Everyone knows that the life of those who invest in cryptocurrencies is a constant adventure. This is said, because just as one day the currency is super high, the next it can suffer a terrible fall. An example of this is Bitcoin. And much of these cryptocurrencies’ slump has to do with tech stocks that plummeted last week. Despite this, it is seen that Bitcoin and other cryptocurrencies have everything to grow.
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Bitcoin crash follows decline in tech stocks
Last Monday (24), Bitcoin lost 4.3%, falling below the level of $ 34,000. Next came Ethereum (-6.8%), which fell to its lowest level since July 2021. Solana’s SOL cryptocurrency also dropped 19% and Cardano’s ADA 13%.
In short, for analysts, the selling pressure revolving around cryptocurrencies stems from traders’ perception that the US central bank, the Federal Reserve (Fed), should take a more aggressive stance on interest rates. Therefore, this should lead to a triumphant exit of risky assets.
According to Coindesk editor-in-chief of global capital markets, Lawrence Lewitinn:
“A combination of global risk appetite and a lot of market dynamics in China (and the consequences of restrictions in the country). The influence of these factors is not stationary, but it is a better explanation than every Federal Reserve (Fed) action.”
He also mentions that, “not just Bitcoin, but any cryptocurrency, is a bet that the technology will be adopted by more users.” However, the great asset of the cryptocurrency world must be the growth of digital currencies, since Bitcoin “it would hold at least 40 million balances (accounts), a number 198 times smaller than that of the world population”evaluates Lewitinn.
Finally, among the causes of this violent volatility of cryptocurrencies, Lewitinn cites the regulation of the technology sector in China by the government of Beijing, which led to the loss of strength of Bitcoin.
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