The rise in the crypto market continues. Bitcoin is above $60,000 and could soon reach a new record high. Even a glitch on the Coinbase platform couldn’t change that.
The rally in cryptocurrency markets continues. After the largest and oldest digital currency, Bitcoin, reached a new two-year high yesterday, Ether has now also climbed to its highest level since 2022.
The second-largest cryptocurrency by market value also rose today by almost five percent to a two-year high of $3,485. Bitcoin rose similarly and was at times trading at $63,483, only around 14 percent below the record high of almost $69,000 at the end of 2021.
Bitcoin halving and stock rally as price drivers
Yesterday, Bitcoin continued its rally that had reignited at the beginning of the week and rose above $60,000 for the first time since November 2021. At its peak, the cryptocurrency was even worth $64,000. Since the beginning of the year, Bitcoin has temporarily increased by more than half. It wasn’t until mid-February that he cracked $50,000.
“The number one driving force remains the approaching Bitcoin halving,” said crypto expert Timo Emden from Emden Research. This is an event in April where the reward for verifying Bitcoin transactions will be halved. As a result, the supply of Bitcoin grows more slowly, which has usually led to price gains in the past.
Emden also referred to the ongoing record hunt on the stock markets, which is luring investors into riskier assets. “The record spark on the global stock markets has now spread to Bitcoin and Co.,” he emphasized. In addition, Bitcoin’s approaching record high is also attracting interested parties. “Investors are in peak fever and are hungry for new record levels.”
Coinbase problems only briefly cause uncertainty
After the previous high in November 2021, a steep decline began, which caused the price to plummet to a good $15,000 within a few months. The price has been going uphill for a few months now. The main reason for this is the approval of special US funds with which one can bet on the performance of Bitcoin without directly owning the digital currency itself.
Yesterday evening, problems at Coinbase temporarily slowed the rally somewhat. The digital currency lost a good $5,000 within a quarter of an hour before recovering again. The cryptocurrency exchange had reported that some users experienced errors while buying or selling and that some may have zero balance in their accounts. “Such events can lead to uncertainty, which investors usually respond to with panic selling,” wrote Emden.
However, the breakdown at Coinbase did not cause the price rally to stop. However, consumer advice centers do not recommend cryptocurrencies as an investment to private investors due to the risks involved. The main reasons are the strong price fluctuations up to a possible total loss as well as the lack of security systems.
Bianca von der Au, ARD financial editorial team, tagesschau, February 29, 2024 12:46 p.m