Letters: Up and down for the Bitcoin world
[Re: Bitcoin slips to three-month low as interest rate rises hit financial markets, yesterday]
Over the weekend, the value of Bitcoin has reached new lows of £27,630, meaning the market value has now fallen by 50 per cent since its peak in November 2021.
Whilst investors shouldn’t be too taken aback by the fall, given the recent drop in stock markets around the world, there are growing concerns that Bitcoin will continue to fall. This slump may therefore cause concern since Bitcoin holds a large influence within the cryptocurrency ecosystem, accounting for around a third of the market.
Yet the cryptocurrency market remains renowned for its volatility. Volatile trading in digital assets has not been that unusual in previous years. With cryptocurrency fast gaining legitimacy in the financial world and rising in popularity amongst hedge funds, we should expect to see cryptocurrencies increasingly mimic the movements of global stock markets.
Bitcoin is not immune to the global inflation risk spreading across most other asset classes therefore we should expect to see the downward trend continue over the course of the next few days.
However, investors should note the momentum crypto has generated around the world, including becoming legal tender in El Salvador and the Central African Republic, as well as the UK’s plans to make the country a crypto asset hub to solidify its position on the global financial stage post-Brexit.
Michael Kamerman