Has the crypto currency bubble burst?

Bitcoin: cryptocurrency at annual high - is the bubble bursting?

To new heights or does the bubble burst? The Bitcoin price rises powerfully.

The value of Bitcoin has more than doubled since the beginning of 2020: While the rate in January was still around 7,000 US dollars (5,949.15 euros), the cryptocurrency is walking towards 16,000 US dollars (around 13,600 euros) at the end of the year . Bitcoin reached similar highs in late 2018, just before the bubble burst and the price collapsed. Analysts are now predicting a similar development. The reason for the gold rush mood could be PayPal. The payment service provider recently announced that it would enable its customers in the USA to trade various cryptocurrencies.

About the offer: Bitcoin trading at eToro *


PayPal announcement ensures confidence

In addition to Bitcoin, Litecoin and Ethereum are also involved. From 2021, customers will even be able to pay for goods and services via PayPal with cryptocurrencies. And that's exactly what comes very close to the adaptation of their beloved alternative currencies hoped for by many crypto-disciples. If it weren't for a problem: Bitcoin, Litecoin, Ethereum & Co. are not just means of payment, but objects of speculation.

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And that's exactly what attracts investors who don't see Bitcoin as money, but as an opportunity to make money. The calculation is very simple: You just have to find someone who buys the digital currency more expensively than you bought it yourself. With a greed index, analysts try to recognize the mood in the market and see this behavior of investors. The higher the greed index, the more likely it is that investors' brains will fail and they will be willing to pay overpriced prices in the hope of even bigger profits - until the bubble bursts.

Greed index climbs to 2018 level

Dr. According to a media report, Dirk Steffen, Head of Capital Market Strategy at Deutsche Bank, recently pointed out that the greed index in the Bitcoin market is over 70 out of 100 possible points and is approaching the level of 2018. By the way: The fact that Bitcoin celebrates a high at the end just before the end of a year and that it falls between the months of December and January can also have something to do with the public holidays during this time: Christians celebrate Christmas on December 24 and the Chinese between January and February their New Year celebrations. It is not uncommon for crypto investors and small investors to be in a gold rush mood, who convert part of their saved cryptocurrencies into real money in order to finance gifts and celebrations. As a result, prices fall and only recover when investors start investing real money in cryptocurrencies again.

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