Deeply drunk: BÖRSE am Sonntag

If Bitcoin and the like are in fact what they are called, ie: (crypto) currencies, they currently have an inflation rate that would make Venezuela or Turkey look like havens of stability.

By Reinhard Schlecker

Anyone who thinks they can make purchases with blockchain money will have to cut back or keep saving after Bitcoin halved to around €27,000 over six months. Immersion poisoning contains a hangover at the same time.

Admittedly, just two years ago the assets were worth a quarter of their current value, around €6,500. But this is no consolation, strictly speaking, because the direction of violent fluctuations in value is less important than fluctuations: rarely any means of payment in the world, except for failed states, show such a development. Those who have a certain wealth there will avoid the national currency and move to safe havens, where there are precious metals and, if paper, the US dollar. The cryptocurrency escape, which is currently making the stunned audience shake their heads, is by no means without precedent in the non-computerized FX environment.

But: it won’t be accepted by value-oriented investors or consumers without protesting, say, for making an investment in November that easily halves. Or, for example, ordering a new car, where you can choose to pay for the engine or body on delivery. Anyone who accepted Bitcoins, as Tesla sometimes did, and quickly escaped virtual space again, had to explain to their shareholders why you had to sell your car at a 50% discount or sooner or later at a 50% surcharge.

Proponents of vehicles like Bitcoin or Ethereum, or the ironically named stablecoin (currently not stable in part) like to signal independence from government agencies and anonymize everything, the counterfeit-resistant constitution of coins thanks to the blockchain process. However, anti-theft security is rarely included in the argument chain, for good reason after the multi-million dollar burglaries, where it was not crypto money, but above all the perpetrators who remained unknown. Cases where billions of bitcoins were stolen are rather rare, but the FBI was able to investigate them with thieves – in February a couple was arrested in New York and the stolen goods were secured. He’s a casual “magician”, a moderately talented rapper (among other things) whose tactics are quickly discovered by the FBI, but whose hair is less than that. Sometimes there are perpetrators like a North Korean military unit (stolen $625 million in coins), prosecution is difficult if not impossible; Or unknown participants in the blockchain computer game, who then, in one form or another, return part of the loot. Perhaps they were not satisfied with the performance.
Bitcoin critics, such as the eminent Warren Buffett, or more recently European Central Bank President Christine Lagarde, do not always achieve the strength one would like to ascribe to them. Lagarde, for example, identified the fact that blockchain currencies were not backed by assets as a knockout criterion. Well, since at least 1973, this has also been true for the dollar, the franc, the yen, and the German mark/euro. It can happen, just a simple mistake.

Data like this shows, however, that currency watchdogs have become a bit nervous when it comes to blockchain confirmation. There are certainly many reasons for this, and not just, as fans and investors claim, fear of independent currency areas that elude traditional control. It certainly cannot be excluded that Bitcoin & Co. can also cause potentially serious disruptions to existing financial markets. This money is being laundered in the world of currencies, for example in blockchain computer games, it is almost a truism. In addition, a whole world of service providers, financial intermediaries, consultants and brokers is now tied to currency, which cannot be ignored. If cryptocurrencies do not fail to deliver on many of the promises they made before, they will likely get traditional payment methods into trouble in the current era of high inflation. Another sign is that established currencies like the euro also have a digital sister in the pipeline for some time now.

Anyone who considers all currency misfortunes as growth problems that will grow, of course can also participate in the upcoming new hype as a private investor with relatively little risk (more than the total loss is excluded). There are traditional ETFs that rely on companies that make their living trading cryptocurrency. However, the most famous of them, Coinbase, is not exactly a recommendation (from 280 to 65 euros in six months). In Germany, you can invest directly in bitcoins as well as buy them directly with ETNs, which can be traded in the same way as ETFs (exchange-traded securities). Savings plans are also possible through many brokerages. Advantage: Such schemes smooth out somewhat extreme volatility. The fact that this is speculative and still may not be a warning to some, but rather a recommendation.