The bitcoin lost its profits in recent months in May and this Tuesday its price fell below 30,000 dollars, as part of a market trend away from risky assets due to the uncertainty of the war in ukraine.
Bitcoin, which is the main cryptocurrency in the world, based on market value, depreciated to $29,764 on Tuesday, falling to a level not seen since July 2021.
This level implies a loss of 57% of its value compared to the record reached by prices in November 2021.
This fall implies that most of the funds and people who invested in bitcoin in recent months are at a loss.
The other cryptocurrencies were also not immune to the trend and the market as a whole was valued at about $1.5 trillion compared to a level of $3 trillion invested at the height of this sector’s heyday, according to data from Coingecko, which records more of 13,000 cryptocurrencies.
The decline of the sector is linked to the prudence of investors due to the fear related to the war in ukrainethe lockdown in China and the adoption of a restrictive monetary policy in USA.
This trend also affects the stocks of technology companies, whose performance has benefited from expansionary monetary policies during the pandemic.
“The correlation of bitcoin with the Nasdaq”, the American stock market index of technology “is at its maximum”, highlighted the specialist blockchain analysts of the Kaiko portal.
Given the volatility of crypto assets, it is difficult to project what the evolution of bitcoin will be.
In 2021, bitcoin temporarily fell below the $30,000 mark in June and July, before picking up steam again to hit its all-time high in November at $69,000.
El Salvador remains confident
An indication of the importance of this sector was that in recent years two countries, The Savior and the Central African Republic they adopted this currency as their official currency, despite harsh criticism from international financial organizations.
The president of El Salvador, Nayib Bukeleannounced that the country took advantage of the decline to buy more cryptocurrencies, adding 500 units to its fund.
On Tuesday, the president celebrated the rise of 2.3% recorded by this asset around 09:25 GMT.
Since its creation in 2009, cryptocurrency has developed in a context of interest rates ultra low.
Now, the US issuer has warned of future increases in the guide rate to curb inflation.
“Temporary rallies are possible, but as long as the yield on government bonds and the dollar continues to rise” due to the Fed’s determination, “even stronger falls are the main risk” for cryptocurrencies, warned Fawad Razaqzada, an analyst of City Index.