Monday, May 24, 2021
Worry about the US Treasury and China
Crypto roller coaster continues
After the at times dramatic price plunge last week, the digital reserve currency Bitcoin has recently been on the up again. However, the record high of mid-April is a long way off. Recently, there has been several bad news from the US and China for Bitcoin fans.
After the downswing on the weekend, the cryptocurrencies have increased significantly again. A Bitcoin, the best-known and largest digital currency in terms of market share, cost just under $ 37,000 in the early afternoon on the Bitstamp trading platform, around 10 percent more than 24 hours earlier. Other digital currencies such as ether also jumped up again on Whit Monday – in some cases much stronger than Bitcoin. In the past week, Bitcoin briefly fell to $ 30,000 on Wednesday, but was able to recover somewhat in the days after. Since the record high of just under $ 65,000 in mid-April, it has fallen by almost half.
Despite the heavy losses in recent weeks, Bitcoin still costs almost four times as much as a year ago. The massive fluctuations show the dilemma of the market for digital currencies – it promises high profits on the one hand, but immensely high risks.
Experts cited news from China as an important reason for the recent price slide. The government reiterated an earlier announcement to crack down on cryptocurrency manufacturing. The generation of digital currencies is also called mining and consumes enormous amounts of electricity to produce them. Previously, Tesla boss and crypto advocate Elon Musk had already caused the market for crypto currencies to be agitated several times. Musk seemed to indicate that the electric car manufacturer Tesla could sell its Bitcoin holdings. Musk quickly denied it, but the price movements in Bitcoin were enormous.
Another stress factor came from the USA last week. On Thursday evening, the US Treasury Department announced that it was considering reporting crypto transactions of more than $ 10,000 in order to ensure tax compliance. If the project is implemented, it would be a blow to the anonymity of transactions, which is so valued by crypto fans. The background to the current upward trend could be bargain hunters who consider the negative reactions to the various events to be exaggerated. The crypto market is known for sudden and violent movements.
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