Visionary and billionaire Elon Musk has set off a huge trend with his announcement to invest in bitcoins, which are trading at around $ 46,000 .
The price of bitcoin has reached record values that already exceed $ 46,000 on the stock market. / Photo: Unsplash
LatinAmerican Post | Brandon Martínez Salazar
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Leer en español: ¿Qué cambia en el mundo con una Bitcoin, cada vez más consolidada?
Visionary Elon Musk continues to amaze the world. In recent days his new business strategy of investing from his company Tesla, the millionaire sum of 1,500 million dollars in cryptocurrencies, has attracted attention . As a result of this decision, many questions have been raised, as this caused the price of bitcoin to reach record values that already exceed $ 46,000 on the stock market. According to the visionary, what he is looking for with this great investment is to have greater flexibility and thus diversify cash returns, ensuring that he had to invest much earlier in this sector.
On the other hand, he opened the door to accept bitcoin as a payment method in the marketing of his vehicles. However, Musk's announcement opens the debate on the consequences it will have on cryptocurrencies and the behavior of this sector on the Stock Market.
Will they have greater validity?
Gabriel Makhlouf, a member of the governing council of the European Central Bank, recalled in an interview given in January for Bloomberg that all investments made in bitcoin are not safe and those who opt for them must prepare to lose all their capital. According to his statements, there is no reason for investment in a business in which there is basically no certainty of anything.
In the same way, Christine Lagarde, current president of the ECB and former director of the IMF, has also said in a Reuters Next event that cryptocurrencies such as Bitcoin do not have a solid base and for that reason she has described it as a “highly speculative asset ” Due to its unreliable behavior.
Now, bitcoin is considered a very volatile cryptocurrency so this event may worry many investors, especially those who are conservative and Tesla would have to take those risks, says the chief market analyst at Markets.com, Neil Wilson.
Last week at @MicroStrategy Bitcoin for Corporations conference, I presented my views on corporate #bitcoin strategies to preserve capital, generate income, and create shareholder value.https://t.co/qSWSQ0f5cS— Michael Saylor (@michael_saylor) February 11, 2021
For the moment, bitcoin and other cryptocurrencies have increased their price in values never seen before but their extreme volatile behavior and their little support from central banks could not guarantee the same validity in the long term that it has now.
Will the World Banks lose control of the markets?
The World Banks continue to have control of the existing currencies and currencies, as well as control of all the movements that are made in the political and economic sector. It could hardly be said that cryptocurrencies are going to replace the traditional bank because of Elon Musk's decision and the appreciation that his investment in bitcoin produced. The reason this is unlikely to happen is because banks like money and that is what justifies their very existence. Instead, cryptocurrencies belong to digital media that evade the control of States and all entities that are in charge of supervising financial markets in the world, so it is also common for them to be used for the sale of drugs and weapons without leaving a trace.
Although for some these digital means of exchange is a hopeful fact because their philosophy is to free people from the financial system that has always existed and that has been considered oppressive, this dream is far from coming true, because the great powers of the planet have reliably rejected its implementation.
The Nobel Laureate in Economics, Joseph Stiglitz, at the time assured on Bloomberg Television with Francine Lacqua and Tom Keene: “Bitcoin is successful only because of its potential for circumvention, lack of supervision, so it seems to me that it should be banned. It does not fulfill any socially useful function ".
In other words, what Stiglitz is trying to say is that cryptocurrencies are basically a bubble that plays on people's emotions while having a roller coaster effect. Therefore, they do not benefit anyone, they may have some positive effects in certain respects while it is on the rise but they are also the best transfer method for those who engage in illegal activities. In countries with hyperinflation it has been seen as an optimistic way out of the crisis. The banks do not support it and with the support of the States they have no reason to allow it to be officially accepted. In conclusion, users are the ones who run the greatest risk of losing their investments in a system full of uncertainties and that remains distant from full acceptance of its use.