The bitcoin boom has threatened to turn it into pure gold

With the debate over its value, the bitcoin is back. The value of the digital currency is rising, and last week it estimated at more than سے 40,000 for the first time, doubling its value in less than a month.

Since the outbreak of the epidemic in March last year, its value has risen to more than 700 700,700, up from about from 5,000.

But the headlines about the 12-year-old cryptocurrency are nothing new. The bitcoin has been here before, in the last decade, when it went to tears with an estimated result. Drawing parallel to the 17th-century tulip frenzy, the bitcoin fell from just $ 1,000 in early 2017 to close to 000 20,000 in 12 months, then closer to a few weeks in early 2018, 000 fell to 3,000.

Bitcoin / dollar value

At the time, most mainstream investors, central bankers and financial owners wrote of it as a dangerous, anonymous tool for fraudsters and terrorists, warning of the danger of dragging unwanted punters. Waiting for that to happen was a disaster. One of the biggest critics of the time, JPMorgan’s chief executive, Jamie Damon, called it a “fraud”, referring to a bankers’ conference in late 2017: “If you want to buy it You’re stupid enough, you’ll pay for it one day. “

There are now more than 18 million bitcoins, created by “miners” who also provide computational power to reduce blockchain, a digital ledger operated by thousands of computers around the world. In which transactions are recorded using currency. The mathematical system that produces the new bitcoin – which is decentralized and therefore has no regulatory body like the central bank – has a maximum of 21 million coins.

Blowing away, anyone who chooses to “huddle” in their host of online supporters or stays on the bitcoin – earns so much money to embarrass America’s highest paid banking executive. Could Damon’s own daughter was one of the owners, who emailed him after a “stupid” comment, saying she had two bitcoins. Today, this modest event will cost more than 80 80,000.

This time around, Damon and the rest of Wall Street are shifting their focus, with a growing number of institutional investors, hedge funds and pension money managers buying. While still saying “this is not my cup of tea”, Damon admitted last month that some “very smart people” were getting involved.

Once seen as an anti-establishment, the Anarchist Project to End Modern Capitalism, Bitcoin buyers now include pillars of Wall Street and the financial elite in the city, including firms such as UK fund manager Roofer. ۔

Analysts say three key factors are driving the value of the bitcoin. First, the media frenzy surrounding the latest boom in digital currency has drawn speculative buyers. Second, the involvement of traditional money managers is growing in a mature market. And finally, the big players are looking at it as protection against inflation.

Jamie Damon's head and shoulders shot against a dark background

Jamie Damon, a longtime Wikipedia expert, admits that “very smart people” are now entering the market. Photo: Gina Moon / Reuters

Expectations are rising for strong growth in average consumer prices, amid hopes that the corona virus vaccine will spur rapid economic recovery at a time when the central bank is still pushing billions of pounds into its economies. Pumping source. Inflation will reduce the value of “generous” currencies. Money from governments – making digital currencies a potentially attractive proposition.

In the past, investors have bought assets such as gold, which are seen as ways to insure against inflation because they hold their value in times of economic pressure. This time around, some analysts say the bitcoin could compete with precious metals as an alternative. Since October, more than 3 3bn (2.2bn) has been invested in the Grayscale Bitcoin Trust, an investment vehicle that knows the value of the bitcoin.

Analysts at JPMorgan say the bitcoins could be worth 6 146,000 if they are set up like gold. Comparing digital currency to a precious metal, it states that the bitcoin will need to be multiplied more than four times to meet the 7 2.7tn price of gold owned by private investors. This would mean “146k of the value of the theoretical bitcoin.” However, according to analyst Nicholas Penegartzoglu, who wrote the study, the currency will need very little fluctuation to match the value of gold, which has been around for thousands of years.

“Maybe the bitcoin has been at its peak for years now, and if it gets another shell, it could go down drastically,” he said. “If anything, the speculation that is going on at the moment is exacerbating the fluctuations of the bitcoin. In a way, it is actually delaying its concentration with gold, which is for its sustainability.” Is key.

I wouldn’t be surprised if there were no improvements. How big this reform is depends on how far it goes. If it goes up to 100,000, I think the correction would be huge.

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