Bitcoin over 20,000 francs
These are the reasons for the recovery of the cryptocurrency
Bitcoin has appreciated significantly in value since the beginning of the year. Over the weekend, it surpassed $20,000 for the first time in a long time. According to experts, the reason for this is more confidence in the markets, triggered by falling inflation in the USA.
Published: 16 minutes ago
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Updated: 14 minutes ago
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Bitcoin topped $20,000 this weekend for the first time since August.
The last year was overshadowed by crises – especially in cryptocurrencies. While Bitcoin was still worth almost $70,000 towards the end of 2021, the value fell below the $20,000 mark in 2022. The bankruptcy of the formerly largest crypto exchange FTX and the turnaround in interest rates due to rising inflation also put a lot of pressure on the price. Critics even spoke of the end of the crypto boom.
But in the last few days, bitcoin has recovered slightly. For the first time since August last year, the well-known cryptocurrency has exceeded the $20,000 mark.
What led to the recovery? And what’s next for cryptocurrencies this year? Blick provides an overview of the most important questions.
Why is bitcoin recovering now?
The $20,000 mark doesn’t sound like a milestone when you know the heights at which the cryptocurrency was once traded. Nevertheless, the pioneer of crypto coins has gained almost 25 percent since the beginning of the year.
According to experts, this is mainly due to significantly more optimism on the markets. Many investors expect that the US Federal Reserve will get inflation under control and will therefore raise its key interest rate in 2023 much more slowly than before. This not only helped the exchanges get off to a good start in the new year, but also the cryptocurrencies.
Another reason is that many investors have bet on a further fall in the Bitcoin price. Now you can see that the price is more likely to be recovering. Hence, these investors are now forced to buy bitcoins to recoup their losses. This additionally supports the course of the cryptocurrency.
What’s next for Bitcoin 2023?
This remains difficult to assess. Experts expect that the current recovery of the crypto pioneer is mainly due to technical reasons and should therefore be understood more as a flash in the pan. Private investors are warned not to jump on the Bitcoin price train too soon.
Only after the price exceeds $ 25,000 again do the experts see Bitcoin as finally over the mountain. Until then, anything can happen. Both a further recovery is possible, but also a renewed collapse of the course.
Does the jump in price rub off on other cryptos?
Other cryptocurrencies performed differently. The decentralized cryptocurrency Ethereum, for example, made a similar jump in price as Bitcoin. This is after the price plummeted after the FTX bankruptcy in November.
Other smaller cryptocurrencies have fared less well. Some have also been able to make up some ground since the beginning of the year. Others stagnated or lost value.
It is therefore still very difficult to assess how cryptocurrencies as a whole will develop. But one definitely cannot speak of a cross-industry upswing at the beginning of the year. (shq)