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Bitcoin symbol in front of a cryptocurrency exchange office in Pristina (Kosovo).
In the second week of January, police in Kosovo reportedly seized hundreds of cryptocurrency mining machines
Photo: ARMEND NIMANI / AFP
Bitcoin fell below the $38,000 mark on Friday afternoon (CET), the lowest level in over half a year. The minus of the best-known cyber currency was around 9 percent at its peak, since its high in November, Bitcoin has lost around 40 percent. Other digital currencies also fell significantly: Ethereum fell below $3,000 and lost around 11 percent at its peak. On the Coinbase crypto exchange, the prices for Solana, Cardano and Binance Coin also slipped in double-digit percentage terms.
While the market value of the approximately 17,000 cryptocurrencies was around $2.9 trillion last November, it is currently around $1.8 trillion. The sell-off in technology stocks across the board, increasing regulatory threats and concerns about tighter US monetary policy have accelerated the price slide in digital assets in recent days, according to Bloomberg.
With inflation galloping as a result, the US Federal Reserve will probably raise interest rates at least three times this year.
Some market observers are even expecting four rate hikes and are not ruling out a large rate hike of 50 basis points in March.
At the same time, the Fed is reducing its bond purchases, gradually reducing its inflated balance sheet.
In doing so, it withdraws liquidity from the markets, which restricts speculative transactions.
Speaking of regulation, the UK, Spain and Singapore have all announced tightening rules on crypto asset advertising to better protect novice investors.
It also became known that the Central Bank of Russia is considering a complete ban on cryptocurrencies on Russian territory.
Rumors of Russian mining bans, the impact of tapering programs and ongoing regulatory concerns in certain countries are currently heavily affecting cryptocurrency trading and investing, admitted Bitcoin chief analyst Jason Deane of Quantum Economics, a digital asset analytics firm.
At the same time, however, the use of Bitcoin is increasingly gaining acceptance, especially in countries with high inflation, he said.
Unregulated cryptocurrencies are a thorn in the side of many central banks.
On the one hand, because they are beyond their control and are therefore often used for criminal transactions and money laundering.
On the other hand, digital currencies are extremely volatile.
Against this background, central banks around the world are also examining the introduction of their own digital central bank currencies, so-called Central Bank Digital Currencies (CBDC).
The projects of a digital dollar, euro or a digital Chinese yuan have not yet progressed particularly far.
Beijing wants to test the latter as a possible means of payment among athletes and guests at the Winter Olympics.
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