On the crypto platform Coindesk, bitcoin even briefly fell below $36,000 on Friday with a plunge of more than 9% to the lowest level since the end of January. From the annual high at $47,000, the digital currency is facing a loss of more than 20%.
After a strong recovery movement started in March, things started to deteriorate again from April. The monetary policy of the US central bank (Fed) plays a major role in the ongoing downturn. The Fed’s retreat, including recent rate hikes, has brought an end to the era of ‘free money’. In recent years, the very low interest rates also provided the impetus to embrace digital currencies en masse.
Regulation
In addition, the proposed regulation by central bankers still hangs over the crypto market. The European Central Bank (ECB) in particular has worked hard for this. A member of the ECB recently emphasized that digital currencies must be restricted worldwide to prevent systemic risks. Republicans and Democrats in the US have also been arguing about legislation for crypto coins for some time.
At the end of last year, bitcoin was still solidly on the rise, tapping a preliminary all-time high of just below $70,000. During that period, the digital currency benefited from the well-received introduction of a listed exchange fund that follows the development of bitcoin without investing directly in the crypto currency.