Madrid, May 8 (Latest) .- Six months ago bitcoin, the best-known cryptocurrency in the market, reached its intraday record highs at $68,991, but since then it has fallen by almost 50% in a context of tightening monetary policies to combat high inflation.
According to market data consulted by Efe, bitcoin fell 49.92% this Sunday at 10:30 a.m. GMT from its maximum recorded on November 10, 2021, to $34,550.
Since the beginning of the year, this cryptocurrency has experienced a downward trend, with a decrease of 25.4% (it closed 2021 at $46,333.65), in a few months that have been conditioned by the geopolitical tensions derived from the Russian invasion of Ukraine and the high inflation.
As a consequence, the central banks have changed their monetary policies, which have become more aggressive in the case of the US Federal Reserve (Fed), which has already made two interest rate hikes, the last one last Thursday with an increase of half a point, and more lax in the case of the European Central Bank (ECB) which, although at the moment it has not set a date for rate increases, has toughened its speech and commented that it will begin to withdraw the stimuli enabled by the pandemic.
The director of Coinmotion for Spain, Raúl López, has considered that the Fed’s announcement about the increase in its rates put the markets on alert and “possibly” led to the loss of value of cryptocurrencies.
With the Fed’s first rate hike this year, which took place on March 16, Bitcoin fell back slightly, but reached a high of $47,967 by the end of the month. However, when on April 6 the minutes of this organization anticipated a possible more aggressive rise of half a point, this digital currency fell by 4.32%.
Last Wednesday, the Fed applied its second increase and since then the most popular cryptocurrency has lost a little more than 13%. That day it closed at $39,800.
According to analysts consulted by Efe, the loss of value of bitcoin and its extreme volatility in recent months has responded to various factors, in addition to the hardening of the central banks’ discourse.
Raúl López explained that geopolitical tensions, such as the war in Ukraine, and health tensions, such as the appearance of the omicron variant of coronavirus at the end of November 2021, have influenced its price.
He has also argued that the European Commission’s MiCA proposal to regulate the cryptocurrency market generated “some fear in the markets.”
HISTORICAL HIGHS OF BITCOIN
Since the end of 2020, the price of bitcoin has experienced an upward trend and soared from $10,000 to over $60,000 in the second quarter of 2021. Although it subsequently had a small correction, at the end of the year it recorded its all-time highs that were close to $69,000 .
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