Crypto currencies: Value investment or betting investment?

Not only Bitcoin, but crypto currencies in general have risen sharply recently. Bubble or investment? A look at the Altcoin investment.

Especially after the weekend of Ascension Day many people are wondering whether the price increase of the last few months is a sign of greater acceptance by the broad masses or only of greater speculation on the part of a small circle of enthusiasts.

And of course the question arises: within one year until 25 May the total market capital of crypto currencies more than quadrupled. Last week’s big dump faded whether this increase: even after this a rise of 350% was still recorded.

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In the last months many crypto currencies have increased incredibly strongly. The big three (BTC, ETH and XRP) have been talked about a lot, in a recent article I discussed the wildcards NEM and Bytecoin. But a look at the charts shows: partly unbelievable increases can also show crypto currencies, which at least can be seen as experiment (42coin) or even Shitcoin (Infinitecoin, no offense).

As great as such climbs are, so understandable are all the concerns that suspect a bubble in this development.

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Some people suspect that this growth is primarily due to reinvesting previously generated money in new digital assets, i.e. that it is not greater acceptance but only larger whales that drive the price up.

It is doubtful whether many of these now strongly increased in value can hold these, even if investments such as Ethereum or Bitcoin are certainly to be valued differently than the 42Coin or Infinitecoin mentioned.

Ultimately, there are certain parallels to the South Sea bubble or to the dotcom bubble: there is a growing interest, which develops into an intoxication, which disregards all reason and sobriety, which are necessary in the investment.

In this respect one can already see that a bubble is partly present; currencies whose fundamental value can be disputed gain more value than established crypto currencies or digital assets that have a real countervalue.

It is also understandable that the myth of Bitcoin has been repeated in the Ethereum case: Investors shout “I would have invested earlier! “I should have invested more!” “If I hadn’t sold so early.”

As someone so appropriately wrote on Facebook: “Hätte, Hätte, Blockchain chain. Instead of regretting this, investors now hope for the Black Swan, which rises from the rather unknown crypto currencies. This results in the aforementioned rally to increase transactions for the purchase of some small currencies – in order to experience a sudden break either through a brutal dump or problems on stock markets. This in turn leads to a huge sellout and the partial bubble bursts.