A rogue becomes presentable
When Venezuelan President Nicolas Maduro came to power in April 2013, there were 22 Bolivar for one US dollar. The share price last stood at 27,000 Bolivar. Inflation in the South American country is taking on devastating proportions, with citizens lacking food and medicines.
So the Venezuelans are trying to keep their money safe. They are also investing in alternatives such as the digital currency Bitcoin. It's not just saving money. The inhabitants are now also shopping for everyday necessities. Bitcoin evolves into a parallel currency.
Although investors still use the currency, which is created from cryptographic algorithms, primarily as an investment alternative and speculative object - the price developments are brilliant. The US top economist Robert Shiller therefore reversed the trend as a "speculative bubble formation". Jamie Dimon, head of the US investment bank JPMorgan Chase, described the currency, which is often used for criminal payments, as "fraud".
But away from stock market hype and villainy image, the digital currency is increasingly making its way into everyday economic life. Oliver Flaskämper, operator of the only German marketplace bitcoin. de, describes the virtual money as "digital gold replacement with payment option". He observes that payments are increasing, with the share of used bitcoins currently between 15 and 20 percent. "We are not dealing with a hype, but with a new currency,"says Flaskämper.
The Japanese government is similar. Bitcoin is officially accepted as currency in Nippon. Citizens and companies have recently been able to pay their electricity bills at the energy supplier Remixpoints in Bitcoin. This is an enormous relief for companies that previously had to pay high fees for each transfer and possibly even have to pay negative interest on cash deposits at banks. Other countries are in the starting blocks: India is looking for a digital currency platform after a failed currency reform. And Russia is promoting blockchain projects to strengthen cryptocurrencies.
Praise from the IMF
Mati Greenspan, chief analyst at the social trading platform eToro, explains why Bitcoins is experiencing a meteoric rise in individual countries:"People have lost confidence in the central banks, which have only been printing money and weakening the national currencies for years," says Mati Greenspan, head analyst of the social trading platform eToro. The Blockchain - the transmission technology on which Bitcoins is based - allows payments beyond expensive financial institutions.
Even Christine Lagarde, the head of the International Monetary Fund, acknowledges this. Bitcoins could be used in countries with weak central banks and inflationary currencies in particular, she said at a recent conference. However, virtual currencies would not be able to establish themselves globally. They are still "too volatile, risky, energy-intensive and not scalable enough".
Lagarde is not alone in her interest in the cryptocurrency and its future potential. After all, investors were able to earn a tremendous amount of money in a short period of time. At the beginning of the year, the price for a bitcoin was still around 1,000 dollars, and in the meantime it has even risen to 5,800 dollars.
Earlier this month, however, the Chinese government announced that it would stop speculation in digital currencies. BTC China, one of the world's largest Bitcoin stock exchanges, said it had to stop trading at the end of the month. In the short term, the share price collapsed to a good 3,000 dollars. However, the Chinese, who also deal with the cryptocurrency in order to deal with the country's dominant capital controls, continue to trade underground or via the Hong Kong and Shanghai special administrative zones. This enabled the share price to recover significantly.
The massive price movements also attract investors in countries with stable currencies. For example, the clients of the US investment bank Goldman Sachs. "As our customers are showing increasing interest in digital currencies, we are looking into what we can offer in this area,"said a spokesperson, who is examining whether and how to set up a trading department. The top Goldman banker, Lloyd Blankfein, recently noted in the Twitter news portal that people were sceptical when paper money replaced gold currencies. On observation posts
According to analyst Greenspan, this is the right angle:"If the banks don't pay attention and don't develop solutions, Bitcoin eats them up." The innovation pressure is enormous.
German financial companies are now also feeling the effects of this. Deutsche Bank and Commerzbank do not offer trading opportunities. "Due to the continuing high level of uncertainty, it is not planned to offer an eWallet solution (see left, the Red.) for customers in the short term,"says Commerzbank. "We do not see any great interest from our customers at present,"says a spokesperson for Deutsche Bank.
Expert Flaskämper from the Bitcoin stock exchange observes that negative interest rates on high cash holdings also drive institutional investors into the cryptocurrency - they partly invested millions of euros.
So if the banks aren't careful, start-ups are digging them out. The German Fintech Group, for example, specializes in the development of digital financial platforms and also holds a banking license. The company is working flat out to "enable its customers to trade in the new cryptographic currency asset class in a legally compliant manner".
The ghost must not be able to get back in the bottle. Maybe the Bitcoin is more than just a bladder.
Glossary:
block chain
The blockchain transfers data like the internet. It is a decentralized network, each subscriber has access to the same information at the same time. Those who not only use the network, but also provide computing power, receive bitcoins as a reward. There is not only one blockchain, but currently more than 1000, and they all generate their own cryptographic currency.
bitcoin
The crypto currency is traded on its own stock exchanges. The offer is limited to 21 million units. The anonymous developer, who calls himself Sashoti Nakomoto, set the limit in 2008. According to bitcoin. de boss Oliver Flaskämper, there are currently around 16.5 million bitcoins in circulation. Bitcoin became famous when a co-developer bought a pizza for 10,000 bitcoins in 2010 - today about 40 million euros.
investing
Trade is highly speculative. To buy Bitcoins, investors must first install an app on their computer or smartphone, the so-called Wallet. On the website bitcoin. org all providers are listed. Before buying, investors also need a securities account on a trading platform such as bitcoin. de or paymium. com. There, buyers and sellers submit offers for order sizes with asking prices.
Bitcoin certificate
Hot paper
If you do not want to invest directly in Bitcoin, you can participate via a Vontobel certificate. Investors have to expect strong fluctuations that are triggered by currency splits, for example. The next date is October 25th. An "update" in November is also likely to be unsettling. Attention: The certificate will only run until July 2018.
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asmr-austria (Christian)
This is very interesting! I never thought about places like Venezuela or Zimbabwe using BTC in place of their own worthless currencies. However, problems have to arise when the state controls the telephone/internet/cellular networks. They could easily shut it all down.
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