The price fluctuations of cryptocurrencies like Bitcoin remain high.
This was evident again on Tuesday: while the bitcoin rate initially rose significantly on Tuesday night and climbed above the $ 10,000 mark, it plummeted in the afternoon. Bitcoin on the Bitstamp trading platform was $ 10,429 in the day’s high, and $ 9,135 in the low. In the evening, the price was about $ 9,500.
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Strong price fluctuations are no exception for digital currencies like Bitcoin, but rather the rule. It is often difficult to give specific reasons for this. Market participants often mention market-related reasons such as breaking important support or resistance levels. In addition, fundamental reasons are given, such as the recent “halving”. This means an automatic reduction of the supply growth by the Bitcoin community.
Basically, cryptocurrencies, of which there are currently several thousand, do not seem to have found their place on the financial markets yet. Some investors recognize a kind of safe haven in them, similar to the raw materials gold or silver. Critical observers, on the other hand, warn of a risky asset with significant price fluctuations and without intrinsic value.
“Cryptocurrencies are not for the faint of heart,” commented Timo Emden from Emden Research on the recent ascent and descent. He justified the Bitcoin slump in the afternoon with profit taking. “Roller coaster rides are not uncommon in the world of Bitcoin and Co.”
FRANKFURT (awp international)
Many investors would have expected prices to continue falling after the bitcoin halving, writes analyst Timo Emden from Emden Reserarch. Some investors would now be forced to buy to close their positions. The last halving took place in mid-May.
“Halving”, which is firmly anchored in the program code of the cryptocurrency, is a kind of automatic protection against loss of value due to an excessive offer. For this purpose, the reward in the form of new bitcoins for executing certain computing processes (“mining”) is halved approximately every four years.
“The anti-racism protests in the United States could also make American investors switch to cryptocurrencies,” said Emden. US President Trump had recently threatened military action and heated the mind again. In several US metropolises, protests took place for the seventh consecutive night, some of which turned into violence. The development could weigh on the US economy in addition to the corona crisis.
BERLIN (awp international)
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