This week, cryptocurrency Bitcoin hit a record high of more than $73,000. Now the price has fallen significantly. What are the reasons?
The price of Bitcoin fell noticeably on Friday. On the Bitstamp trading platform it temporarily fell to $65,569. This is the key cryptocurrency’s lowest level since early March. At midday, one Bitcoin cost $67,547. On Thursday it reached a record high of $73,794.
“Investors are now trying to cash in on some of their profits and cash in,” commented Timo Emden from Emden Research. “The overheated prices are forcing investors to exit and possibly to a first major consolidation on still high territory.” The price is below its old record high from November 2021. According to Emden, this should give the market a crack. In addition, interest rate cut fantasies in the USA have been dampened following the US producer prices published on Thursday.
In the past few days, the Bitcoin price has rushed from one record to the next. The main reason is the high demand from several ETF providers who have been able to offer their new Bitcoin funds in the USA since January. This makes it possible for investors to invest in the digital currency without having to buy it directly themselves. Added to this is the prospect of slower Bitcoin growth as the reward for verifying Bitcoin transactions will be halved in April.
The Bitcoin rally is unparalleled, but has recently been accompanied by setbacks with increasing frequency. However, this is typical for cryptocurrencies, which are considered particularly risky financial investments due to their sometimes high price fluctuations. At the beginning of the year, Bitcoin cost around $42,000. A year ago it was only around $20,000.
Bitstamp trading platform
Source: Stern
