Can crypto currency become worthless

Can bitcoin soon become worthless?

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Bitcoin has already lost 80% of its value since its all-time high of just under $ 20,000 at the end of 2017. Can the heavily advertised cryptocurrency soon become worthless? Even without the "Bitcoin Chinese" it can be explained to any non-expert why this scenario is very realistic.

Bitcoin is a set of numbers and letters

From a material point of view, Bitcoin is not comparable to a commemorative coin. The buyer will quickly notice that he is only buying a data set of numbers and letters, something like a password. He deposits this record in a depository similar to an account - there is no other way digitally - and carries out his transactions from there. Account forgery and access and control by state bodies are not possible, but internet transfers are. What could be more natural than to believe that there is actually a safe, inflation-free, anonymous but globally recognized "value" that can be used as a currency. If it were a currency!

Bitcoin has neither exclusive crypto properties ...

Because of the aforementioned attributes, its promoters falsely claim that Bitcoin is an exclusively "encrypted" currency. Because with the so-called blockchain technology anyone can create Bitcoin competitors. There are currently around 3,000 cryptocurrencies worldwide, compared to only around 100 state currencies of the central banks. Countries have also tried to break the anonymity of crypto currencies - there are already the first bans! - because they see it as a "competitive currency" to their own national currency. How should a tax liability be calculated? Anyone who, as an investor, does not believe in the abandonment of this state monopoly must avoid Bitcoins even if the price has already collapsed so massively.

With the currency and value character of the favorite investment, it is not far off anyway. Despite the great media hype, the market capitalization of all crypto currencies in circulation today is just 137 billion US dollars. That's just 0.1% percent of global investments, which the World Bank estimated at $ 136 trillion in 2017.

... it is still a real currency

In addition, the economic agents must want to accept a non-state currency. This case is only conceivable if it is based on a value and not just belief or a fashion trend. The US dollar or the euro may be imperfect, but they still represent an - albeit dwindling - part of the national economy.

On the other hand, how quickly the belief in "virtual values" can collapse is shown by the bitter end of the New Market in the years 1999-2002. The Intershop Communication share, which at the time electrified the investor world with the slogan of revolutionary e-commerce, is an example of how quickly this can happen. The price fell from € 50 to just under € 2 within a year. So if you, like most cash defenders, do not believe that a digital currency will be able to prevail against the coins and banknotes that have been tried and tested over millennia, you are not allowed to buy Bitcoins either.

What's next for Bitcoin?

It is undisputed that the blockchain technology used for "Bitcoin mining" is on the advance in banks and insurance companies. However, these are two different things. One is a pseudo-currency, the other a future-oriented, useful encryption method. The data set made up of numbers and letters can very well drop to the price of its initial listing of € 7.83 in 2009. Even $ 100 would still be a disaster for most bona fide investors.

Bitcoin has no fundamental value and is just a "cost of production" that can cause extreme power consumption of up to US $ 5,000 each. But costs are not a value per se. Anyone who mines this "digital coin" today must have a strong belief in a price miracle. How the manufacturing process takes place is not important to investors. He is interested in the business side. If he buys shares in airlines, he won't waste his time studying the motor skills of aviators either.

The soberly calculating stock market teaches: Everything that has a pseudo-economic character collapses sooner or later. On the Neuer Markt, for example, it was claimed at the time that companies with the highest losses are currently in the process of acquisition and will soon become market champions. Your shares are the future price favorites. That was highly pseudo-economic. Apart from banks, dealers, analysts, stock market magazines and many other capital market suppliers, hardly anyone made any money with shares in the Neuer Markt. It will probably be the same with Bitcoin today. The aggressive sales advertising in all media is definitely noticeable today as it was then. The high spread of over 1% between the buying and selling prices of Bitcoin shows today, as it was then, that this is a less liquid market.

The temporary price recovery on December 17th of a robust 7% - with, however, low sales - does not bring a change. According to the 1 x 1 of chart theory, it means at best that the downward channel remains intact. It is not a comprehensible purchase argument. The belief that the price of a sharply fallen asset must automatically recover is also pseudo-economic. (Viktor Heese)

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