The first and most valuable asset in the cryptocurrency universe recorded a rise in intraday trading: Bitcoin reached the quotation high of $ 22.314 in cryptocurrency exchanges, up 8,6% over the day and over 12% over the past week, according to CoinMarketCap. If it keeps its current price range above $ 21.000, it will record the highest weekly close of the year. This would be a significant rebound for Bitcoin, which suffered a 45% loss in June 2022, marking the worst monthly decline since its founding in 2008.
Bitcoin and the cryptocurrency market in general have been hit hard by the macroeconomic downturn that has damaged nearly all asset classes in recent months, including stocks, bonds, commodities, collectibles and precious metals.
Last month, the U.S. Statistical Office of Labor announced that the consumer price index - also known as the inflation rate - increased by 8,6% in May compared to May 2021. largest increase in the last 40 years. Coupled with the Federal Reserve's hike in interest rates to cool inflation and rising tensions related to the conflict between Russia and Ukraine, the geopolitical repercussions are driving up energy costs, causing supply chain problems and choking consumer activity. These economic challenges have been real and independent of the asset groups.
Is Bitcoin to buy?
Bitcoin was originally conceived in 2008 as a peer-to-peer payment service and as an alternative to fiat currencies. Since then, it has largely morphed into a store of value that has long been touted as a hedge against inflation. However, this hasn't worked out since its all-time high of $ 68.789 per coin, set on November 10, 2021, and it has fallen 68% from that maximum price as inflation has risen more than 5% each month for more than a year. .
This is not financial advice and every investor needs to understand what they are investing in and how much they can afford to lose. However, Bitcoin is the most established and most valuable cryptocurrency in the entire industry. It has gone through two bearish cycles, losing more than 80% of its value and bouncing to new highs after each dip. There is no reason to believe that the current bearish cycle will be any different, and it is possible that we will never see Bitcoin at such discounted prices again.