Should I invest in Bitcoin, Cardano & Co.?

Bitcoin

Cryptocurrencies have recently been subjected to violent fluctuations. Many investors lost a lot of money in the process.

(Photo: Bloomberg)

“The crypto market is experiencing its very own year 2000,” writes one reader, drawing a comparison with the dot-com bubble that burst at the time. At the beginning of the millennium, many technology and internet companies boomed and were valued extremely highly in the stock markets. After some time, however, it became clear that many of these companies would not be able to deliver on their promises. As a result, the stock market collapsed.

The crypto market has also recently experienced significant upheavals. Bitcoin, for example, has lost 56 percent of its value compared to the record in November 2021. We asked Handelsblatt readers if this was the end of the crypto hype.

“A new market is first put to acid test,” writes one reader, adding: “The days when a currency rises 100,000 percent in five hours on a new issue are behind us – like an IPO for an Internet company.” believes that greater transparency and regulatory requirements will stabilize the market in the future.

Another reader would rather avoid “over-regulation,” as he writes, so as not to snatch the young and innovative technology industry in the bud. Like him, many look primarily at the benefits of technology. For example, a reader believes that crypto projects will completely change the way we shop, consume information, and interact with each other. We should therefore “look at crypto strategically and keep the big picture in mind.”

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Another reader believes that the potential of blockchain technology is far from exhausted. However, he also does not assume that the current cryptocurrencies will have a fixed monetary policy position in the financial markets.

There are also Handelsblatt readers who are even more skeptical about the subject. For example, a reader views cryptocurrencies as “a prank” and writes that he has never understood what cryptocurrencies should be good for. Another sees them as a “blowing speculation object with no inherent value”. In his view, we are too dependent on central banks, “which can at least partially correct extreme market dislocations and thereby protect both our markets and our prosperity”.

We have compiled a selection for you among the letters from Handelsblatt readers.

A speculative object for enthusiasts

“I have always seen cryptocurrencies as a blatant object of speculation with no inherent value. A decentralized ‘free’ digital currency never seemed realistic to me, as we are too dependent on central banks, which can at least partially correct extreme market imbalances and thus protect both our markets and our prosperity.

That some want to break away from precisely these central banks using cryptocurrencies simply seems absurd, as we feel the need for monetary authorities, especially in the current geopolitical situation.

But that does not mean that cryptocurrencies are not legitimate. But they should be recognized for what they are: a speculative object for enthusiasts and all those investors looking for risk-based returns. “
Calvin Pomplitz

accept failure

“Unfortunately, the term ‘crypto’ is often reduced to bitcoin or failed projects in the media, and this does not do justice to reality.

Maybe bitcoin is not an ideal store of value or means of payment in the sense of a currency (volatility, fees and low speed show this), but the idea and technology behind the distributed ledgers has now matured and is much larger than the original idea and concept ‘Satoshi Nakamoto’.

In an innovative society, failure must also be accepted, for the next iteration can change our future. Europe should and must play a pioneering role here, and it should not stifle the young and innovative technology sector in the bud through over-regulation, because the goal is to promote innovation and ensure lasting economic growth. Germany and Europe (still) have all the cards in their hands, and when it comes to issues related to the Internet of Values, it should not reduce itself to a passive role. ”
Martin Graebing

Think of the big picture

“Many people only see the crypto world as a very volatile investment, which I think is very short-term. Because Web3 and the crypto projects behind it will completely change the way we shop, consume information, interact with each other and play. Once these use cases reach the mass market (and we are well on our way), today’s fluctuations on the value chart will hardly be noticeable, as the individual coins will increase in value accordingly and we arrive at a new era of interaction.

Everything that happens today (price falls, etc.) is, in my opinion, panic-driven, and the headlines we see today were a few years ago. So ‘Think of the big picture’, and let’s look at crypto strategically and keep the big picture in mind. “
Robert Lueth

Crypto towers are pranks

“I never understood what cryptocurrencies should be good for.

For the blockchain needed to maintain cryptocurrencies (I am deliberately not talking about currencies), incredible amounts of energy are consumed for new bitcoins, etc. that need to be ‘mined’.

There is no equivalent value, just an undefined, meandering society that clearly believes in crypto, sometimes more, sometimes less. I consider cryptocurrencies to be practical jokes or in English: It’s a hoax. What good is it?
Thomas Sauer

>> Read about this: “This is the Lehman moment in the crypto industry” – Here’s the next thing after the Terra crash

trial by fire

“The cryptocurrency hype is definitely coming to an end, but what does it mean specifically for the simple cryptomillionaire?

A new market is first put to acid test – a well-known example is the internet bubble in 2000. Small, insignificant companies like Microsoft, Apple, Amazon and many more offered an interesting entry price in 2000, similar to what cryptocurrencies do now.

The need for anonymous payment options is increasing, and so is the crypto market in the long run.

One thing can be said with great certainty, however: The days of a new issuance of a currency that rises by 100,000 percent in five hours are behind us – like an IPO of an Internet company. “
Jannis Holzwarth

The potential for blockchain technology has not yet been exhausted

“The potential of blockchain technology is far from exhausted. As technology allows for the creation of unique digital assets and smart contracts, the relevance of cryptocurrencies will remain environmental.

However, I do not expect the current cryptocurrencies to have a fixed monetary policy position in the financial markets, unless there is a CBDC that will make the benefits of blockchain technology concretely usable for all conceivable use cases.

Nevertheless, cyber currencies that can be controlled through their environment will become more and more relevant to financial institutions. An example of this would be a cryptocurrency that contributes to the environmentally sound financing of digital assets. “
Tim Abraham

The bubble is burst

“The crypto market is experiencing its very own year 2000. The bubble has burst, but it does not have to mean the end, as the technology bubble has already shown.

Cryptos that survive because of superior technology will have great chances of being able to establish themselves permanently in the future. The Terra example has shown that market value or stability is not necessarily crucial.

Greater transparency and regulatory requirements will help stabilize the market and make it accessible to risk-averse private investors. “
Sebastian Boosz

graphic

Trade in “hot air”

“Bitcoin and Co. have neither an intrinsic value nor an earnings value. Trading in ‘hot air’ must be much more controlled, restricted and preferably politically prohibited.”
Udo Meinecke

Who knows the power behind Bitcoin and colleagues?

“The word cryptocurrency actually says it all. Hard to see through and mysterious. Surely well done, and so far no one seems to have discovered a bug, just as no one can pinpoint the originator of bitcoin. A hype that many would like to be a part of, including a lot of fortune hunters, which reminds me of investors in Dutch tulip bulbs a few hundred years ago.

Few people think from the bottom up and see that money, whether cryptic or physical, has no value. Money is confidence expressed in numbers, to be able to buy something tomorrow for what I would be sure of today. So for now, we trust states that tomorrow our liquid assets are not just a number on paper. We know these states with all their mistakes and sins.

But who knows the power behind Bitcoin and colleagues? Who do I contact if the plug is unplugged? Americans write ‘In God we trust’ on their dollar bills. A scoundrel who thinks badly of it. “
Christian Hulsebeck

Digital assets are far more than just all coins and tokens

“Anyone who is serious about the subject of crypto quickly recognizes its benefits, such as the secure exchange of digital assets without intermediaries. Digital assets are far more than just any coins and tokens, as they are unfortunately often perceived.

Especially in times when global trust is eroding, crypto can also offer solutions to companies that often need a robust and credible network.

The technology is in the development phase, and ‘accidents’ like those at Terra also happen in the traditional economy – you will learn that. The basic perspectives for crypto have never looked better, which many big players have now recognized. ”
Markus Horn

If you would like to express your opinion on this topic in Handelsblatt, write a comment to us, either via e-mail [email protected] or on Instagram at @handelsblatt.

More: In the past week, Handelsblatt’s readers discussed whether they prefer to work from the office or the home office.

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