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Dhe fear of an end to the US Federal Reserve’s ultra-loose monetary policy has been one of the major stress factors for the crypto market in recent months – after all, Bitcoin and Co have previously benefited massively from the excess liquidity on the global markets. When Fed Chairman Jerome Powell actually heralded the turnaround in interest rates this week with a first key interest rate hike of 0.25 percentage points to 0.25 to 0.50 percent and announced an increase to 1.9 percent for the rest of the year, the interest rate fell Price reaction but comparatively positive.
Significant gains were already being made on the crypto market in the immediate run-up to the interest rate decision, and some of them were then expanded. After Bitcoin had hovered around the $39,000 mark in the previous few days, it jumped from zero to around $41,500 on Wednesday – and was then able to establish itself well above the $40,000 mark.
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Even Bitcoin bulls like Mike Novogratz from the crypto bank Galaxy Digital have doubts that this will develop into a new strong rally in the short term. In view of rising interest rates, he stuck to his forecast that the leading digital currency would fluctuate between 30,000 and 50,000 dollars over long stretches of the year. The Galaxy CEO blames macro factors such as further rising interest rates or the geopolitical risks from the Ukraine war for the fact that volatility will remain high for the foreseeable future. At least the regulatory risks have recently decreased on both sides of the Atlantic.
INVESTOR INFO
The US payment processor Square changed its name to Block in December 2021 – a nod to the fact that blockchain technology, which underlies cryptocurrencies such as Bitcoin, will play an even greater role in the future. But Block has been active in this area for a long time. US users of the finance app Cash have been able to trade selected coins for years. In addition, Block itself has 8,027 Bitcoins on its balance sheet as a long-term financial investment. After the deep fall in the difficult environment for tech and crypto stocks, the brave can speculate on a comeback here.
With a plus of around 360 percent over the last twelve months, Terra is one of the top performers on the crypto market. Although the coin cannot completely escape the mixed overall market at the moment, it is the only one in the top 10 according to market cap that has had a positive performance since the beginning of the year. According to the Bitcoin Report’s TSI system, Terra continues to shine with unbroken trend strength. While this is no guarantee, it is at least an indication of further price gains. However, Altcoins like Terra are only suitable as a highly speculative portfolio addition for investors who are very willing to take risks.
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Image sources: Wit Olszewski / Shutterstock.com, TierneyMJ / Shutterstock.com, Finanzen Verlag
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