The two major cryptocurrencies Bitcoin and Ethereum broke below the all-important $ 20,000 and $ 1,000 thresholds yesterday. Explanations for this range from pessimistic market participants to interventions against cryptocurrencies to the latest interest rate hike by the US Federal Reserve. Read more about this below.
Cryptocurrencies are a controversial topic not only in hardware forums and among PC gamers, but also across much of society. While some are convinced of the possibility of creating money without any physical equivalent and spend huge amounts of electricity to do so, others criticize the same approach, especially considering the current political environment and the tense energy market. In recent months, however, the prices of the key currency Bitcoin and also the Ethereum currency, which is largely responsible for the shortage of graphics cards, have dropped dramatically.
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Another psychologically important threshold was crossed yesterday and prices have again dropped dramatically. After Bitcoin had already dropped sharply earlier in the week, the price seemed to stabilize again over the course of the week, but in the morning the price dropped by around ten percent and thus below the all-important $ 20,000 mark. With a price of around 19,000 US dollars, the key cryptocurrency is trading at the lowest levels of last December 2020.
The same is true in principle for Ethereum. After trading above $ 4,000 per ether in December, the currency has dropped sharply since then and broke below $ 1,000 around noon yesterday. Meanwhile, the price has dropped to US $ 936. Ethereum had triple-digit prices for the last time in early 2021, when graphics cards were still affordable.
Industry experts are uncertain about the current state of the cryptocurrency market. Some now see the bottom, while others predict an acceleration in bearish trends. The likelihood of a rapid recovery is highly unlikely due to pessimistic market participants and macroeconomic interventions such as the US Federal Reserve’s 0.75% hike in key interest rates. The key interest rate in the major US market is already between 1.5 and 1.75 percent and is expected to rise to 3.4 percent this year to stop inflation.
Source: The shareholder and ARD