Thus, the first digital currency in terms of market value has fallen 50 percent since it recorded its highest level in November. The collapse in the value of digital currencies has coincided with the collapse of stock markets around the world in recent days. This is stated in the message “BBC”.
Indices have fallen again on some Asian sites today. The value of “Bitcoin” is approximately one-third the value of digital currencies worldwide, totaling approximately $ 640 billion.
After Bitcoin, Ethereum is the second most important digital currency in the world. Its value also dropped more than 10 percent last week.
The volatility in the cryptocurrency market is not surprising, even though the market is relatively stable for most of 2022.
For many years, crypto trading has been dominated by individual investors, but recently, the market has seen an influx of professional investors such as hedge funds and financial investment firms.
As more and more traditional investors are trading digital currencies, the influence of these currencies on the movements of the global stock market is increasing. Some institutional investors view the cryptocurrencies they buy as “risk assets” similar to technology stocks.
During times of market uncertainty, traditional investors typically sell what they think are more risky assets and shift their money to safer investments.
Last week, central banks around the world, including the US, UK and Australia, raised interest rates in an attempt to curb rising prices. The US Federal Reserve raised interest rates by half a percentage point, the highest level in more than 20 years.
The move has sparked investors ’fears that inflation and high interest rates will affect global economic growth. The war in Ukraine has also raised investor concerns about the global economy.
Source: Al Akhbar
