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Bitcoin & Co. – Gold Noise in Cyber ​​Currencies Stokes Fear of Crash News

Saturday, August 19th, 2017 | Economy

Actually, they are nothing more than zeros and ones from the vastness of the Internet. For many investors, however, cyber currencies such as bitcoin or ethereum have a real value. This is the reason why more and more start-ups want to cut a slice and push with new virtual money to the stock market.
The US billionaire and investor Howard Marks compares the current hype with the dotcom bubble at the turn of the century, whose burst he had predicted. "Digital currencies are a fashion phenomenon," emphasizes Marks. Their value is dependent solely on the willingness of the users to pay for them. The head of the Austrian Erste Group Bank, Stefan Dörfler, is similar. Bitcoin is indeed an "exciting phenomenon", but not an official cash and "highly speculative", he recently told the daily "Österreich". Therefore, he recommends an investment.
For the advocates of the digital currencies, however, it is clear that they are now really taking off. "It is nonsense to call the whole thing a bubble, we are only at the beginning," says Miguel Vias, manager at the crypt-financing provider Ripple.
Course fire and re-emission
Bitcoin is created around the world by complex computer algorithms. Neither a government nor a central bank are behind it. The course is determined solely by supply and demand. Bitcoin & Co. are traded on special exchanges and can be exchanged into real currencies like euro or dollars. Since cyber money is so far only accepted by a few companies and organizations, it often serves as a purely speculative object. It offers the possibility to move large amounts anonymously around the world, and is therefore suspected of being used for money laundering or terrorist financing.
According to the CoinMarketCap branch service, the value of cyber currencies traded on platforms such as BitStamp is about 102 billion euros. This is almost seven times as much as at the beginning of the year. The sum corresponds roughly to the stock exchange value of the largest European software producer SAP and is about half of Bitcoin.
The fast-growing market is due not least to the price explosion, which is by far the most important cyber currency, which is also one of the oldest. A bitcoin cost recently about 4500 dollars. This means that the share has quintupled fivefold since the beginning of the year. Bitcoin was split up in Bitcoin and Bitcoin Cash at the beginning of August. In addition, there was a software update, which accelerates the so-called digestion – the production of Bitcoin by the calculation of complex formulas. The maximum number of Bitcoin is limited. The more of these are in circulation, the more expensive the calculations.
Only the strong Survive
Parallel to this, emerging software companies are offering new cryptos. In 2017, by the middle of July, they had raised almost one billion euros for investors by way of the so-called Initial Coin Offerings (analogous to the initial public offering, the stock exchanges of a stock company). This is about ten times as much as in the previous year. In the shadow of the Bitcoin Hypes, the courses of the new cyclic currencies are also growing rapidly. According to CoinMarketCap 850,
Critics criticize the lack of regulation of cyber money. "There are values ​​created from nothingness," says Rob Moffat, a partner of Balderton, a venture capital company specializing in financial software companies. "There is no substance behind it, everything is based on public perception." Japan and Australia have already incorporated Bitcoin into a legal framework. Japan has accepted the currency in spring as an official payment. In the US and Switzerland, applications for the admission of listed bitcoin funds (ETFs) have been submitted to the competent authorities.
Anyone investing in Bitcoin needs to adjust to significant price fluctuations. "There will also be such turmoil in the future, especially as a price exaggeration can already be seen," says analyst Timo Emden from the brokerage house DailyFX. "But as soon as bitcoin and other currencies have arrived in the mainstream, the course is no longer stopping." On the way, Bitcoin & Co. would have to go through a tough read-out process, emphasizes Ripple manager Vias. "Will some of these currencies disappear, of course, we will experience Darwinism in real-time, only the strong will survive."


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