Cryptocurrencies: “Stabilization after another sell-off”
Strong fluctuations remain a key feature of cryptocurrencies. The prices of Bitcoin, Ethereum and co. have been under enormous pressure in recent weeks. US President Donald Trump has now at least stabilized the situation.
06 March 2025 FRANKFURT (Börse Frankfurt). Bitcoin is trading at 91,340 US dollars on Thursday afternoon. This is a discount of 16 percent compared to the record high of around USD 109,300 reached on the day of US President Donald Trump's inauguration on January 20. However, the current price level is also 16% above the annual low of around USD 78,700 reached at the end of February. This means that Bitcoin has recovered more strongly than other cryptocurrencies, although the previous price falls for Ethereum and Solana were even more pronounced.
Crypto theft triggers new concerns
The price movements were influenced by two factors in particular. Firstly, the theft at a crypto exchange in Dubai was a key factor in the sell-off. “The Bybit hack on 21 February was the biggest cyberattack in the history of cryptocurrencies,” states Maximilian Michielsen from 21Shares. Hackers were able to divert assets worth 1.5 billion dollars from the crypto exchange on that day. “The attackers exploited a vulnerability during a routine transfer from an offline 'cold' wallet to a 'warm' wallet, gained control and transferred around 401,000 Ether to unknown addresses,” explains Dovile Silenskyte from WisdomTree. The incident has revived concerns about the security of digital asset platforms and further unsettled the market. For Ulrich Stephan, Chief Investment Strategist at Deutsche Bank, the subsequent price slide shows “that cryptocurrencies are not the ‘safe haven’ that some have attributed to them”.
Trump and his crypto reserve
The fact that prices have at least stabilized in the meantime is probably primarily thanks to Donald Trump. On Sunday, he announced his intention to push ahead with a strategic cryptocurrency reserve, which includes Bitcoin and Ethereum as well as Ripple, Solana and Cardano. However, the subsequent jump in prices, especially for the smaller cryptocurrencies, has so far not been sustainable. According to Michielsen, it is now imperative that details on the selection of assets, financing mechanisms and regulatory implications are provided. “Until these details are known, investor uncertainty is likely to weigh on market sentiment”. André Dragosch from crypto ETN issuer Bitwise is confident, pointing to the increasing supply shortage of Bitcoin, among other things. Together with the current high level of skepticism on the market, this would help to limit the downward pressure and give the cryptocurrency a long-term tailwind.
High volatility creates habituation effect
Ivo Orlemann from ICF Bank is currently observing a majority of purchases in crypto ETN trading. “Investors now seem to be used to larger price movements, so we haven't seen much selling/profit-taking”. The ETNs on Bitcoin (DE000A28M8D0) and Solana (DE000A3GSUD3) offered by VanEck are still on the buy lists. In derivatives trading at Vontobel, David Hartmann also sees a clear surplus of products that benefit from rising prices in a somewhat quieter market compared to the previous month. The top 3 securities are moderately leveraged mini long futures on Bitcoin (DE000VC1HCL6, DE000VC1HCR3, DE000VC1HCB7).
Ivo Orlemann
By Thomas Koch, 06 March, 2025, © Deutsche Börse AG
About the Author
Thomas Koch is a CEFA investment analyst, investment specialist for structured products and certified certificate consultant. He has been a freelance journalist covering events on the capital markets since the beginning of 2006.
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