the situation is currently not in sight.
The essentials in brief • Many cryptocurrency prices continued to collapse on Saturday. • The value of one bitcoin has fallen below the $20,000 mark. • Overall, the market value of all crypto assets continued to decline.
Cryptocurrencies are known for their fluctuating prices.
After the soaring of the digital currencies, the disillusionment follows: Many of the cryptocurrencies are complaining about enormous losses in value.
The price of a bitcoin, the largest digital currency by market value, fell below the US$ 20,000 mark (CHF 19,416).
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The number two in the market, ether, fell below the $1,000 (970 francs) threshold. The market value of all around 19,900 crypto assets continued to decline.
Bitcoin drops to 2020 levels
The value of one bitcoin fell to $18,690 on the Bitfinex trading platform on Saturday morning. That was about ten percent less than the day before.
The price of an ether dropped to $973 (944 francs).
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A bitcoin costs as little as it did at the end of 2020, the ether price was last so low at the beginning of 2021.
The market volume of all cryptocurrencies currently in existence fell to $832 billion, according to Coinmarketcap.
That ‘s less than a third of the nearly $3 trillion record set in November.
The annual development of many digital currencies is devastating.
Since the beginning of the year, Bitcoin has lost almost 60 percent of its value.
Ether has even lost more than 70 percent in value.
The descent has accelerated, especially in the past few weeks.
The reason was a downward spiral of a generally bad mood on the financial markets.
Despite the recent massive losses, Bitcoin has increased significantly in value over the past ten years.
The reasons for the high price losses in recent months are, on the one hand, of an economic nature : all over the world, many central banks are raising their key interest rates in order to get the high inflation under control.
Interest rates on the capital markets are therefore rising at a historically high rate.
Risky assets, which include crypto assets, will be hurt by the development because they don’t generate current income.
In contrast, fixed -income securities , for example, are becoming more lucrative again.
In this already unfavorable environment, increasing problems in the sector weigh particularly heavily.
Sentiment has been weighing on sentiment for some time that crypto lender Celsius Network has paused payouts and transfers.
Bitcoin : Shock at Terra USD crash
There are also reports that some hedge funds that rely on crypto assets are increasingly suffering from the price drop.
A price slump a few weeks ago had already caused a stir.
The internet currency stable-coin Terra-USD, which was actually designed to be stable, crashed.
Crypto expert Timo Emden from Emden-Research also gave technical reasons for the renewed price slump.
“The comparatively low trading volume over the weekend could have triggered the downturn,” says a comment.
“If a larger amount is thrown onto the market, this can trigger a domino effect and trigger further sales.
Explosive price movements are then quickly possible.”
Bitcoin and other digital currencies are traditionally subject to strong fluctuations.
There have been several so-called “crypto winters” in recent years.
Around 2014 and 2018, in which prices plummeted before later bouncing back up.
This time, however, the economic environment is even more difficult than it was then.
