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Is the rise of digital currencies sustainable? 4
This year is a year of great losses for cryptocurrency investors.
Bitcoin – the world’s largest cryptocurrency – contributes 42% of the entire market capitalization.
However, Bitcoin is up more than 15% in the past week.
Shares of digital currency exchange Coinbase increased 9% in the first session of the week.
Bitcoin price movements over the past month.
This development makes many people hope that the worst in the cryptocurrency market may be over.
`Digital assets will increase in the long term. But I’m not too excited,` said Joel Kruger – market strategist at LMAX Group. `This is still an emerging market.`
Kruger said that Bitcoin’s gains are lower than those of Ether and other small cryptocurrencies.
Therefore, he believes that the expectation of Bitcoin becoming digital gold is still just an expectation.
Investors should also consider that the market’s interest in cryptocurrencies may not be enough to maintain thousands of coins, tokens and exchanges.
`Cryptocurrency is witnessing similar developments to the dotcom bubble`, with many great ideas emerging and many businesses being established, said Adam Grealish – Investment Director at Altruist.
`When the market gets tougher, companies with weaker positions and business models will be under more pressure,` Grealish warned.
Still, the current rally is helping to pull up the stock prices of nearly all cryptocurrency-related companies.
Marathon Digital on Monday jumped 21%.
So have Bitcoin, Ethereum and related cryptocurrency stocks bottomed out?
Besides, fluctuations in the cryptocurrency market have also created many winners and losers among listed businesses as well as startups.
FTX also recently agreed to grant a loan limit to BlockFi – a struggling cryptocurrency company.
Bankman-Fried also has shares in Robinhood.