The Bitcoin price exploded to almost 24,000 francs over the holidays. Influencers, Bitcoin traders and celebrities outbid each other with happy news. Professional investors now also want a share in the profits.
Interview with Dr. Daniel Diemers
(first published by 20 Minuten on 28.12.2020; in German)
By Fabian Pöschl
Summary:
- The Bitcoin price has temporarily increased by 25 percent over the holidays.
- Influencers, Bitcoin traders and celebrities are drawing attention to the price gain on social media.
- Experts predict a price of 40,000 to 50,000 francs (ca. 44,000 to 55,000 USD) for one Bitcoin in 2021.
Bitcoin is at an all-time high. The price rally of the cryptocurrency did not take a break over the Christmas holidays. The price of a bitcoin is aiming for the 30,000-franc mark – in mid-December, a bitcoin cost 20,000 francs for the first time, and less than 5,000 francs last May.
Accordingly, the digital currency is in hot demand. Influencers and celebrities have also fallen for the hype. On social media, they show their joy at the leaps in profits.
Just two years ago, star investor Warren Buffett compared the digital currency to rat poison and advised investors against Bitcoins. But more and more are preying on the warning – at the beginning of this week, Bitcoins worth over half a trillion dollars were in circulation for the first time.
20 Minuten asked Swiss blockchain expert Daniel Diemers about the reasons for the Bitcoin price rally. Diemers is a start-up coach and co-founder of the exponential technology company SNGLR Group.
Why is the Bitcoin value rising so strongly now?
The price explosion surprises even those in the know. “Even the die-hard crypto scene has not yet experienced such a rise,” says Daniel Diemers. Bitcoins have become socially acceptable and the critics have fallen silent. In the last few months, the big institutional investors have invested more than 12 billion dollars in the Bitcoin business. In addition, the payment service provider Paypal, with around 300 million users, has been accepting the cryptocurrency since November.
Bitcoins have become socially acceptable and the critics have fallen silent
What does Elon Musk have to do with the Bitcoin boom?
Tesla boss Elon Musk is always stirring up the markets with his Twitter comments. Recently, he wrote positively about another cryptocurrency, whereupon its price rose by 20 percent. Musk could also have helped the Bitcoin to rise, because last week he inquired whether a conversion of Tesla assets into Bitcoins is possible. But the expert believes the effect would be small. Musk would probably not invest the entire Tesla capital of 100 to 200 billion dollars at once, because the price fluctuations would then be too great.
How much further will the share price rise?
The trend is pointing steeply upwards. Some experts predict a price of 40,000 to 50,000 francs in 2021. According to Diemers, there is always a lot of hope involved in the forecasts: “There is simply no exact forecast and there are too many variables involved.” He points to massive price corrections of up to 80 per cent downwards in the past years, which no one had expected. Although the price rose again afterwards, as long as bitcoins are not traded on a large scale on the classic stock exchanges, there will always be such fluctuations.
Who is making a killing now?
“Now is the time for investment banks and day traders,” says Diemers. They are more experienced in dealing with the high price fluctuations. Private investors often buy at exactly the wrong moment. “That was already the case in 2017, when many newcomers bought Bitcoins shortly before a price correction,” says Diemers.
Cryptocurrencies are en vogue and fit well into the digital lifestyle
Why do young people suddenly have a crypto portfolio?
The Bitcoin hype has also caught on with the young. Saving and investing money is suddenly no longer considered uncool. “There is little respect to be gained with investing in shares among friends. Cryptocurrencies, on the other hand, are en vogue and fit well into the digital lifestyle,” says Diemers. At the same time, distrust of banks and large corporations is growing.
Are Bitcoins the new shares?
Diemers prefers to compare bitcoins to digital gold rather than shares, because you don’t acquire ownership of a specific company via them. Trading in Bitcoins is not yet as secure as trading in shares because the 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 Swiss tax return received an update for bitcoin assets. However, Diemers sees a major shortcoming in the fact that there is still no professional Bitcoin advice from banks available, for example.
Should I still get into Bitcoins now?
The price of a Bitcoin is significantly higher than it was before Christmas. But Diemers thinks it is a good time to get in. Especially since the forecasts are pointing upwards. However, one has to invest for the longer term and should not be afraid of fluctuations and major corrections. In addition, he advises, as with share investments, to only invest amounts that one is also prepared to lose. “You should seek advice from friends or invest smaller amounts over a longer period of time,” says Diemers.
This is a non-authorized translation by SNGLR with the friendly support of deepl
All rights reserved by the author and the publisher
