The number two in the market, Ether, sank below the threshold of $ 1000. The market value of all around 19,900 crypto assets continued to decline.
The value of one Bitcoin fell to $ 17,605 on the Bitfinex trading platform on Saturday evening. That was almost 14 percent less than the day before. On Sunday, the price climbed back above the $ 19,000 mark. The price of one ether dropped to $ 881.
A Bitcoin thus cost as little in the low as it did at the end of 2020, the Ether price had last been so low at the beginning of 2021. The market volume of all currently existing cryptocurrencies fell to 861 billion dollars, according to Coinmarketcap. That’s less than a third of the record of nearly three trillion dollars 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 of its value. The decline has accelerated, especially in recent weeks, as Bitcoin & Co have fallen into the downward pull of a generally bad mood on the financial markets. Despite the recent massive losses, Bitcoin has been able to increase 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: around the world, many central banks are raising their key interest rates in order to cope with high inflation. In the capital markets, interest rates are therefore rising at a historically high pace. Risky investments, which include crypto assets, are burdened by the development, because they do not yield 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. For some time now, the mood has been weighed down by the fact that the crypto lender Celsius Network has paused withdrawals and transfers. There are also reports that some hedge funds betting on crypto assets are increasingly suffering from the price decline. A few weeks ago, a slump in the price of an Internet currency that was actually designed as stable, the so-called stablecoin TerraUSD, had already caused a big stir.
Crypto expert Timo Emden from Emden-Research also cited technical trading reasons for the renewed price slump. “The comparatively low trading volume over the weekend could have triggered the downturn,” it said in a comment. “If a larger quantity is thrown on the market, this can trigger a domino effect and trigger further sales. Explosive price movements are then possible quickly.”
The Bitcoin and other digital currencies are traditionally subject to strong fluctuations, in recent years there have already been several so-called “crypto winters”, for example in 2014 and 2018, in which prices fell sharply before later rising again. This time, however, an even more difficult economic environment is emerging than then.
