Slowdown in inflation growth halts the strengthening of cryptocurrencies
In the new trading week starting on 15 August, cryptocurrency traders recorded a lower volume of executed trades, and the market capitalization of the virtual currencies market returned to the level from the beginning of July this year. Last week, the 32nd one of 2022, the total capitalization of the cryptocurrency market was approximately US$ 1.16 trillion, compared to the 31st week when it was worth US$ 1.05 trillion. According to cryptocurrency analysts, the current decline and lower interest in cryptocurrencies occurred after the announcement of a slowdown of inflation in the main world economies and especially the US economy.
On 16 August 2022, at 7:39 am CET, the most tradable cryptocurrency and in particular the virtual currency with the highest market capitalization Bitcoin (BTC) traded on the digital market Coinbase currency at US$ 23,902.75 per BTC with the BTC down -0.32% against the USD. At the time mentioned, according to the US Dollar Currency Index (DXY), which compares the USD with the other six major world currencies, we saw the USD at a price level of 106.51 with a daily weakening of -0.03%. A more significant decline was then recorded by the single European currency, the euro (EUR), which fell against the USD and traded at US $ 1.016 per EUR, with the daily drop of the EUR by -0.02% against the USD. For comparism at the end of the 32 week, the mutual exchange rate of this global currency pair was already above US$ 1.03 per EUR.
Bitcoin is an internet open-source P2P payment network and also the cryptocurrency used in this network. Bitcoin’s main uniqueness is its full decentralization; it is designed so that no one, including the author or other individuals, groups or governments, can influence the currency, falsify, confiscate accounts, control cash flows or cause inflation. There is no central point in the network, and no one can make decisions. The final amount of bitcoins is known in advance and the release of bitcoins into circulation is defined in the network source code. There are minimal or no cost payments. The network has been operating since 2009 and it was created by a group of people known as Satoshi Nakamoto. According to cryptocurrency analysts Bitcoin is the only medium of exchange that can offset central banks printing money.
A special database that stores an ever-increasing number of data – called a blockchain – serves as bitcoin’s ledger. The online database is protected both against unauthorized outside interference and from the users themselves. The final amount of bitcoins is known in advance and their release into circulation is defined in its source code. A unique feature of bitcoin is its complete decentralization. It is designed so that no one, not even its author or other individuals, groups or governments, can influence, counterfeit, confiscate accounts, control cash flows or cause inflation. Bitcoin is completely independent of traditional currencies, its value depends on the confidence that it will be possible to pay with it in the future as it does today. The value of bitcoin is based purely on supply and demand on the market, in short-term sections the exchange rate is characterized by sharp price fluctuations.
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