As of January 1, 2021, the value of bitcoin was 24,035.6 euros. At the time of writing, at 5:20 p.m. on February 16, 2021, it is at 40,450.4. Ergo, bitcoin has grown by 68.3% in a month and a half. The main cryptocurrency on the market goes from high to high in recent times, usually to the albur of large and media acquisitions. The last push was given to him by Elon Musk when, on February 8, Tesla bought $1.5 billion in bitcoins.
A day earlier, on 7 February, bitcoin, according to Investing,closed at 32,298.1 euros. 24 hours later it was already at 38,523.7. So the company's announcement owned by the eccentric billionaire caused the cryptocurrency to grow by 19.3% in one day.
Prior to Tesla's purchase, bitcoin carried continued and sustained growth, accelerating at specific times by news that shook the sector. Among them, J.P. Morgan's forecast that bitcoin would reach $146,000 (three years earlier they said bitcoin was a fraud) or the announcement of several large companies such as PayPal, Burger King or Mastercard that they would allow bitcoin payments on their network.
The increase in the value of bitcoin (and other cryptocurrencies such as ethereum) has led many investors to focus on these digital currencies, which had always been seen with certain reluctance. At the same time, neophytes in the sector have taken an interest in investing in bitcoins in light of such spectacular growth figures.
Is bitcoin rising a big bubble?
Tesla buys a lot of bitcoins and the price of the cryptocurrency goes off; Musk mentions Dogecoin (the cryptocurrency that was born of a meme) on Twitter and its value is also released; Reddit's liners stop encouraging the purchase of the Ripple and it falls without a net off the cliff.
These kinds of events, which denote the high volatility inherentin the price of cryptocurrencies, mean that, despite the undoubted good condition of the cryptocurrencies, there are still many voices that alarm the risk of such investments and that they boast that all this is nothing more than a huge bubble.
Manuel del Pozo wonders in Expansion when will that bitcoin bubble be punctured? Remember that it has already deflated to the limit in 2018, when the cryptocurrency lost 80% of its value. He says, moreover, that“the bitcoin boom is increasingly like a pyramid scheme that will crumbl when there is no one who wants to buy.”
“Bitcoin will never be a currency”
The president of the European Central Bank (ECB), Christine Lagarde, is one of the most critical personalities with bitcoin. In addition to asking for regulation of it, it has not hesitated to ensure that bitcoin will never be a currency and that it is a highly speculative asset. For her, this cryptocurrency has allowed to close “fun businesses” and has played a key role in many money laundering operations.
Vice-President of the ECB for eight years, Vitor Const'ncioposted a long thread on Twitter in which he read similarly to Lagarde's. The Portuguese economist assures that bitcoin has changed its nature:from an initial goal of being a currency, it has become an accepted asset for investment.
Luso refers to one of the arguments usually put forward by bitcoin advocates to justify that nothing has to do with the current situation with that of 2018, and it is the fact that, this time, there are many financial institutions that have invested in bitcoin. This has made it grow greatly, and it shows, const'ncio argues, that bitcoin cannot be a conventional currency for transactions.
Bitcoin, he points out, is now an asset, part of the investment world. On Wall Street, there are already a lot of companies that trade bitcoin derivatives. Grayscale Bitcoin Trust, a Bitcoin holding company, owns 3.1% of the 18.6 million bitcoins already mined. “Now there is a whole ecosystem on Wall Street around bitcoin(Brokers,Funds, ETFs …). According to many, bitcoin is a kind of‘digital gold' that tries to compete with gold in the same asset class.” Perhaps, he continues, more non-financial firms will follow Tesla and invest in bitcoins,yet, “it's pretty risky. Bitcoin is an asset that does not generate regular income,only capital gains (or losses). Its value depends solely on the will of the buyers and their expectations.”