Should I invest in Bitcoin, Cardano & Co.?

“The crypto market is experiencing its very own year 2000,” writes one reader, drawing a comparison to the dot-com bubble that burst at the time. At the beginning of the millennium, many technology and Internet companies boomed and were valued extremely highly on the stock markets. After some time, however, it became clear that many of these companies would not be able to deliver on their promises. As a result, the stock market collapsed.

The crypto market has also recently experienced significant upheavals. Bitcoin, for example, has lost 56 percent of its value compared to its record high in November 2021. We asked the Handelsblatt readers whether this was the end of the crypto hype.

“A new market is first put to the acid test,” writes one reader, adding, “The days of a currency going up 100,000 percent in five hours on a new issue are behind us – like an IPO for an Internet company.” Another thinks that greater transparency and regulatory requirements will stabilize the market in the future.

Another reader would rather avoid “overregulation”, as he writes, in order not to nip the young and innovative technology industry in the bud. Like him, many are primarily looking at the advantages of the technology. For example, one reader believes that crypto projects will completely change the way we shop, consume information, and interact with each other. We should therefore “look at crypto strategically and keep the big picture goal in mind.”

Another reader thinks that the potential of blockchain technology is far from exhausted. However, he also does not assume that the current cryptocurrencies will have a fixed monetary policy position in the financial markets.

There are also Handelsblatt readers who are even more skeptical about the subject. For example, one reader considers cryptocurrencies “a prank” and writes that he has never understood what cryptos are supposed to be good for. Another sees them as a “windy object of speculation with no intrinsic value”. In his opinion, we are too dependent on central banks “which can at least partially correct extreme dislocations in the markets and thereby protect both our markets and our prosperity”.

We have put together a selection for you from the letters from the Handelsblatt readers.

A speculative object for enthusiasts

“I always saw cryptocurrencies as a windy object of speculation with no intrinsic value. A decentralized ‘free’ digital currency never seemed realistic to me, since we are too dependent on the central banks, which can at least partially correct extreme distortions in the markets and thus protect both our markets and our prosperity.

The fact that some want to break away from precisely these central banks with the help of cryptocurrencies seems simply absurd, as we feel the need for monetary authorities, especially in the current geopolitical situation.

But that doesn’t mean that cryptocurrencies aren’t legitimate. However, they should be recognized for what they are: a speculative object for enthusiasts and all those investors who are looking for risk-based returns.”
Calvin Pomplitz

accept failure

“Unfortunately, the term ‘crypto’ is often reduced to bitcoin or failed projects in the media and this doesn’t do justice to reality.

Perhaps bitcoin is not an ideal store of value or means of payment in the sense of a currency (volatility, fees and low speed show this), but the thought and technology behind the distributed ledgers has now matured and is much larger than the original idea and concept of ‘Satoshi Nakamoto’.

In an innovative society, failure must also be accepted, because the next iteration may change our future. Europe should and must play a pioneering role here, and it should not nip the young and innovative technology sector in the bud through over-regulation, because the aim is to promote innovation and ensure lasting economic growth. Germany and Europe (still) have all the cards in their hands, and when it comes to issues related to the Internet of Values, it should not reduce itself to a passive role.”
Martin Graebing

Think about the big picture

“Many see the crypto world only as a highly volatile investment, which I think is very short-term. Because Web3 and the crypto projects behind it will completely change the way we shop, consume information, interact with each other and play. Once these use cases reach the mass market (and we’re well on their way), today’s swings on the value chart will hardly be noticeable as the individual coins will increase in value accordingly and we arrive in a new era of interaction.

Everything that’s happening today (price falls etc.) is panic driven in my view and the headlines we’re seeing today were a few years ago. So, ‘Think about the big picture’ and let’s look at crypto strategically and keep the big picture in mind.”
Robert Lueth

Cryptos are pranks

“I never understood what cryptos are supposed to be good for.

For the blockchain necessary to maintain cryptos (I am deliberately not talking about currencies), incredible amounts of energy are consumed for new bitcoins etc. to be ‘mined’.

There is no equivalent value, just an undefined, squirming community that obviously believes in crypto, sometimes more, sometimes less. I consider cryptos to be practical jokes or in English: It’s a hoax. Cui bono?
Thomas Sauer

>> Read about this: “This is the Lehman moment of the crypto industry” – Here’s what’s next after the Terra crash

trial by fire

“The cryptocurrency hype is certainly coming to an end, but what does that mean in concrete terms for the simple crypto millionaire?

A new market is first put to the acid test – a well-known example is the Internet bubble of 2000. Small, insignificant companies like Microsoft, Apple, Amazon and many more offered an interesting entry price in 2000, similar to what cryptocurrencies do now.

The need for anonymous payment options is increasing, and in the long term the crypto market must too.

However, one thing can be said with great certainty: the days of a new issue of a currency rising by 100,000 percent in five hours are behind us – like an IPO of an internet company.”
Jannis Holzwarth

The potential of blockchain technology has not yet been exhausted

“The potential of blockchain technology is far from exhausted. As technology offers the opportunity to create unique digital assets and smart contracts, the relevance of cryptocurrencies will remain environmental.

However, I do not expect that the current cryptocurrencies will have a fixed monetary policy position in the financial markets, unless there will be a CBDC that will make the advantages of blockchain technology usable in concrete terms for all conceivable use cases.

Nevertheless, cybercurrencies that are controllable through their environment will become more and more relevant for financial institutions. An example of this would be a cryptocurrency that contributes to the environment-bound financing of digital assets.”
Tim Abraham

The bubble has burst

“The crypto market is experiencing its very own year 2000. The bubble has burst, but that need not mean the end as the tech bubble has already shown.

Cryptos that survive due to superior technology will have great chances of being able to establish themselves permanently in the future. The Terra example has shown that market capitalization or stability are not necessarily decisive.

Greater transparency and regulatory requirements will help stabilize the market and make it accessible to risk-averse private investors.”
Sebastian Boosz

Trading with “hot air”

“Bitcoin and Co. have neither an intrinsic value nor an earnings value. The trade in ‘hot air’ must be much more controlled, restricted, and preferably politically prohibited.”
Udo Meinecke

Who knows the power behind Bitcoin and colleagues?

“The word cryptocurrency actually says it all. Difficult to see through and mystical. Certainly well done, and so far nobody seems to have spotted a mistake, just like nobody can name the originator of the bitcoin. A hype that many want to be a part of, including a lot of fortune hunters, which reminds me of investors in Dutch tulip bulbs a few hundred years ago.

Few think from the bottom up and see that money, whether cryptic or physical, has no value. Money is confidence expressed in numbers, to be able to buy something tomorrow for what I would be sure of today. So, so far we trust states that tomorrow our liquid assets are not just a number on paper. We know these states, with all their mistakes and sins.

But who knows the power behind Bitcoin and colleagues? Who do I contact if the plug is pulled? Americans write ‘In God we trust’ on their dollar bills. A rogue who thinks evil of it.”
Christian Hulsebeck

Digital assets are far more than just any coins and tokens

“Anyone who seriously deals with the topic of crypto quickly recognizes its benefits, for example the secure exchange of digital assets without intermediaries. Digital assets are far more than just any coins and tokens, as they are unfortunately often perceived.

Especially in times when global trust is eroding, crypto can also offer solutions for companies, which often need a resilient and trustworthy network.

The technology is in the development phase, and incidentally, ‘accidents’ such as with Terra also happen in the traditional economy – lessons will be learned from this. The fundamental prospects for crypto have never looked better, which many large players have now recognized.”
Markus Horn

If you would like to have your say on this topic in the Handelsblatt, write us a comment, either by e-mail [email protected] or on Instagram at @handelsblatt.

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