After crash 2022
Bitcoin is back with a steep rise in price
01/16/2023 12:34 p.m
Over the past year, Bitcoin and other cryptocurrencies have been among the big losers in the financial markets. It wasn’t just the prices that collapsed. Bankruptcies and cases of fraud shook confidence. Since the beginning of the year, however, the original digital currency has again shown an impressive performance.
Bitcoin is back. After the original digital currency, like other crypto assets and tokens, drastically crashed in 2022, the Bitcoin price has risen by more than 25 percent since the beginning of the year. According to the coinmarketcap portal, one bitcoin currently costs just under $21,000. In the fall of 2021, Bitcoin shot up to a record price of almost $69,000. Since then, most cryptocurrencies have gone downhill. Bitcoin fell below $16,000 last December.
Cryptocurrencies and funds are among the asset classes with the best performance so far in the new year. According to financial news service Bloomberg, various crypto funds occupy all spots in the top 10 exchange-traded funds (ETF) with the best year-to-date performance. In 2022, funds and stocks with connections to the crypto industry were among the big losers of the stock market year.
The crash of cryptocurrencies last year was accompanied by the end of the low interest rate policy of many central banks around the world. This also hit other asset classes hard, especially stocks in the technology sector. However, for a few weeks now, there have been increasing signs that inflation and thus interest rate hikes may soon have peaked. For this reason, values on the stock exchange that are considered comparatively high-risk have recently been developing better again.
Spectacular bankruptcies and collapses of trading platforms and providers of decentralized financial services (DeFi) had also led to a loss of confidence in the crypto industry as a whole. After its bankruptcy, serious abuses at the crypto exchange FTX and its associated hedge fund Alameda became known. This once again made it clear that central players in the crypto scene act in a completely non-transparent manner without any control.
Critics point out that statements about the value of cryptocurrencies should be treated with caution. The courses are largely created on non-transparent, unregulated trading platforms and are not protected against manipulation. In addition, courses or the market capitalization of cryptocurrencies are usually given in US dollars. As a rule, however, the digital currencies are not paid for with dollars, but with other cryptocurrencies, such as so-called stablecoins, which have been criticized for possible manipulation.