Bitcoin hit $24,658 (around €24,034) on Saturday, July 30, its highest level since June 13. Its 27 percent gain in July made it its best month since October 2021. Meanwhile, another cryptocurrency, Ethereum, recorded a 70% jump last month, the best result since January 2021.
Bitcoin fell below $20,000 in late June and July due to concerns about rate hikes and inflation, as well as internal problems with the cryptocurrency, such as the collapse of the Terra/Luna ecosystem and hedge fund Three Arrows Capital.
However, Bitcoin’s all-time high of $69,000 in November 2021 is still a long way off. This fragility is not an isolated phenomenon: all digital currencies have fixed the same rate in recent months. “Cryptocurrencies have been correlated for six months with US tech stocks, which are also in sharp declines,” explains Vincent Boy, market analyst at IG.
Capitalization 400 billion dollars
The Nasdaq index has indeed lost 20% since the beginning of the year on the back of rising US interest rates, inflation and recession fears. “The current level is a good entry point into bitcoin for long-term investors,” said Warren Aummer, crypto asset manager at Coinhouse.
With a capitalization of $400 billion, one bitcoin weighs as much as the next twenty major cryptocurrencies. “Bitcoin could become the global monetary standard. For us, this is the only interesting investment in the cryptoasset universe,” says Jonathan Herskovichi, founder of StackinSat, which offers a programmed investment plan in bitcoin.
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Bitcoin is also the least volatile of the “cryptocurrencies” because it is based on reliable and widely accepted technology on a global scale. “It will recover first because, unlike some other assets, it has a real economic function. This is both the best asset for beginners and a benchmark for those who diversify into several cryptocurrencies,” notes Vincent Boy.
Other important assets in this universe, “stablecoins” (literally “stable coins”), are indexed to the price of the dollar or euro. Concretely, this means that tether, a USD coin, or a dollar on Binance is consistently worth between $0.9995 and $1.0005 (around €0.94).
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