Turbulence in cryptocurrencies continues – prices drop significantly

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Cryptocurrencies came under pressure again on Sunday. Other digital currencies also sank. One bitcoin cost around $34,000 on Sunday.

The cryptocurrencies have come under pressure again on Sunday. After the prices of the digital currencies had stabilized somewhat on Saturday after the price crash in the days before, they recently gave way again. For example, one Bitcoin, the best-known digital currency and the largest by market share, cost around 34,000 dollars on the Bitstamp trading platform on Sunday, almost nine percent less than the previous day. Other digital currencies such as Ether also sank.

Last week, Bitcoin had briefly fallen to 30,000 dollars on Wednesday, but was able to recover somewhat in the days that followed. With a level of around 37,000 dollars on Friday evening, bitcoin lost about a quarter of its value over the course of the week. Since the record high of almost 65,000 dollars in mid-April, it went down by almost half.

High profits with immensely high risks

Despite the heavy losses in recent weeks, bitcoin still costs almost four times as much as it did a year ago. The massive fluctuations show the dilemma of the market for digital currencies – on the one hand, it promises high profits, but immensely high risks.

Experts cited news from China as an important reason for the recent price slide. The government reiterated an earlier announcement to take tougher action against the production of cryptocurrencies. The production of digital currencies consumes enormous amounts of electricity in the manufacturing process.

Elon Musk and U.S. Treasury Department weigh in on cryptocurrency

Previously, Tesla CEO and crypto advocate Elon Musk had already stirred up the cryptocurrency market several times. For example, Musk seemed to hint that electric car maker Tesla could divest its bitcoin holdings. Musk quickly denied it, but the price movements in bitcoin were enormous.

Another negative factor came from the US last week. On Thursday evening, the U.S. Treasury Department announced that it was considering a reporting requirement for crypto transactions of more than $10,000 for tax honesty purposes. If implemented, this would be a blow to the anonymity of transactions so cherished by crypto fans.

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