“Crypto Winter”: Cryptocurrencies are extremely cautious

Digital currency prices tumbled to their lowest levels in two years last week, losing more than two-thirds of their value and losing their investment and financial portfolios about two trillion dollars in an unrestricted decline was to its true value, but took its path many newly formed companies to reap the benefits of the massive rise of the currency. with unconventional monetary instruments.

Last November, the unit price of “Bitcoin”, the most famous digital currency, exceeded 68,000 dollars, and the price of “Ether” reached the threshold of 3 thousand US dollars, and the book value of the digital currencies in circulation reached three thousand . billion dollars. These imaginary numbers have whetted the appetites of banks and traditional money houses, prompting investors and financiers to acknowledge the “legitimacy” of what they have for many years considered a hybrid, a money market intruder, that will not survive or fail. SpaceX, Elon Musk’s $ 1.5 billion purchase of Bitcoin, and its companies’ decision to accept cryptocurrencies in their trading transactions in the spring of last year, the big impact of the new currency’s entry into the big club.

In light of the rapid gains made by traders in new currencies that are not subject to any terms governing their work, US banks and investment firms have begun to offer digital currencies within the investment portfolios and financial services they provide to their clients. , while the names of the big companies announcing their acceptance as a monetary instrument rolled over, and financiers and investors rushed to set up companies. The exchange, exchange and marketing of the virtual currency attracted thousands of young talents and many veterans of banking and stock exchange, and advertisements for “Bitcoin” and “Ether” and exchange companies such as “Coinbase” and “Binance” invaded television screens, publications and Internet pages , with the recommendation of leading artists and athletes, to say that the currency of the internet era has reached the age of majority.

The rapid recovery of the US economy, from the setback of “Covid 19” and the steady rise in share prices since the beginning of last year, has allowed to provide additional liquidity to investors who wanted to dig into the new experience, and more than sixty new companies sprang up in America alone, each with a capital of more than one billion dollars. The investment enthusiasm was not limited to professionals, but the digital fever spread officially and popularly around the world to the extent that the young president of El Salvador, of Palestinian origin, Najib Bakila, encouraged about four hundred five- twenty-million dollars to be converted from the public treasury into digital currencies, while news and reports continued about Samah more Of the world’s governments and companies to adopt it, with thousands of citizens entering the new struggle every day, and the figures indicate that about 100 million citizens in India 27 million in America, 17 million in Russia, 13 million in Nigeria, 10 million in Brazil, 1.8 million in Egypt, and 868 thousand in Morocco And less than half a million in Saudi Arabia -Arabia owns digital currencies, and that 82 percent of them have university degrees, 79 percent are men, 58 percent are under the age of thirty-four, and 36 percent have an income of more than $ 10 0.000 per year.

But the victory dance did not continue because “the music stopped,” as the New York Times put it, pointing out that many start-ups quickly laid off their employees and some of them suspended their operations. This came after Teralona, ​​the largest digital exchange company linked to the dollar, announced its bankruptcy, and Voyager, a financier of Threerose, announced that the latter did not receive an installment owed to it worth $ 665. million can pay, and that it was in the process of liquidating its digital assets to collect the amount, and a decision Celsias and Coinflex stop withdrawals from their accounts, these moves, simultaneously with the continued decline in share prices on the New York Stock Exchange (the Dow Jones index is down more than 15 percent, the S&P index is down 20 percent, and the Nasdaq is down more than 15 percent) (30 percent), amid fears of economic stagnation after the current inflation, to a mass flight of virtual currencies that has contributed to further decline, bringing the price of “Bitcoin” to below 18 thousand dollars, and the value of “Ether” drops to the limits of one thousand dollars, while The losses of the lesser known currencies were more.

The American media called the decline of the digital market the name “Crypto Winter” as a synonym for the term “bear market” dedicated to the decline in the value of shares in the financial markets, and cited the reasons for the decline attributed to the rise in interest rates, indicators of inflation and fear of recession, but the reason that can not be measured and can not be ignored. It is also the capital market’s embrace of the new currency, which has led to its fate being linked to its own in a remarkable paradox, as it has basically presented itself as a guaranteed alternative to market mechanisms and a safe haven from inflation. and stagnation because it is not linked to central banks or government policies, and the facts have come to light that the traditional market is still capable of absorbing and adapting any developments. related to modern technologies, just as it absorbed and shattered the Internet bubble at the turn of the century, transforming the virtual space into tradable stocks and bonds subject to fluctuations, especially as the total value of digital currencies is no more than the value of some big companies like “Apple”, “Chase”, Aramco, Google, Tesla and Amazon.

Financial analysts expect digital currencies to recover gradually, in parallel with the recovery of the stock market, and see that talk about the end of the digital experience has been misplaced and is nothing more than a deliberate exaggeration by some gambling investors who want to exhaust the new. currency more before buying it at cheap prices to make big profits. In addition, analysts agree that the opportunity now exists for the financial authorities in America, at least, to introduce provisions and regulations that sponsor trading in digital currencies and make investing in them less risky. It is true that the digital currency has recently entered intensive care, but it is not dying.

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