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Bitcoin: "Confidence in the crypto industry has collapsed"
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DADO RUVIC / REUTERS
The digital currency Bitcoin has also broken through the psychologically important mark of 20,000 US dollars on its rapid descent.
At times, the oldest and best-known cyber currency only cost $18,732, the lowest it has been since December 2020.
Just over a week ago, 30,000 dollars had to be paid for one unit of the cryptocurrency.
Bitcoin only crossed the $68,000 mark last November.
Experts blame inflation concerns and rising interest rates for the downward trend.
At the same time, two prominent crypto projects got into trouble, which reduced confidence in the entire market and accelerated the descent.
First the digital currency project Terra-Luna collapsed, then Celsius – a kind of bank for transactions with cryptocurrencies – had to stop withdrawals.
"The break of $20,000 shows that confidence in the crypto industry has collapsed," market analyst Edward Moya of The Americas told OANDA.
"There are too many cryptocurrencies and crypto exchanges that are under enormous financial pressure given the cost of borrowing," he said, referring to rising interest rates.
Many small investors who had invested their money in cryptocurrencies would now be permanently scared off.
Crash to the ten thousand mark?
Jochen Stanzl, chief market analyst at CMC Markets, referred to a general sell-off in the risk markets just a few days ago.
If Bitcoin does not rise back to just under $33,000 at the end of the month, there is a risk of another crash down to the ten thousand mark from a technical point of view.
Bitcoin and other digital currencies are traditionally subject to strong fluctuations. In recent years there have already been several so-called crypto winters, around 2014 and 2018, in which prices plummeted before things went up again later.
This time, however, the economic environment is even more difficult than it was then.
Sol/dpa/Reuters