FRANKFURT (dpa-AFX) – Bitcoin has already eaten up the gains it made at the beginning of the week. On Wednesday evening, a unit of the oldest and most famous cryptocurrency cost $64,809 on the Bitfinex trading platform. This is roughly the level from the weekend.
Over the weekend, a regularly recurring event took place on the crypto market that the Bitcoin fan community had been looking forward to for months. It is the so-called “halving”, through which the reward for verifying Bitcoin transactions is halved every four years. As a result, the growth of the Bitcoin supply is reduced, which in the past has usually been accompanied by price increases.
On Monday, however, the price increase was already limited due to the hope that supply would grow more slowly in the future, as investors had already anticipated the advantages of the “halving”. Accordingly, the Bitcoin price fell slightly on Tuesday. The downward movement accelerated on Wednesday.
“A few days after the Bitcoin halving, calm has returned to the crypto market,” wrote crypto expert Timo Emden from Emden Research. Investors have been looking forward to the event for a long time and have consequently priced in the kind of “artificial shortage of supply” in advance.
According to Emden, investors could now devote more attention to monetary policy developments again. The prospect of falling capital market interest rates globally is likely to further increase the attractiveness of Bitcoin. In the hope that the monetary policy headwinds on both sides of the Atlantic will ease, Bitcoin and Co could also find a breeding ground. On the contrary, given rising interest rates, investors could turn their backs on risky asset classes and look for fixed-interest investment alternatives./la/ngu
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