Bitcoin collapses and has broken through the psychological barrier of US $ 20,000

The collapse of the cryptocurrency market seems to have no end. This Saturday, the most popular of all, bitcoin, it fell more than 10% to break through the US $ 20,000 psychological barrier for a long time. On average in the afternoon, its price was around US $ 18,000, the lowest since the end of 2020. The decline is due to investors’ flight from assets considered to be high-risk in a context of widespread interest rate rises.

Analysts already speak of “crypto winter” to refer to the beginning of a long season of falling prices. Currently, so far this year bitcoin has lost 61% of its value, even more than the Argentine peso. This new black day has revived ghosts about the future of cryptocurrencies and widened the rift between critics and fans. Between those who believe it is the digital substitute for gold and those who believe it is an unfounded speculative craze.

Just last week, Bill Gates questioned the nature of cryptocurrencies and their possible criminal uses. He said those markets are based “in a kind of theory of the most stupidthat someone will pay more for him than me “and that” he has something of this anonymity in which he avoids taxes or any government rule. “It is not the first time that the co-founder of Microsoft has expressed himself in this sense. Elon Musk had investments in bitcoin, he replied bluntly: “If you have less money than him, you should be careful.”

This new sharp drop in prices has had consequences. Bitcoin reached its maximum value last November, when it hit US $ 69,000. It has since dropped 74% e no one dares to make sure that this is the watchword. “What’s happening is that all cryptocurrency-guaranteed purchases are done and this is putting downward pressure,” Diego Martínez Burzaco, of Inviu, told Clarín. The mechanism is known as leverage and consists in the possibility of borrowing to invest, with the obligation to sell yes or yes when the price does not cover the loan.

The kidnappings stopped a bunch of wounded. The first was the collapse of Terra Luna, a stablecoin that promised 1: 1 parity with the dollar. Then came the bad news, such as the surprising withdrawal block imposed by Celsius Network, a company that granted loans in crypto. In parallel, two of the world’s leading trading platforms, Coinbase Global and Gemini, layoffs announced. Something similar happened with the Argentine Buenbit and with the Mexican Bitso, who also has a presence in the country.

The pessimistic climate prevails on those who believe that in the long term bitcoin will be able to recover. The current downtrend appears to validate legendary investor Warren Buffet’s harsh views on cryptocurrencies. Last month, the 91-year-old financier said that “I wouldn’t pay $ 25 for all the bitcoins in the world“. The legendary fund holder Berkshire Hathawaystated that bitcoin “it’s worth nothing“, that it’s not a productive commodity and that its price depends on what people are willing to pay.” Whether it goes up or down, the only thing I’m pretty sure about is that it doesn’t produce anything, “he said.

Gustavo Neffa, of Research for Traders, said that the collapse of bitcoin has to do with the increase in the rates applied by central banks to fight inflation. “This week the aggressive monetary policy of the US Federal Reserve was confirmed. Added to this is a new increase in interest in England and another, unexpected, in Switzerland, which is the highest in the last 7 years. All of this reinforces the idea of ​​the end of abundant moneybecause the monetary stimuli applied during the pandemic are withdrawn, “he described.

The turbulence with bitcoin hits Argentina, one of the countries with the highest adoption of cryptocurrencies. All this despite the efforts of the Central Bank, which refuses its legalization. Last month, the entity headed by Miguel Pesce prevented two local entities (Galicia and Brubank) from offering cryptocurrencies to their customers. locally orthere are about 15 exchanges (trading platforms), including Ripio, Satoshi Tango, ArgenBTC, Bitso, Decrypto and Bitex. “The cryptocurrency market is bearish but it does not escape the general trend of other financial assets,” adds Neffa, saying that everything is part of the end of the cycle, which is reflected in the general declines of the main equity markets of the world.