Cryptocurrency – The bubble of the 21st Century or a safe investment
As the Swedish “Finansinspektionen” stated this week, there is no reliable way to value cryptocurrency. The value consists of people believing that the value will increase or at least remain.
Bitcoin has had a huge increase in value in recent months. A bitcoin now costs the equivalent of SEK 380,000. In October, it cost 100,000. In 2012, the price was just under SEK 20. But other cryptocurrencies such as Etherium and Binance coin have also risen sharply in value in recent times.
“It is much like the stock market, it often tends to be the case that one day when the stock market goes down, everyone tends to go down. In this way, the cryptocurrency market is connected. If bitcoin goes down, others tend to follow suit” – Johan Javeus, chief strategist at SEB.
Earlier this month, bitcoin was almost two-thirds of the entire cryptocurrency market, and the total value of bitcoin amounts to the equivalent of seven thousand billion kronor. What the future looks like is difficult to answer, says Johan Javeus.
What determines what value bitcoin will have in the future depends on what spread it will have in the economy. Those who are enthusiasts have the image that bitcoin will knock out the dollar in the future and become the major unifying currency, then the value will be much greater than today.
If you instead believe that it will not happen, but that states and banks will regulate this or if bitcoin is out-competed by other cryptocurrencies, the price will go the other way.
Is Dogecoin the next big cryptocurrency?
An upstart in the crypto market, dogecoin, started as a joke in 2013 and financed the year after the Jamaican bobsled team’s participation in the Winter Olympics. Now the currency has received a lot of attention again.
Dogecoin is a parody of a popular joke picture of the dog breed Shiba Inu that flourished on the internet around the year 2013. The creator of the cryptocurrency, Billy Markus, says in an interview with the Wall Street Journal that he could never believe that the joke would end in anything, but today the value of the currency of the equivalent of SEK 60 billion can hardly be joked about.
The latest rush to the cryptocurrency came in the aftermath of the Gamestop hysteria when Elon Musk tweeted a picture of a newspaper cover with a dog on it, which his followers quickly realized was a dogecoin and the currency ran away.
There is an unlimited number of dogecoins, which from the start were worth 0.00026 US dollars, which can be compared with the current value of 0.05 US dollars. What started as a parody in 2013 is now the 14th largest cryptocurrency on the market.
