The value of Bitcoin reached a new low over the weekend and closed below $34000 amounting to £27630.
Bitcoins Value Has Dropped 50% in 2022. The value of Bitcoin reached a new low over the weekend and closed below $34000 amounting to £27630, according to the release of the Coinbase cryptocurrency exchange. Bitcoin is still the leading market currency. But the world’s leading cryptocurrency has dropped by 50% since the great high it experienced last November. The drop in the world’s stock market is one of the main reasons behind this fall.
On Monday, Japan’s Nikkei index went down by around 2.5% pulling the Asian markets further down. Bitcoin has a total market value near to $640billions, captivating around a third of the cryptocurrency market. While Ethereum ranks the second-highest in this list, it has gone down more than 10% in the last week, taking the crypto market down to its newest low.
Cryptocurrency in 2022
2022 has relatively been quiet for the cryptocurrency market as the trading of volatile digital assets has become a common trend since last year. The Crypto market has mostly been the hub of single players but the recent trends have transformed and invited more professional players (investors) into the market. Many money managers and hedge fund managers have been interested and seen trading in digital assets and cryptocurrency. Due to this increasing trend of traditional investors entering this relatively unconventional market, cryptocurrency markets have been seen to follow the global market movements.
Numerous institutional investors that have acquired the cryptocurrencies are entering the market but still treating these assets as risk assets and giving them the same treatment, that technology stocks receive on the company’s balance sheets. Thus, these assets can be sold instantly the moment the markets go into turmoil deeming them as the riskier asset allowing them to use the sale to proceed with considerably safer assets.
Central banks of the leading economies, including the UK, US, and Australia, have raised their interest rates to tackle the inflation in the economy. The US federal reserves have raised its key lending rate by 0.5%, making it the highest rate in more than the last 20 years. This rising cost of borrowing will have a great impact on global economic growth, triggering major concerns among investors. The war on Ukraine has further fueled these concerns.
Future of Bitcoins
Cryptocurrency is entering the traditional economy markets and is being accepted as a legal currency. The digital currency that was once deemed as the currency of the dark markets, has become legal in two countries last year – The Central Republic of Africa and El-Salvador. IMF has urged El-Salvador to reserve since the country has allowed the consumers to pay with cryptocurrency along with the US dollar since 2021.
Also Read: What Can You Buy with Bitcoin?
While the leading economies have started considering the presence of cryptocurrency, leading brands are not behind in the race to greet the digital currency. Mastercard, AXA Insurance, Microsoft, Tesla, and many more are already allowing their customers to pay them using cryptocurrency. Recently Gucci has announced as well that it will be accepting payments in cryptocurrency in a few stores in the US.