Influencers, Bitcoin traders and celebrities outdo each other with good news. Professional investors now also want to share in the profits.
Bitcoin is at an all-time high. The price rally for the cryptocurrency did not take a break over the Christmas holidays either. The price of a Bitcoin is aiming for the 30,000 euro mark – in mid-December, a Bitcoin cost 20,000 euros for the first time, and last May less than 5,000 euros.
Digital money is correspondingly in great demand. Influencers and celebrities have also succumbed to the hype. They show their joy at the leaps in profits on social media (see picture gallery).
Two years ago, star investor Warren Buffett compared the digital currency to rat poison and advised investors against Bitcoins. But more and more ignore the warning – at the beginning of this week, Bitcoins worth more than half a trillion dollars were in circulation for the first time.
The course explosion also surprised those in the know. “Even the inveterate crypto scene has never seen such an increase,” says blockchain expert Daniel Diemers about “20 Minuten”. He is a start-up coach and co-founder of the technology company SNGLR Group. Bitcoins have become socially acceptable and the critics have fallen silent. The price drivers are the large institutional investors who have entered the Bitcoin business with over 12 billion dollars in the past few months. Paypal also caused an increase. The payment service provider with around 300 million users has been accepting the crypto currency since November.
The trend is pointing upwards. Some experts forecast an exchange rate of 40,000 to 50,000 euros in 2021. According to Diemers, there is always a lot of hope in the forecasts: “There is simply no exact forecast and there are too many variables involved.” He points to massive course corrections of up to 80 percent down in the past few years, which nobody expected. Although the price has risen again afterwards, as long as Bitcoins are not traded on a large scale on the classic stock exchanges, there will be such fluctuations again and again.
“Now is the time for investment banks and professional traders,” says Diemers. They are more experienced in dealing with the high price fluctuations. Private investors would often buy at exactly the wrong time. “That was already the case in 2017, when many newcomers bought Bitcoins shortly before a course correction,” said Diemers.
The bitcoin hype has caught the young too. Saving and investing money is suddenly no longer considered uncool. “In the circle of friends there is little respect to gain with shares. Crypto currencies, on the other hand, are in and fit well into the digital lifestyle,” says Diemers. At the same time, distrust of banks and large corporations is growing.
Diemers prefers to compare Bitcoins to digital gold than stocks, as it does not buy shares in a company. Trading bitcoins is not yet as safe as trading with stocks because digital wallets, crypto exchanges and storage media are vulnerable. But trust is growing. The Bitcoin blockchain has been running without interruption for ten years and is supported by a growing community. “I don't know of any IT system that has a similar track record,” says Diemers. Even the tax return received an update for Bitcoin wealth. However, Diemers sees a major shortcoming in the fact that there is still no professional Bitcoin advice from banks, for example.
Investing in Bitcoins involves great risks due to the rate fluctuations. But Diemers thinks the time to get started is good. Especially since the forecasts are pointing upwards. However, you have to invest in the longer term and you shouldn't be afraid of fluctuations and major corrections. In addition, as with investing in stocks, he advises only investing amounts that you are prepared to lose. “You should seek advice from your friends or invest smaller amounts over a longer period of time,” said Diemers.
Tesla boss Elon Musk keeps the markets moving with Twitter comments. He recently wrote positive about another cryptocurrency, whereupon its price rose 20 percent. Musk could also have helped Bitcoin to rise after asking last week whether a conversion of Tesla's assets into Bitcoins is possible. But the expert only believes in a small effect. Musk would probably not invest the entire Tesla capital of 100 to 200 billion dollars because the price fluctuations would then be too great, according to Daniel Diemers.
