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Bitcoin price: what is the risk for investors?

This is the burst that everyone fears and that does not happen. But which, if it occurs, will hurt, very bad even, considering the considerable skyrocketing of this asset that few buyers really know how to apprehend.

Bitcoin continues to rise again and again at levels beyond comprehension. This Thursday 7, the virtual currency has exceeded the $ 15,000 mark. As a reminder, this “currency” (which is actually a peer-to-peer unit of payment using blockchain and which is not listed on a regular market) was worth “only” $ 1,000 just a year ago. It was still at $ 5,000 in October 2009.

How to explain such an outbreak? The answer is complex, the formation of bubbles responding in part to increases that are maintained. The higher the price, the more investors are willing to risk a sum to make an added value, even if they are aware of a possible fall. They only hope to withdraw before the fall, betting that not all investors do the same thing at the same time … which would cause the crash.

But bitcoin also benefits from some form of “recognition” by the institutionalized economy fueling its rise. If the encrypted currency was initially used for pure speculation and purchases, rarely legal, on sites of the “darkweb” (the web not referenced by the search engines), it has now passed (a little) the border of the legal and material world. Some goods and services are starting to accept dematerialized payments. A first bitcoin fund launched in France and even Goldman Sachs have announced its willingness to engage in trading bitcoin. If the source was not confirmed, it was enough for the course to fly away, now surrounded by an aura of respectability.

Read also: Buy Bitcoin ice cream in New York, it’s possible but not given

The asset is still risky, maybe see a madness at this level of nominal value. Indeed, the prospect that bitcoin one day replaces an institutionalized monetary system seems very uncertain, except perhaps for some states where the monetary system is already failing. Strong central banks that would like to adopt it could also decide to interfere with the opaque rules of quotation of this currency, which could bring back some credibility in the currency, but at the price of a possible “correction” “violent on his course. Finally, if it is really a wave of cryptocurrencies that must sweep the planet, and bitcoin would be a precursor, there is no indication that central banks will not develop their own currency. Bitcoin then competes with powerful players, and it is not sure who wins the battle.

And to imagine the possible catastrophe for the carriers of the 256 billion dollars of capitalization of bitcoin (more than the GDP of Finland or Portugal), we must remember that its launch at the end of 2009, Bitcoin was worth only a handful of US cents. If the virtual currency fell back to its original price (eventually losing all speculative value and becoming only an alternative payment method), it would be a loss of 99.99% for the holders. Loss, she, that would not be virtual for those who are acquiring bitcoins at current prices.


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