Crypto market: Concerns about Bitcoin, Ripple, Ethereum & Co. prevail

After the recent recovery on the crypto market, which brought Bitcoin to its highest level so far this year at the end of March above $48,000, investors have already lost their appetite for risk. At the beginning of the week, the price dropped well below the $40,000 mark at times, but was then able to regain it relatively quickly.

The reason for the renewed weakness, which affects almost the entire crypto market in addition to Bitcoin, is the prospect of even more decisive action by the US Federal Reserve Bank against the rapidly rising inflation. The result: riskier assets such as tech stocks or cryptocurrencies are thrown out of the depots and prices fall.

Positive industry-specific signals, which were also given at the Bitcoin 2022 conference in Miami, are hardly heard in this environment. The fact that investors are filling their pockets with large Bitcoin holdings at the current level also did not provide any impetus. MicroStrategy (see Investor Info) and the Luna Foundation Guard alone have collected thousands of bitcoins in the past few weeks. They are preparing for the time when the Fed takes its foot off the gas again. Because then, according to Mike Novogratz, head of the crypto bank Galaxy Digital, Bitcoin and Co only know one direction: “To the moon.”

In the short and medium term, however, macro factors such as interest rate and inflation concerns in connection with new highs in the correlation between Bitcoin and the Nasdaq 100 should repeatedly cause turbulence.

INVESTOR INFO

A few days after MicroStrategy secured a $205 million loan at the end of March, CEO Michael Saylor has already invested a large part of it in bitcoins. As he announced last week, MicroStrategy has acquired an additional 4,167 units of the digital currency with a total value of around $191 million. The recent acquisition brings MicroStrategy’s Bitcoin holdings to 129,218 units, which is worth approximately $5.2 billion at current prices. Courageous investors who share Saylor’s vision can put a few pieces in their portfolio – but should keep the risks and high volatility in mind.

With VanEck’s Crypto Leaders ETN, investors can bet on five of the largest, most important and most liquid cryptocurrencies – conveniently with one product that is traded on regulated securities exchanges via WKN and ISIN. The MVIS CryptoCompare Crypto Leaders Index serves as the underlying for the fully secured Exchange Trades Notes. Currently this includes Bitcoin, Ethereum, Cardano, Solana and Polkadot. The product is therefore quite interesting for investors who want to build up a small but diversified crypto position as a portfolio addition. In addition to the price risk, you also bear an issuer risk.

Image sources: Wit Olszewski / Shutterstock.com, Finanzen Verlag