“The fear of a Bitcoin crash is unfounded”
Interview: Christian Kolbe
published: 04.09.2017 at 19:56 CET
Original Text / Interview: https://www.blick.ch/wirtschaft/krypto-experte-daniel-diemers-44-im-interview-die-angst-vor-einem-bitcoin-crash-ist-unbegruendet-id7251752.html
Credit Suisse is planning to develop its own cryptocurrency together with UBS and other major banks. Do the big players now also want to cut themselves a piece of this pie?
Daniel Diemers: That is a very good sign. The big banks were rather skeptical about internet currencies like Bitcoin just a few years ago. Now this trend towards cryptocurrencies is accelerating, now everyone is talking about it. Cryptocurrencies are being taken seriously. That’s a good thing, because there are countless applications for them.
What do I gain in everyday life from the fact that Bitcoin exists?
Bitcoin is the most popular internet currency at the moment. It can be used to send money quickly and easily around the world, for example to relatives in Australia. After a few minutes, the recipient has her money on her PC or cell phone.
But I still can’t buy a coffee with Bitcoin.
That’s not true. There are already credit cards linked to a Bitcoin account, and even a company in Switzerland that pays its employees with Bitcoin. It’s a Bitcoin startup that wants to use it to underline its confidence in the Internet currency and its belief in the technology behind it.
Bitcoin has made headlines in recent weeks, mainly due to the enormous rise in its price. Many are no longer asking if, but when a crash will occur.
I do not sense this fear. On the contrary, many institutional investors first became aware of Bitcoin due to the headlines and the increase in value and are now getting in. That increases demand and thus the price.
However, this already sounds a bit like a speculative bubble that could burst at some point.
With any currency, there can be a drop in value, for example, if a large investor exits and takes his profits. Price fluctuations are part of the financial markets; in the long run, the hallmark of a functioning market is that it goes up and down. The fear of a Bitcoin crash is unfounded in my eyes!
After all, Bitcoin is far from being the only internet currency, there are now over 1300 different such currencies – and new ones are added every week.
The speed at which new cryptocurrencies are created is indeed impressive. According to our calculations, there have been more than 60 per month since August alone. Incidentally, three of the six largest ICOs (Initial Coin Offerings, i.e. issuance of a new Internet currency – ed.) in recent months have taken place in Switzerland! Worldwide, Internet currencies worth $4.6 billion have already been created this year, nineteen times as much as last year.
Why does the world need hundreds of these Internet currencies?
It’s not just about creating more means of payment. An ICO can also be about finding the funds needed for a project, for example, to finance a music project or an online store. The key thing is that a large enough number of people have confidence in the currency or the project in question. Not all of these new Internet currencies will last.
So cryptocurrencies can disappear or collapse again. Would that have consequences for the real economy?
No, certainly not at the moment! The amount of money in circulation in the cryptocurrencies and tokens in question is still far too small for that. But the importance of cryptocurrencies as a means of payment will certainly increase strongly in the coming years. Whether this development will be more of an opportunity or a risk for the real economy is still completely open.
The region around Zug is also known as Crypto Valley. Why is Switzerland so important for the emergence and development of Internet currencies?
First of all, it’s a great compliment to the innovative power of our economy. Many companies from abroad come to Zug because they find good framework conditions and many creative minds here. People who are willing to dare to do something new.
Do Bitcoin or other cryptocurrencies have the potential to replace the Swiss franc as the main means of payment in the near future?
No, Bitcoin is an option in Switzerland, but not a must-have! We have stable banks and a functioning central bank – the Swiss franc will remain with us for a long time!
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