[kanews-alert color=”bg-dark” ] This is what it’s all about
• Digital currencies is in a nosedive.
• The reason for this is monetary policy in the US.
• What happens next and whether investments are now worthwhile, answers 20 minutes in the most important questions and answers.[/kanews-alert]
The crypto world is seething: Since November, the market around Bitcoin, Ether, Dogecoin and Co. has lost a total of almost one trillion dollars. At the beginning of the week, Bitcoin even plunged below the 40,000 dollar mark. In the meantime, the price has recovered somewhat and stands at around 43,000 dollars.
But the mood remains tense. What is the reason for this and where does this development still lead? 20 Minuten answers the most important questions and answers.
Why are cryptocurrencies plummeting right now?
The main reason is monetary policy in the US. Given the high inflation in the country, the US central bank wants to raise interest rates. The investment bank Goldman Sachs expects four rate hikes this year. This makes investors nervous: “The general nervousness on the money and stock markets is having a direct impact on cryptocurrencies,” explains Daniel Diemers, blockchain expert at SNGLR Group. This is because cryptocurrency is considered risky and is now being dumped by many.
Where do things go from here?
There are two scenarios, says blockchain expert Diemers: “A so-called crypto winter would bring us lower prices for a longer period of time.” Bitcoin could then fall far below $20,000 and stay there for over a year. A more optimistic prediction assumes a brief breather, he said. After that, bitcoin could reach new record highs of $100,000. “However, it is possible that the momentum around NFTs and Metaverse will also pull crypto prices up. After all, you have to buy cryptos to be in NFTs and Metaverse,” Diemers said.
How realistic are new record highs?
With the entire economy in an uptrend, all the basic conditions for a recovery are in place, he said. “If the stock markets go up, that also gives the crypto market a boost.” This is because the two systems are now firmly linked and influence each other. Thus, cryptocurrencies could write records again in just a few months.
Should I strike now and buy cryptocurrency?
In principle, it is worth buying cryptocurrencies when they have reached a low level. However, crypto money always fluctuates greatly. “So you should never invest more than you can handle even in the event of a total loss,” Diemers said. This is especially true for people who do not have much experience with crypto trading, he said: They should therefore also not get into debt under any circumstances, advises the expert.
Who suffers most from the price crash?
It hits new investors particularly hard. Those who have been around for a while are relaxed about the whole thing. “After all, bitcoin sank to $5,000 1.5 years ago,” says blockchain expert Diemers. Those who got in in April and September 2021, when bitcoin was at around $60,000, are now unsettled, he says. “But I don’t think that’s a very large group,” Diemers said. Crypto investments should only be assessed after a few years anyway, the expert advises. For short-term investments, the price of crypto-money fluctuates too much, he said.
[kanews-alert color=”bg-dark” ]This is a bitcoin
The founder or the founder of Bitcoin is called Satoshi Nakamoto. To date, it is not known exactly who Nakamoto is. The pseudonym could also be the name of several developers who are jointly behind Bitcoin. The cryptocurrency was first outlined in a white paper on October 31, 2008 – shortly after the collapse of the US investment bank Lehman Brothers. Behind Bitcoin is the idea of a currency that exists independently of states, central banks and monetary policy. Unlike traditional currencies, Bitcoin has no central authority that controls the means of payment. Transfers in Bitcoin are validated by a globally distributed computer network instead of banks and financial service providers, which is openly accessible to all.[/kanews-alert]