Bitcoin, the oldest and best-known digital currency, is again trading above the $20,000 mark (almost €18,500). Other crypto values such as Ether or Tether have recently been able to recover somewhat from their sometimes considerable price losses in 2022. The market value of all almost 22,300 digital systems is again almost one trillion dollars. After bouncing back over the past week, bitcoin surged above $21,000 over the weekend. On the night of Monday, a peak of $21,433 was marked on the Bitfinex trading platform. This is the highest level since the end of October. Ether, the second-largest digital currency by market value, has to be paid again for more than $1,500 – more than it has been since the beginning of November. Bitcoin recently cost $20,800.
The Decline of Cryptocurrencies
The courses of many cryptocurrencies had collapsed in the past year. Bitcoin plummeted from just over $46,000 to under $16,000, losing about two-thirds of its value. An important reason was the turnaround in interest rates by many central banks, which drove investors out of risky assets such as digital currencies. A second reason was the crash of major crypto exchange FTX, which dealt a severe blow to the entire industry. Distrust of crypto companies rose rapidly and put the market under great pressure.
However, the situation has eased somewhat since the beginning of the year. “It’s hopes of a slowdown in the pace of the Fed’s rate-hiking cycle that has evidently sparked risk appetite,” commented crypto expert Timo Emden. Last year, the Federal Reserve braced itself against high inflation with sharp interest rate hikes. A much more leisurely pace is expected for the current year as inflation has shifted down a gear.
After FTX bankruptcy: calls for regulation of the crypto industry are getting louder
Bitcoin falls back below $20,000 mark
Emden nevertheless issues a warning: “The current price rally is impressive and frightening at the same time. Private investors in particular could now come up with the idea of chasing the rising prices.” However, it remains to be seen how long the appetite for Bitcoin and Co will last. Crypto assets like Bitcoin are considered extremely volatile. Regulators such as BaFin therefore regularly warn against getting involved, especially by small investors.
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