Cryptocurrencies continue to grow and are no longer just an investment
While global economic activity came to a standstill due to the COVID-19 pandemic, cryptocurrencies were to experience exponential growth that, even a year after the start of the pandemic, continues unstoppable, with some of them, such as bitcoin, reaching record highs. This is possibly the best known of them all and its growth since March 2020 is 1000%, reaching a value of 42,673 euros per bitcoin.
What was unknown a short time ago and generated some uncertainty among the public, is now an opportunity for millions of investors who see new business opportunities in cryptocurrencies. And not only individuals. Companies of the stature of Tesla and Mastercard have bet heavily on currencies such as Bitcoin.
The case of the company led by Elon Musk is even more controversial. Not only did it announce the acquisition of 1.5 billion dollars in Bitcoin - a purchase that was made in Japan, according to documentation filed with the US Securities and Exchange Commission - but it also made it official that Tesla will begin to accept this currency as a form of payment. However, the Tesla and Space X CEO announced that this move "will be subject to applicable laws and initially on a limited basis".
However, the strategy employed by the South African-born entrepreneur is not entirely welcomed. Nouriel Roubini, a highly respected US economist who predicted the 2008 subprime mortgage crisis, believes it is "irresponsible" and amounts to "market manipulation". Musk's activity on social networks such as Twitter has generated much controversy in the business community: "First he takes an individual position on bitcoin, shoots up its price, and then announces the Tesla investment," Roubini said, adding: "The SEC (Securities and Exchange Commission) should investigate people who have an impact on the market capable of manipulating asset prices. It is also criminal behaviour."
Security was the most questioned aspect not too long ago. Today, however, it is precisely the high level of protection that cryptocurrencies offer that has led even banks to include them in their portfolios, as is the case with Ripple and Ethereum. If there is a downside to this innovative currency, it is the one pointed out by the CEO of the Corum Center for Strategic Studies and Economic Research in London, Tariq Al-Rifai, who argues that cryptocurrencies do not have the same characteristics as a conventional currency, in which fluctuations are minimal. In contrast, in the case of cryptocurrencies, fluctuations are much greater, making it difficult to maintain the real value of the units purchased. A clear example is the significant drop experienced by Bitcoin at the end of 2017, when its value plummeted from $20,000 to $3,000.
There are more than 1,300 cryptocurrencies in the world today. And now, both large companies and individual investors see them as an opportunity to diversify their investment, as a means of hedging against inflation and also as a store of value in a world in which everything seems to indicate that physical money is destined to disappear. Cryptocurrencies were created to stay, not to be a passing thing. The latest figures indicate that there are between 5.8 and 11.5 million wallets storing Bitcoin and other cryptos. Considering that every investor has two, that would mean that between 2.9 and 5.8 million people are active users of cryptocurrencies, a figure that, on the other hand, is growing all the time. And it does not look like it will stop doing so after, for the first time in history and thanks to Tesla, cryptocurrencies are accepted in exchange for physical goods, such as the cars manufactured by the company led by Elon Musk.
