“Bitcoin” experienced a sharp drop in value last weekend. In a couple of hours, the most famous and valuable cryptocurrency lost 9%. Although some of the losses were subsequently recovered, there are concerns among investors.
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“Delfi Bizness” recently announced that “Bitcoin zero” experienced the most stable 90 days in terms of price since 2016. Although this was not a positive signal for investors hoping to make money with this cryptocurrency, it was a kind of guarantee that investing in cryptocurrencies is becoming safer.
However, this period of peace ended last weekend. In recent months, the price of “Bitcoin” (depending on the platform) kept at the limit of 30,000 USD per coin, but currently it is hovering around 26,000.
This was caused by several factors.
According to CNBC, one of the factors was the statement by the supervisors of the US fiscal space that interest rates may have to be raised further in order to control inflation. This means that “cheap money” to use in risky investments will not be available, so investors will choose to invest money in safer assets, such as government bonds or stocks.
The second reason could be related to the news that the obnoxious billionaire Elon Musk’s company SpaceX has sold its cryptocurrency holdings. Musk has previously been able to influence the price of cryptocurrencies with his comments and suggestions. He has also gotten into trouble because of this, being accused of price manipulation.
“The Wall Street Journal” published information that “SpaceX” got rid of a significant amount of this cryptocurrency asset both in 2021 and last year, however, according to experts, this is neither the only nor the decisive factor why the price of “Bitcoin” fell.
According to Joseph Edwards, an expert of the financial analyst firm “Enigma Securities”, in a conversation with “Reuters”, the market lacks the enthusiasm of small investors. Namely, cryptocurrencies, unlike shares, are only worth as much as potential investors are willing to pay for them. Also, they do not create any additional value and are not supported by any other assets or, for example, state guarantees. Thus, the price level is maintained by the enthusiasm and willingness of investors to pay a certain amount for this digital coin.
Experts warn that enthusiasm in the market could return if US financial market supervisors allow several large investment companies to create “Bitcoin” ETF funds that they can offer to their US clients.
2023-08-21 07:26:46
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