Bitcoin Bounces Back After A Dip Below $30,000

Cryptocurrency bitcoin gained a lot of value on Wednesday. That happened after a dip to below $30,000 a day earlier, with which the entire profit of this year disappeared. The coin gained almost a fifth in value to more than 34,000 dollars, only to fall slightly again.

 

There does not seem to be a real, demonstrable reason for the increase in value. In the wake of bitcoin, other cryptos such as ether and XRP also gained in value.

The digital currency peaked at more than $63,000 in early April. Since then, the value of the currency has fallen sharply. First, reference was made to the fact that the electric car maker Tesla stopped accepting payments in bitcoins due to environmental concerns. Later, the Chinese government took action against so-called bitcoin miners.

Many of those mining computers are located in China, while bitcoin has been banned in that country since 2017. In recent months, the governments of several Chinese provinces have taken action against the data centres where mining takes place last week in Sichuan. China wants to reduce electricity consumption by the miners.

Meanwhile, there are also concerns about tether, a so-called stablecoin whose price should be pegged to the dollar. Tether is now the world’s third-largest digital currency with a market value of more than $60 billion. Some investors are concerned that the tether issuer does not have enough dollar reserves to justify its peg to the dollar.

The company behind tether previously revealed that about 76 percent of its dollar reserves were backed by cash and other liquid assets. In the end, just under 4 percent was actually cash. In addition, a large part was covered by securities in the form of short-term debt.

Tether and Bitfinex, a digital currency-affiliated exchange, previously settled with the New York Public Prosecutor’s Office. He accused the firms of moving hundreds of millions of dollars to hide the $850 million loss in customer and company funds. Tether and Bitfinex agreed to an $18.5 million settlement and were banned from operating in New York State. The companies did not admit any wrongdoing.

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