Bitcoin .. Should you invest in this currency?

Electric car and space ship giant Elon Musk is the world’s second richest person after shares of his company, Tesla, plunged 8.6 percent on Monday, wiping out $ 15.2 billion of his fortune.

It does not seem that Tesla’s decline is linked so far except with Musk’s announcement a few days ago that money is just a “code”, and that the digital currency system needs error-free adjustments in the future. In his tweet, he also criticized the huge rise in the prices of the currencies “Ethereum” and “Bitcoin”, according to It was mentioned by Bloomberg.

Musk’s comment came despite his company, Tesla, investing $ 1.5 billion in Bitcoin, which led to the rise in the value of the most famous currency in the world to more than $ 58,000 per currency, the highest price in its history, but it retreated, Monday, to a price below $ 50 thousand. , Causing – in combination with other digital currencies – losses estimated at a hundred billion dollars.

However, the decline did not reach the value of the original Bitcoin, which rose by 400 percent over the past world, which raises a serious question about the reason behind the great demand for a currency that can rise and fall in value so much.

The advertisement for Bitcoin says that it is distinguished from regular money in that transactions are carried out without the need for banks, and the price of transfers from one person or company to another is low in relation to the transfer fees through banks.

The origins of Bitcoin

Mystery and uncertainty have accompanied the rise of Bitcoin from the start, as the founder Yen who chose the phantom name “Satoshi Nakamoto” has not revealed his (or their personalities) yet.

The world first knew the name in 2009 through a research paper signed with this name that carried the idea of ​​an electronic cash system that allows direct dealings between people (a peer-to-peer system). The authors say that it aims to change the global financial system in the same way that the Internet has changed many sectors. .

Although Satoshi’s fortune is now estimated at $ 40 billion, his last dealings were in 2011, when he said in an email to the “wallets” cash campaign that he would entrust the company to the American developer, Gavin Anderson, who leads Bitcoin’s operations to this day.

It is said that the first purchase made with Bitcoin was in exchange for two pizzas, when a programmer named, Laszlo Hanich, posted a discussion on a Bitcoin forum asking to buy two large pizzas for 10,000 bitcoins on May 18, 2010.

Now these two pizzas are worth about $ 500 million, if the story is true.


Years ago, the economic site Keplinger warned of the “risks” of investing in Bitcoin. The site said that investment in digital currencies is not guaranteed because, unlike investment in sectors such as industries and real estate, they are non-profitable assets and their only value is due to the possibility of a rise in their prices. It is almost inevitable that the currency will “contract” after the significant appreciation.

At the time, the price of one currency was about 10 thousand US dollars, but now it has doubled its value five times, despite this, the warnings still exist.

According to the economist, Ali Hamid, the high demand for currency is not due to the low value of bank transfers, although this is an “important reason,” according to Hamid.

Hamid said to the Al-Hurra website that the currency has begun to deal with companies ’shares or commodities that are invested in their price fluctuations, adding,” Here is one of the risks. “

According to Hamid, “the large profit margin that has been achieved for investors so far has begun to lure large investors, and this means large financial coverage for Bitcoin,” adding, “Therefore, all currencies are just things that everyone agrees to set a value for in order to trade them for commodities, but in the case of Bitcoin, the lack of The stability in its value makes it a very risky investment. “

US Treasury Secretary Janet Yellen warned that these digital currencies are “extremely volatile and I am concerned about the potential losses investors may incur.”

The US Secretary of the Treasury previously described Bitcoin as “very speculative,” but said that “digital currencies are here to stay,” adding that “the idea of ​​creating a digital dollar may be beneficial.”

Shares of Elon Musk’s automaker Tesla fell 8.6 percent, a day after the “Bitcoin announcement” as it came to be called. In reference to the great risks involved in speculation in digital currencies.

Musk fell to second place on the Bloomberg Billionaires Index of the 500 Richest People in the World, with a net worth of $ 183.4 billion.

And regained the founder of “Amazon”, Jeff Bezos, the first place in the list of the world’s richest, even as his fortune decreased by 3.7 billion dollars to 186.3 billion dollars, on Monday.

Most of the advisors for investors in unsecured investments say that it is better “for a person to invest in what he can lose,” meaning that he puts the possibility of loss first and invests in amounts that he can compensate.

Commenting on the significant rise in the price of bitcoin and then its decline, the US technology and software giant, Bill Gates, said that it is “neutral” regarding the bitcoin currency.

But Musk’s competitor at the top of the list of the world’s richest people told Bloomberg Monday that “if you are not as rich as Elon (Musk) then I think you should just watch what happens.”

This advice is perhaps the best answer to the question whether it is better to invest in digital currencies or not.

The article from the source


Related Articles

Back to top button