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In recent weeks we have witnessed the drop of Bitcoin by 16%, Ethereum dropped by up to 25%, and with them, other cryptocurrencies such as Solana with a sharp drop of 35%. Let’s explore the different reasons for this plunge in cryptocurrency prices:
- Given the stock market losses on Wall Street and the uncertainty of the market due to the poor results of certain companies such as Netflix, many investors decided to get rid of their riskiest assets, selling cryptocurrencies and affecting their value.
- The anticipation of the announcements by the Federal Bank of the United States about the increase in interest rates. The whole world is expecting the announcements and this is affecting the market, there are many predictions about increase interest rates starting gradually in 2022.
- Solana – The price of Solana dropped drastically due to another network outage and the general downward trend of cryptocurrencies these days, two things that coincided.
For many, it has come as a surprise to realize that cryptocurrencies are more related to stock market results than expected. Many hoped that crypto would be an investment with a very low correlation to the stock market, and that investing in crypto would be a great way to diversify their portfolios.
On the other hand, Silicon Valley tech giants like Google, Intel, Microsoft and others are known to be developing technologies and investing in Blockchain and cryptocurrencies. So there is still a lot of unrealized potential in cryptocurrencies.
In conclusion, the cryptocurrency market is still dynamic, fascinating, and volatile, and there is still much to develop and learn in the world of crypto and blockchain technologies.
New cryptocurrencies on eToro: Ren, Synthetix and Fetch.ai
eToro continues to expand its vast offering of crypto assets and has just added three more tokens: Ren (REN), Synthetix (SNX), and Fetch.ai (FET), all based on Ethereum. With this new addition, the platform now has 45 different crypto assets.
eToro: Sign up on eToro and get a $100,000 virtual portfolio to practice your strategy!
eToro is a multi-asset platform that offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results.
Cryptoassets are volatile instruments that can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.
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