• Maximilian Kunkel

"This is a bubble of speculation."

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"Bitcoin, Ethereum & Co. will never become widely accepted currencies," warns Maximilian Kunkel, chief investment strategist in the UBS Chief Investment Office for Germany: "Leave it alone."

I am not at all surprised that crypto currencies like Bitcoin attract so much attention today. So is just that with investments whose price has increased twentyfold within two years. They should resist the temptation to invest capital there anyway or precisely because of that.

The most important question that investors must answer in this context is: Will crypto currencies ever be able to replace the current common currencies?

A currency has two important roles to play. It must be a widely accepted transaction medium. And it must serve as a store of value. Let's see if that works on the crypto currencies.

As a transaction medium, currencies supported by von Regierungen have an unbeatable advantage. Alle Governments demand taxes. In developed countries are now ein Drittel all transactions tax payments. Companies and individuals will also favor in Zukunft currencies with which they can pay their taxes.

Of course, a company could also accept crypto currencies in its sales. Sie would then take on an enormous currency risk. Denn it has to pay its taxes in the currency that governments accept. What if Bitcoin and Co. lose value and the tax burden in Euro remains? The same applies if companies pay their employees or suppliers in crypto currencies. Then they bear the currency risk. Mal honestly, would you accept that?

As long as governments do not allow tax payments in crypto currencies, their field of application remains very limited. And why would they allow that? Regierungen would like to be paid in the currency in which their obligations exist - and which they can control if necessary. Therefore, it is highly unlikely that a large proportion of transactions in an economy will ever be conducted via crypto currencies.

Can crypto currencies be a reliable store of value? In the case of the "old" currencies, central banks try to keep the value more or less stable. To achieve this, they adjust, for example, currency supply to demand.

This becomes difficult with decentrally organized crypto currencies. The offer of a single crypto currency cannot decrease. If demand falls, the price falls. This also explains their strong price fluctuations. This limited offer of individual crypto currencies is considered by many to be the main argument for investing in them. Sie are hoping for protection against the money glut of central banks. But they forget that although the offer of individual crypto currencies cannot simply be changed, the offer of all crypto currencies can increase infinitely. Today there are already more than 1200. Anyone who wants to create another one can do so. If a new crypto currency proves to be technologically superior, the demand for the old crypto currencies suddenly collapses. I wouldn't bet on capital retaining its value in the long run.

A special phenomenon shows how irrational investors are now in this area. Every news item in which Firmen announces a new activity in the Dunstkreis von Kryptowährungen is good for a massive jump in the stock market. I then looked at the characteristics of a speculative bubble. Typical is: The idea must be new, the possible economic return must be far away, and there must be a lot of investors who don't care about the actual benefit.Buy Sie only because they hope that the price will rise.

All these characteristics apply to the crypto currency bubbles. Ultimately, it will only be the blockchain technology underlying the crypto currencies that will create sustainable added value in the economy. Die Crypto currencies themselves are not necessary for this. Their bladder will go the way of all bubbles - it will burst.

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