On Thursday, the price of a house jumped by more than 51 thousand, reaching many times what it was a year ago, which raises an important question: Is it a bubble or a safe haven?
American billionaire Elon Musk may have charmed investors from the giants of the money market in the United States, when he threw the decision to invest $ 1.5 billion in bitcoin in front of them, to attract the digital currency, whose price exceeded $ 50 thousand, on Monday, more buyers who were lured by its amazing growth, despite Concerns of many market regulators.
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But Elon Musk is not the only billionaire who charmed Wall Street and New York investors with his bold decision. At the beginning of this year, investment bank JP Morgan expects the value of Bitcoin to reach a price of $ 146,000 if it establishes its position as a safe investment asset.
lure of central banks
Professionals in this sector, such as Eric Demuth, head of the European cryptocurrency exchange Bitpanda, believe that the issue has been resolved and that Bitcoin has become a “new digital gold” accepted by investors wishing to diversify their assets and protect themselves from inflation.
“Soon, we will find Bitcoins in central bank reserves,” he asserts.
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“They are very volatile assets, which is risky, but at the same time ten years have passed since we said that Bitcoin would collapse, and it is still there,” says researcher Matteo Bovar of the Faculty of Economics in Toulouse.
He added that “Bitcoin is moving towards more regulated markets” and its volatility is decreasing even if its volatility remains ten times higher than the stock market
Europe warned
Currently, monetary institution officials are concerned about this virtual currency created by unknown people and managed through a decentralized network. European Central Bank President Christine Lagarde confirmed in early February that Bitcoin “is not a currency” and that it is “an asset of a lot.” From speculation. “
There is a clear “marketing aspect”, said Alexander Paradé, market analyst at IG France, as some companies “include small amounts of Bitcoin in their cash flow to show that they are in line with technology news,” noting that the speculative fever has not yet dominated Europe.
The President of Bitbanda said with regret that “the same thing is always happening. Europe is two years behind the United States in adopting new technologies,” and he believed that the old continent could catch up in the coming years.
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Analysts at BitTree, a cryptocurrency company, said that Europe’s share of Bitcoin accounts for only 10% of investment fund purchases.
“The main reason for this is the severe restrictions imposed by the regulations,” said company founder Charlie Morris.
He added that he does not expect to see European companies follow the example of Tesla, the electric vehicle manufacturer led by Elon Musk. Musk, the world’s wealthiest and enthusiastic supporter of cryptocurrencies, announced an investment of $ 1.5 billion in Bitcoin.
Digital giants like Google and Apple that have an abundance of money are investing heavily in the stock market, but Tesla has emerged by entering the volatile world of cryptocurrencies.
The market is on fire
Not all investors like Elon Musk’s adventures. Since Tesla bought Bitcoin, the group’s stock has fallen sharply. “This has cost them more than 60 billion of their market capitalization,” said an investor in the cryptocurrency market.
When prices began to rise at the end of 2020, cryptocurrency supporters were happy to see that those supporting the rally were professional investors, not individuals, as in 2017, when prices rose before their collapse in early 2018.
So many players are waiting for a sharp price correction, without however abandoning the cryptocurrencies.
“As happened during the internet bubble, many new products linked to Bitcoin will stop, but other products that will be better capitalized and more solid will remain,” said Alexandre Paradeh.