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Bitcoin continues to fluctuate strongly:
the cryptocurrency gave way on Friday, but then recovered
Photo: JIM URQUHART / REUTERS
The digital currency Bitcoin accelerated its price slide on Friday with strong fluctuations and temporarily fell below the mark of 30,000 US dollars.
On the Luxembourg trading platform Bitstamp, it was quoted at times at 28,700 US dollars on Friday morning, before recovering again and quoted again at just under 33,000 US dollars on Friday afternoon.
The oldest and most important cyber motto was at times heading for the largest weekly loss since the stock market crash in March 2020, but was able to keep the weekly loss below 10 percent due to the catch-up in the afternoon.
At the beginning of January, the cryptocurrency had reached a record high of just under 42,000 dollars.
Most recently, the new US Treasury Secretary Janet Yellen had increased skepticism about Bitcoin.
During a Senate hearing on Tuesday,
Janet Yellen,
74, raised concerns that cryptocurrencies could be used to fund illegal activities.
"Investors fear that the US government could tighten the regulatory belt too tightly and Bitcoin and Co. could take their breath away," said analyst Timo Emden from Emden Research.
Another reason for selling, according to stockbrokers, was the warning from the research house BitMex that some Bitcoin could have been issued twice.
However, these concerns were soon allayed.
Investors were still scared of this news, said analyst Kyle Rodda of the brokerage house IG.
"You shouldn't read too much into an immature market like Bitcoin, but the dynamic has reversed."
The US investment bank JP Morgan only announced a price target of around 150,000 US dollars for Bitcoin in the first week of January, thus fueling the hype surrounding the cyber currency.
But the upper price limit for Bitcoin is limited - one of the limiting factors is the extremely high energy consumption of Bitcoin mining.
The Bitcoin boom is accompanied by significant price fluctuations, but according to market observers, it remains unbroken despite the recent setback.
Strong price fluctuations, especially on weekends
It is also noteworthy that Bitcoin has recorded the largest price fluctuations in recent times, especially over the weekends.
After the price slide on Friday, investors can now look forward to a restless weekend.
During the first weekend after Christmas and on the first two weekends of 2021, Bitcoin still had double-digit growth - to now, again in the night from Sunday to Monday, give way by more than 10 percent.
At the same time, the trading volume on the weekends is also significantly larger than on weekdays, as analyzes by the CryptoCompare service show.
Anyone who wants to speculate on Bitcoin will have to do so 7 days a week in future - the activities of professional traders on the weekends are too strong.
Since March the value has increased tenfold
Bitcoin's recent soaring is still unparalleled.
In March of last year, Bitcoin temporarily fell below the $ 4,000 mark - and has increased more than tenfold since that Corona low.
Since mid-December alone, i.e. in just over three weeks, the price has almost doubled despite the recent setback.
The year-on-year increase is more than 300 percent.
There is hardly any other form of investment currently offering such drastic price increases.
However, critics warn of exaggerations and a bubble, since such extreme price increases are rarely sustainable.
Bitcoin is the oldest and by far the best-known digital currency.
Experts had recently estimated the market capitalization to be around $ 560 billion.
For the latest soaring, however, the market repeatedly cites that the digital currency has recently moved more into the focus of large financial investors and is in greater demand.
However, experts also warn of the extreme price fluctuations that can be observed time and again with Bitcoin.
The value of the cryptocurrency more than quadrupled in the past year 2020.
Doubts about dollars and euros - does Bitcoin offer protection against inflation?
Bitcoin is also being boosted by the fact that more and more professional investors are interested in cryptocurrencies.
The interest of professional investors is often considered to be long-term, which could stabilize the very volatile Bitcoin price.
Interest in digital currencies is also being increased by the corona pandemic and the associated sharp rise in national debt.
For this reason, some investors fear rising inflation in the medium to long term, which they want to hedge against with alternative investments.
The corona pandemic and the numerous rescue programs of the global central banks are causing a flood of money and thus also strengthening interest in the alternative currency Bitcoin: Due to the extremely loose monetary policy of many central banks and the immense state aid, some investors are likely to be critical of traditional currencies see confirmed.
Whether the new types of digital currencies offer sustainable protection against high inflation rates is doubtful due to their high exchange rate fluctuations.
At least Bitcoin has built in a kind of inflation protection: The amount of Bitcoin that can be "mined" by providing computing power in the blockchain is limited to 21 million units from the outset.
The digital currency has a fixed upper limit of 21 million units in its code and a mathematically predetermined monetary policy through "halving": In this point there is a significant difference to currencies like euros or dollars, which can theoretically be printed in infinite quantities.
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