Cryptocurrencies are falling due to the tightening policies of the Reserve Bank

 Cryptocurrencies have been plagued by volatility in recent weeks, with all major cryptocurrencies dropping during the early hours of Monday causing the entire market to trade in the red.

Bitcoin traded below $39,000 after more than a month down by 1.87% over the past 24 hours, but quickly bounced back to trade above $39,000. Also, by 2.40% over the past 24 hours, it stood at $3,018.45.

Today's data showed that Cryptocurrency market The global has also fallen by 2.32% in the past 24 hours with a total market capitalization of $1.80 trillion, as data indicated that bitcoin reserves on exchanges continue to dwindle and are actually at a record low.

What is the reason for the decline of Bitcoin at the moment?

Many analysts believe that the market decline comes in conjunction with the hawkish statements of Federal Reserve Chairman “Jerome Powell” and the intention of the US Central Bank to be aggressive to tackle inflation, these measures pushed all major cryptocurrencies to lose their value, as the top 10 tokens were traded in the color the Red.

One analyst says the risks of rising borrowing costs and a possible economic recession make safe havens an attractive bet and thus investors are staying away from risky assets, especially after the hawkish comment from Federal Reserve Chairman Jerome Powell has weighed on crypto markets, and the Fed is expected to be assertive. Proactively address rising inflationary numbers.

Overall, cryptocurrency exchanges are witnessing heavy selling as the market continues to weaken, and the decline in the bitcoin price is likely to be caused by traders taking profits for bitcoin which rose above $42,000 earlier yesterday.

Investors prefer digital currencies over traditional markets

Meanwhile, a report by data analytics firm Chainalysis found investing in cryptocurrency to be risky but profitable, with cryptocurrency investors worldwide earning a total of $162.7 billion in 2021, an increase of 400% from 2020.

According to the report, the United States leads with a large margin estimated at $47 billion in cryptocurrency gains, followed by the United Kingdom, Germany, Japan and China, meanwhile, India ranked the lowest with a gain of around $1.85 billion.

The report highlights that Ethereum outperformed Bitcoin in total gains globally at $76.3 billion to $74.7 billion. We believe this reflects the increased demand for Ethereum as a result of the rise in DeFi in 2021, as most DeFi protocols are built on the Ethereum blockchain, and use Ethereum. As a base currency, while most countries follow this pattern, there are some notable exceptions. The company said in its report that Japan, for example, had a much higher share of Bitcoin's gains of less than $4.0 billion compared to just $790 million in Ethereum's gains. .

It is a great encouragement for the crypto community around the world to see crypto investors have made significant profits by placing their trust in crypto assets, the increase from profits of $32.5 billion in 2020 to $162.7 billion in 2021 is attested to the fact that during the second phase of the Pandemic investors have chosen the cryptocurrency market over traditional markets to beat inflation and create wealth in times of crisis.

• Author
• Recent Posts

Mohamed Abdel Khaleq

A professional technical and economic analyst in global financial markets since 2004. He holds a Master’s in Business Administration from the American University in Cairo. He works as an economic writer and technical analyst for many international financial companies. He writes daily economic and technical analyzes for many Arabic and English websites specialized in the field of stock exchanges and financial markets.

Latest posts by محمد عبدالخالق (see all)

• الدولار الأمريكي يمحو إلى حد كبير مكاسب 2024 وسط التوقعات بخفض أسعار الفائدة الفيدرالية - 17 September, 2024
• Rare currency pairs in the Forex market - May 26, 2023
• Key tips for traders in Forex Market - April 20, 2023