The fluctuation of prices of digital currencies, including bitcoin, has been significant in recent weeks, and analysts have given various reasons for this instability. The price of bitcoin fell again in the last days of the week, reaching the range of $ 41,000. The large impact of bitcoin prices on the prices of other digital currencies has also reduced their prices.
In the past, analysts have repeatedly warned investors that the digital currency market is very risky and that investors are more likely to lose assets. The existence of this risk has been proven many times in recent years. In November last year, the price of bitcoin reached a new record, above $ 69,000, and is now fluctuating at much lower levels.
Instability is an inherent feature of the digital currency market, and it is very difficult to assess the situation and predict the future due to insufficient data from this market. Another point is that the behavior of the digital currency market is changing; This means that in the past, this market was thought to be a profitable market for high-risk periods, and its presence in this market protects assets against inflation; But now we see that rising geopolitical risks are causing prices to fall, and rising inflation to very high levels has not made Bitcoin and other digital currencies attractive.
The nature of the digital asset market is highly variable, which is why investors need to be very careful. Recently, new factors have been added to the set of factors that affect the price of digital currencies. Geopolitical tensions on the Ukrainian border are a factor putting pressure on the market. The present article discusses the competition between decentralized digital currencies and central bank digital currencies, the impact of two important factors on the price of digital currencies, predictions about the future, and the risk that the digital asset market poses to the stability of the global financial system.