Above all, the turnaround in interest rates by many central banks is considered to be the greatest burden for young investments. For the first time in their existence, cryptocurrencies are confronted with a restrictive monetary policy. Rising interest rates are causing problems for assets that, like cryptocurrencies, do not generate regular income. In addition, technology stocks are generally suffering from the interest rate turnaround, and this then also affects digital coins.
More and more investors are also reluctant to take risks. The Ukraine war also contributes to this. In uncertain times, many abandon overly speculative investments with high volatility, as cryptocurrencies tend to be. This is unlikely to change in the foreseeable future.
Bitcoin, the oldest and first cryptocurrency, also feels all of this. Most recently, it had stabilized between $20,000 and $24,000, and has now slipped below the level of the past few weeks to just under $19,000.
Compared to the peak in November 2021, the value of a bitcoin has fallen by more than 70 percent.
But Bitcoin also lost compared to other cryptocoins. Its share of the market value of all cryptocurrencies shrank from 70 percent at the beginning of 2021 to just 39.5 percent in September 2022. Ether already has a market dominance of about 17.4 percent. This is also due to the diversely used Ethereum network and the NFT industry. The market cap of all crypto coins is currently hovering around the $1 trillion mark.
Despite the sharp drop in prices, the number of transactions on the crypto exchanges has remained stable.