Cryptocurrencies are sinking: Who doesn’t want them to succeed?

You are the tech king elon muskmanager tesla and on the way to become the next owner of Twitter one of the sounds best suited to the use of digital currencies Like Bitcoin, its adversary is undoubtedly businessman Warren Buffet. This prolific 92-year-old investor, one of the richest men in the world, refused to bet on these assets, thinking they “produced or contributed nothing” unlike a farm or apartment. “If you offered me all the Bitcoin in the world for $25, I wouldn’t accept it because what would I do with it? I would have had to sell it again,” he explained last April.

The original dream of cryptocurrencies is a alternative to traditional moneyBlockchain, which allows payments to be made between two parties without the need for intermediaries such as financial institutions, is possible (albeit not efficient) thanks to Blockchain. There are those who see this so-called techno-libertarian will to develop a political agenda. It weakens the capacity of the state to control its assembly. taxes. But this goal is still utopian. “Cryptocurrencies are born as a counterpoint to the power of central banks (…) but the industry knows they won’t be used until they’re regulated,” says José Luís Muñoz, director of graduate degrees in blockchain. Polytechnic University of Catalonia (UPC). Difficulty using them as a payment method Currently, its main use is investment assets for making money and speculating.

Volatility and risk

One of the reasons for the rejection of cryptocurrencies is their volatility. The value of money – whether physical or digital – is based on a social consensus. When we exchange a euro for a loaf of bread, it is the users’ trust in it, not the metal alloy stamped with European iconography, that gives the coin its value. And this trust is based on the support of governments, monetary authorities and investors. Cryptocurrencies are blind faith without a network to stop the blows..

In addition to the growing hype and the anticipation they inspire, the value of cryptocurrencies actually stems from two promises: their scarcity – Bitcoin is limited to 21 million units – and its decentralized system. As early as 2013, Nobel Prize in Economics Paul Krugman showed his skepticism: “Money should be both a medium of exchange and a reasonably stable store of value.. And it remains unclear why Bitcoin should be.” After hitting an all-time high in November, its value has since dropped more than 50%. With over 10,120 assets in circulation, the cryptocurrency market is in full swing.

Fraud and tax avoidance

This decentralized system means that cryptocurrencies operate in an environment devoid of laws, central banks and tax authorities. A wild west where the gold rush is digital. In this environment, all kinds of theft and fraud increased. This Cryptocurrency Crimes Up 79% Last Year move more than $14,000 million in parallel with its growing adoption. Without any regulation, victims of these scams are left completely unprotected. “Vulnerable families will pay the price”, stated Krugman. Jamie Dimon, managing director of financial giant JP Morgan Chase, said they were “frauds”, “worthless” and likened them to a bubble that will “pop” sooner or later.

Others pointed out that without any oversight, cryptocurrencies attract criminal groups as they facilitate anonymity and practices such as: money laundering and tax avoidance. This is what governments like China, Turkey or Colombia prohibit its use. Other countries, such as the United States or EU members, have chosen to promote this technology by protecting it under a regulatory umbrella.