A ban in Kosovo, the situation in El Salvador, the interest rate decision by the US Federal Reserve – there are many factors to which the current chaos on the crypto market can be attributed. If you believe Stefan Hofrichter, chief economist at Allianz Global Investors, the price development of the Bitcoin (BTC) many characteristics of a bubble. Elon Musk, on the other hand, does cryptocurrencies like this a “disservice”.
Bitcoin is receiving harsh criticism
According to Hofrichter, the current market situation refutes the claim that cryptocurrency is independent of traditional institutions. The setbacks are a consequence of monetary policy corrections by the central banks. Bitcoin also benefited from the previous generosity.
“If you look at price action, it shows many characteristics of a bubble. The intrinsic value of a bitcoin is zero. Ultimately, it’s about the price that someone else is willing to pay for it. I suspect that there will always be market players in this niche, so there will always be a price greater than zero.”
Stefan Hofrichter (via Spiegel)
Bitcoin is definitely not about money. Rather, like other cryptocurrencies, it is a speculative asset. The Allianz economist sees certain similarities to gold. However, there is at least a secure basis for this from the industry. The volatility in the gold value is also comparatively low compared to the crypto market.
Elon Musk and Bitcoin
Tesla CEO Elon Musk has shown in the past that not only shares but also crypto values are susceptible to manipulation. Above all, the entrepreneur significantly influenced the Dogecoin (DOGE) course for a long time.
“Actually, that would be a case for the financial regulator, but trading in cryptos has not been regulated at all so far. It cannot be right that someone’s statements are causing such upheavals in an asset class. Musk is doing cryptocurrencies a disservice. Even fans get really upset about it.”
Stefan Hofrichter (via Spiegel)
The course determines the consciousness. The crypto market is not yet threatening the stability of the financial system. “But the danger increases when the two grow even closer together,” explains Hofrichter.
Source: mirror