Tech

Bitcoin falls below $27,000 – Ether below $2000






Rising key interest rates, inflation, war, stablecoins falling into the abyss: The crypto market is not having an easy time at the moment.

Update from May 12, 2022:

Cryptocurrencies continue to plummet. At times, the most popular cryptocurrency, Bitcoin, fell below $27,000, which is also dragging on the prices of other cryptos, as Spiegel reports.

Within just a month, Bitcoin has already lost almost a third of its value. On the Bitfinex trading platform, bitcoin recently fell to a value of 26,591 US dollars, its lowest level since the end of 2020. And the next most popular cryptocurrency ether is not stopping its descent and is currently at a value of less than 2000 US dollars and has thus already lost half of its value since the beginning of the year.

Of course, the price low of Bitcoin and Ether also affects most of the other cryptocurrencies. The market value of all cryptocurrencies is currently around 1.18 trillion US dollars. The record value of almost $3 trillion reached in November 2021 is a long way off.

TerraUSD is causing new turbulence in the crypto market

The well-known crypto currency TerraUSD (UST), which was considered a stable coin, caused further turbulence in the last few days. These coins get their name because they don’t actually fluctuate that much and the value is stable and linked to a common key currency. In the case of TerraUSD to the US dollar, the coupling of the value is achieved with this coin via algorithms.

TerraUSD lost over 70 percent of its market cap in just seven days and consequently its peg to the US dollar, adding to market uncertainty and now believed to be partly responsible for the current bitcoin crash. In addition to war, rising key interest rates and inflation, this also has a negative effect on all cryptocurrencies.

Market observers even fear regulatory consequences for stablecoins – especially for those that, like UST, are algorithmic coins and are not backed by real assets.

Original News May 10, 2022 – Crypto Prices Plunge 15 Percent:

After the Bitcoin price had leveled off at around 40,000 US dollars in recent months, the crypto currency recently suffered a price drop of around 10,000 US dollars. The Ethereum course shows a similar kink. It seems that cryptocurrencies are suffering the same fate as stock prices.

50 percent loss within half a year

The price of Bitcoin fell by around 14 percent, that of Ethereum even dropped by 15 percent. For Bitcoin, whose value is now just under 32,000 euros, this is the lowest price since July last year. Remarkable when you consider that the cryptocurrency reached its all-time high of over 65,000 euros in November 2021 – a loss of more than 50 percent within half a year.

The Ethereum price fell from around 2800 to below 2300 euros – Ethereum also peaked in November 2021.

War, inflation and rising interest rates are troubling cryptos

The price losses are probably closely related to the falling prices on the stock exchange, especially when the prices of technology companies suffer a low, it also hits the cryptocurrencies. After the interest rate hike in the USA, there was severe turbulence on the stock exchanges. The Dow Jones lost around 1000 trading points and the technology-heavy Nasdaq also closed the trading day with a minus of around 5 percent.

When interest rates rise, less risky alternatives to cryptocurrencies – such as bonds – become more attractive again. As a result, a reallocation of capital is also taking place, this time affecting cryptocurrencies as well.

Also interesting:

Steam: 50 percent of bitcoin transactions were fraudulent

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