Wednesday, 08.01.14, written by Bernd Lauberg
Bitcoins as an investment have been hotly debated by the financial world for months. Now that the online game company Zynga wants to accept the digital currency, the Bitcoins price shot up. Last year alone, the price climbed from around 20 to as much as $ 1,200. But the German Bundesbank recently warned: Bitcoins are highly speculative.
Bitcoin price in 2013 was already around $ 1,200
Bitcoins as an investment? Many financial experts will advise against it. Because not a few of them are just waiting for the speculative bubble to burst around the Internet currency. After some Central Banks and also the European Banking Supervision have voiced their concerns over the Bitcoins, warns now also the German Federal Bank. “Due to their design, bitcoins are highly speculative,” said Carl-Ludwig Thiele, a member of the board of the Bundesbank, to Handelsblatt. What about the warnings?
Bitcoins: No safe investment
The fact is: bitcoins are not a safe investment. As Thiele emphasizes, there are no state guarantees, so that a total loss for investors is possible in principle. In addition, the exchange rate fluctuates strongly. Within a few days, the price can vary by a quarter. In April 2013, the currency lost even 60 percent of its value. Although the price has stabilized again, nobody can guarantee that it will be the same at the next crash. Economists are not in vain warning against a speculative bubble.
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Bundesbank warns of Bitcoins
While bitcoins in the US are booming, Thiele sees the digital currency in Germany as a niche phenomenon. Approximately 70,000 transactions are to be held daily worldwide with bitcoins, which represents a negligible share in Germany alone in view of more than 35 million direct debits. But it is expected that the number of transactions will increase. More and more businesses are now accepting bitcoins as a means of payment.
Bitcoin as an investment? Investors take risks
The European Banking Authority warns investors of various risks that Bitcoins bring with them as an investment. In addition to another crash and the lack of regulation of the trading platforms, the danger of losing bitcoins by hackers is a major concern. The chances then to regain his capital are extremely low. In addition, Bitcoin owners are not protected by European law for virtual payments. And: Bitcoin deals are anonymous. This is seen as an advantage by many users, but also gives criminals the opportunity to launder money. Authorities can therefore close trading platforms in the short term. Consumers are then denied access to their capital.
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Key Data for Bitcoins
Bitcoins have been around since 2009. The currency is calculated using complicated formulas from computers, which is called “mining” or “mining”. The amount is limited to 21 million bitcoins. There are currently around 12 million bitcoins on the market.
Bitcoin future uncertain
The current Bitcoin price is around $ 1,000 or around € 700. Even if financial regulators are alarmed, the money supply on the Internet is still growing. Financial professionals in the US are already looking for new investment opportunities. In Germany, the German Federal Ministry of Finance has now recognized Bitcoins as legal tender and taxable as a means of payment. As the digital development progresses, it remains to be seen. Currently, two scenarios of horror are possible: On the one hand, the course may collapse and not recover. On the other hand, Bitcoin could one day be regulated by banking regulators or other bodies that would put an end to speculation.
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