Bitcoin is currently causing many hearts to pound – either when they are already invested and have to fear a course correction, or when they are could not yet decide on an investment. For weeks, the price of the cryptocurrency seems to have only known one direction – steeply upwards. This development was fueled, among other things – as we reported – by Tesla boss Elon Musk, who announced that his company would invest in Bitcoin and accept the digital currency as a means of payment in the future. The billionaire currently earns more with this decision than with his automobile business. But critics and skeptics quickly appeared on the scene, such as the famous shortseller Jim Chanos. He sees the Bitcoin boom as a kind of pyramid scheme, “because Bitcoin is only based on finding the next stupid”. Chanos teaches financial fraud at the elite university Yale and is said to have made good money on the Wirecard bankruptcy through short sales last year.
The truth about the progress Bitcoin history is likely to be somewhere in between. Investors who bought Bitcoin earlier this year can now look forward to decent profits, but shouldn’t feel too confident. Because just as they got richer and richer almost overnight, it can also work the other way around. But what about those who have hesitated until now?
Bitcoin, Ethereum and Co: No end of the boom in sight
If we look at the prices, there is much to suggest a current boom, the end of which is not yet in sight: the value of Bitcoin has increased by a staggering 78 percent in the last 30 days , 420 percent plus are at the annual level. The price gains for Ethereum and Litecoin are similarly good. The picture, on the other hand, is less uniform for Ripple and Bitcoin Cash, although these have also achieved 95 and 62 percent growth over the last 365 days.
Will it stay that way and have cryptocurrencies established themselves as a separate asset class? “It is definitely a speculative asset class,” explains Markus Richert from Portfolio Concept Vermögensmanagement. “There are stock exchanges, a trade and I can exchange it for real currencies. However, the intrinsic value is missing. ”And Stephan Witt from Finum Private Finance AG adds why the valuation of Bitcoin and Co. is different now than three years ago with the first boom:“ Even banks and commercial enterprises are now using and investing in this asset class. ”
“ Cryptocurrencies are an object of speculation, ”explains Professor Hartmut Walz, behavioral economist at the Ludwigshafen University of Applied Sciences. He sees the cryptocurrencies as more of a money store, because the supply is limited and the high demand determines the price. Similarly, the assessment under banking law, which legally classifies the cryptocurrencies more as commodities.
Speculation: The rule of the eggs and the basket
But what can private investors do now if they are not yet invested in Bitcoin? That certainly depends on the personal assessment, the time horizon of the investor and his willingness to take risks. It certainly does not make sense to invest too much money, for example for retirement provision, in such speculative investments. A portion of “play money”, which most of us should be between two and twenty percent depending on our risk appetite, can, however, be fully and partially earmarked for more promising (and thus also riskier) investments. It can also make sense to take a look at other currencies such as Ethereum or Litecoin in addition to Bitcoin. The rule that you shouldn’t put all your eggs in one basket applies both to the asset class itself and to the individual cryptocurrencies.
If there is enough capital available, it is also advisable to invest proportionally in a kind of basket made of common crypto currencies such as Bitcoin, Litecoin, Ethereum, Bitcoin Cash and Ripple. Bitcoin is in principle something like the symbol of crypto currencies, but not a key currency that all other crypto currencies follow. Of course, none of this is a recommendation – because nobody can tell us where Bitcoin and Co. will be in one, ten or twenty years. What is certain, however, is that cryptocurrencies in the custody account significantly increase volatility compared to stocks and bonds. Everyone has to decide whether they can withstand the risk of temporary price losses. that have something to do with cryptocurrencies either directly or indirectly, such as hardware manufacturers. Walz reminds the current situation around crypto currencies to the stories of the gold rush in the 19th century. “Back then it was mainly those who sold the gold miners the rubber boots and the shovels got rich.” ( with material from dpa )