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Bitcoin has rallied strongly this year.
Milena KalinEditor Economics
Bitcoin has had an impressive price rally since the beginning of the year. Its value is currently over 23,000 dollars, even scratching the 24,000 mark at the weekend.
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The key crypto currency rose by more than 40 percent in January – and thus had the best start to the year since 2013. At that time, Bitcoin was still in its infancy and traded for a mere $15.
“Trust in Bitcoin was not lost,” says crypto expert Rino Borini (49) to Blick. The macroeconomic environment has improved. According to Borini, many may have used the low price as an opportunity to become investors.
Other cryptocurrencies are also making significant gains this January. Ethereum is up over 30 percent since the beginning of the year and Cardano even over 55 percent.
Resistance at $25,000
Now the question is, is bitcoin actually recovering from last year’s crash? It is necessary to overcome the limit of 25,000. The course often encounters resistance.
The interest rate decision by the US Federal Reserve could provide answers. On Wednesday, February 1st, the time has come. Experts are optimistic that the central bank will raise interest rates more slowly in 2023 than before. The European Central Bank follows the next day. When interest rates rise less, investors are happy.
Of course, no rising or even falling interest rates would be even better for female investors. However, the economic situation is still too tense for that: Although inflation has fallen, it was still 6.5 percent in the USA in December. In Switzerland, inflation was 2.8 percent.
If interest rates rise more sharply than expected, this could lead to uncertainties on the market. “Then the Bitcoin price would fall again,” says Borini.
More clarity around FTX
However, the fact that liquid funds were still found at the bankrupt crypto exchange FTX speaks for a further recovery of the Bitcoin. The collapse of FTX was the trigger for the sharp fall in the price in November 2022. The list of creditors extends to Switzerland.
According to Borini, the big crash seems to be over now. “It can still hit individuals, but we now have much more clarity than we did two months ago,” says Borini.
It is also positive that the world’s largest crypto exchange Binance seems to be doing well. Binance wants to increase the number of employees by 15 to 30 percent this year. The company currently employs almost 8,000 people.
Not so with Bitcoin Suisse: the Zug-based crypto financial service provider feels compelled to cut jobs this year. It is not yet known how many of the more than 200 employees will have to leave. The reason for the step is the “currently challenging, volatile market situation”.
Long term: growth in sight
Nevertheless, Borini is positive about the future of bitcoin. It could still come to stronger price declines. After all, Bitcoin is more volatile than other forms of investment.
“I always say that if Bitcoin takes two steps forward, it also takes a big step back,” says the crypto expert. In the long term, however, he only sees one thing: growth.
Bitcoin prospects should currently use the time to acquire knowledge. “Now is the right window to get in,” says Borini. Not only when the course reaches new heights again.
However, he warns that this only applies to those interested who have understood what is at stake. “You have to be able to deal with strong price fluctuations – in other words, have strong nerves.”