The Bitcoin’s value plummeted more than a third compared to January 1 last year. The other cryptocurrencies – from Ethereum to Solana – are not doing so well. “There’s never a single cause for such a dramatic collapse, but it certainly doesn’t help that the Fed has decided to change its strategy. zero interest policy (ZIRP)»Writes The Verge journalist Elizabeth Lopatto.

Not just Bitcoin: too Ethereum it is down about 33% compared to the values ​​at the beginning of the year. Country, a stable currency that in theory should always have a dollar value, is now trading at $0.93. Even the market for Non-functioning token is in deep suffering. This also applies to more ‘stable’ projects such as Bored Ape Yacht Club: the bottom price it dropped nearly 55% in 10 days.

Investors, Coinglass writes, have liquidated their long-term investments in Bitcoin, taking nearly half a billion of the cryptocurrency’s market cap in just 24 hours.

The US central bank has been pushing interest rates close to zero for some time to stimulate the economy. Simply put, when interest rates are that low, there’s no point in keeping the money in checking accounts because it won’t generate enough interest to keep up with inflation. In this scenario, even traditionally considered safer assets (such as bonds and government bonds) become dull

explains the reporter.

So the market starts betting on a lot of things… weird. From SPACs to stock memes, as well as NFTs. After all, why not. There is so much money that the riskiest assets end up offering high returns. Some people also really like these investments. After all, that’s what the gambling industry is all about

Now that the music has stopped, more than a few players are without a seat. The zero interest policy is over. Last week, the Fed raised interest rates by 0.5%, the highest rate since the early 2000s. Not only that, the central bank has also almost announced its intention to raise interest rates further.

And then everything else: the war in Ukraine has created a new climate of mistrust and uncertainty. “It’s true, in theory Bitcoins are independent of central banks, but investors… no,” concludes Elizabeth Lopatto. “If they want to lower their portfolio’s risk rate, Bitcoins will be one of the first things they’ll sell.”


Source: Lega Nerd

Previous articleTinder against Google: ‘Commissions on Android too high, the Play Store is an illegal monopoly’
Next articleMercedes-Benz has already sold all electric cars planned for 2022

LEAVE A REPLY

Please enter your comment!
Please enter your name here