When will bitcoin's boom end?

The price of the bitcoin has risen by 1,700 percent since the start of the year. In particular its launch on the futures market, which enables investors to speculate on the cryptocurrency's future value without purchasing actual bitcoins, has led to a new surge in its value. But investors will soon be disappointed, analysts predict.

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De Morgen (BE) /

A currency with no future

The energy costs for the bitcoin currency will soon cause its bubble to burst, economist Paul De Grauwe predicts in his column in De Morgen:

“It takes more and more computers to produce a bitcoin. These computers consume electricity, in other words precious energy resources. ... If the communications costs continue to fall, electronic money becomes cheaper. But with bitcoin things are different. Because more and more of them have to be produced the energy costs keep rising. This is clearly not the currency of the future. Once enough people realise that cryptocurrencies have no future as a payment method, the bubble will burst.”

Aamulehti (FI) /

Man on the street will foot the bill

If the Bitcoin bubble bursts no doubt the high-risk investors won't be the ones who pay the price, Aamulehti fears:

“At the moment a large number of people across the globe seem to have great faith in the bitcoin because its value has soared. Within a month the price of a bitcoin has tripled and is moving towards the 20,000 dollar mark. Economic experts warn of a bubble that, if it bursts, will rock the financial markets and the global economy. .. If and when that collapse comes, it will once again be the average, working, tax-paying citizens who foot the bill.”

The Independent (GB) /

A harmless little bubble

The real economy could easily cope with a sudden plunge in the value of the bitcoin, the Independent contends:

“Right now the total value of all the bitcoin is a bit shy of 200bn. That sounds a lot but actually it is pretty small in terms of the global economy. It is the GDP of Greece. The world economy grows by quite a lot more than that amount every month. Take that out and if there were a serious downturn as a result, the world’s central banks could agree to add that extra cash over a weekend. So in macro-economic terms, a crash in bitcoin would not matter.”

Libération (FR) /

Risky for speculators, good for the economy

Even if the bitcoin disappears in the end the economy will continue to benefit from its efficient system of currency exchange, editor-in-chief Laurent Joffrin writes in Libération:

“Goldman Sachs has shown interest in investing its customers' money in bitcoin. When the hyenas arrive, the antilope's days are numbered. In the meantime, as often happens in the brutal, prolific capitalist system, it may be that a new method of monetary exchange has been invented, this time with no intermediaries, banking fees or costly headquarters. In the meantime, fortunes will be made and no doubt also lost. But economic liquidity will have benefited. The speculators' loss could also be everyone's gain.”

Handelsblatt (DE) /

Don't dismiss it as fraud

If the big banks continue to ignore the digital currency they will miss out and drive their customers into the arms of dubious companies, Handelsblatt warns:

“It's understandable that bankers are burying their heads in the sand and trying to play down the problem. But it's a risky strategy - riskier than going along with the bitcoin trend. Naturally the digital currency entails risk. ... But instead of dismissing the trend as a 'bubble' or 'fraud' the banks should start thinking about how they can help their customers when it comes to bitcoin and co. ... The banks need to get their skates on if they don't want to miss the bitcoin gravy train. If they don't, their customers will look for simple alternatives that really know their way around the crypto-world. And that would really be extremely risky.”