Are cryptocurrencies good for the economy?

The values ​​of the cryptocurrencies Bitcoin and Ether have slumped massively at times. Bitcoin's price plummeted by a good 30 percent and fell to a four-month low of $ 30,000. By the evening, however, he recovered to prices of more than $ 40,000. Ether, one of the largest cryptocurrencies ever, lost almost half of its value and cost a good 1790 dollars at times. Later the currency also recovered. The loss of the market value of Bitcoin temporarily added up to almost half a trillion dollars measured at the highs. This corresponds to the annual economic output of the Netherlands.

The reason for the collapse in prices is investors' fear of stricter regulation of the market. This fear is fueled by news from China. The associations of the Chinese financial industry had recently announced that they would forbid their members to do business with Bitcoin & Co. The prices of cryptocurrencies fluctuated sharply, endangering the economic and financial order, warned the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China.

With cryptocurrencies like Bitcoin, supply and demand alone determine the rate. In addition, business with them has so far hardly been regulated anywhere in the world. Chinese authorities have repeatedly tried in recent years to put a stop to speculation in cyber foreign exchange. Observers assume that after the Chinese advance, other countries will follow suit and impose stricter rules on the hitherto unregulated market with crypto currencies.