Reinhard Panse's Perspectives
Reinhard Panse's Perspectives
Podcast
30.4.2021
A man in the USA puts a few words into the world via a bird and the value of a completely worthless coin adorned with a dog explodes. Sounds crazy, but that's exactly what happened and is probably the best symbol of what is probably the biggest mania of our time: crypto "currencies". The quotation marks are necessary, because Bitcoin & Co. by no means fulfill the functions of a currency.
On the one hand, you would have to be able to pay at any time, which is not possible at all because transactions take too long even for everyday shopping. Or will we have to wait a few minutes at Edeka in future until the doorman lets us go?
Secondly, the currency would have to have a value in order to be the inflation hedge that many followers believe their bitcoins to be. Bitcoin experts say that the "currency" has a limited number of coins and is therefore a scarce commodity. However, we know that there are now around 9000 crypto "currencies", which resemble inflation. What's more, it takes a country's insane amount of electricity to keep this useless "currency" Bitcoin alive, which is completely crazy in times of sustainability. But by far the biggest risk remains the politicians, who see Bitcoin and other crypto "currencies" as an attack on their own monopoly to print money. Accordingly, regulation will be tough and crypto "currencies" will be doomed.
Because despite everything, cryptocurrencies have gone through the roof in recent months, or as some bloggers and supposed influencers would say: "to the moon." The man with the little bird is Elon Musk, who has sent a few cryptic tweets on Twitter about "Dogecoin", a "currency" that has no meaning or purpose and is now worth 50 billion US dollars. One can only advise Dogecoin supporters to exchange all this for dollars, euros, gold, shares, real estate and, if you like, savings and fast cars.
This boom, and it is important to emphasize this comparison once again, can only be compared to the tulip bulb mania in Holland in the 17th century. There, at the end of an astonishing upward trend, prices increased tenfold in just a few weeks. At its peak, a tulip bulb is said to have been worth the equivalent of an Amsterdam merchant's house. And if you take a closer look, both even have a special feature: all that remains of the tulip mania is the base: the tulip. Bitcoin & Co. will also only have the basis left: the blockchain. Will it blossom as beautifully one day?
Reinhard Panse's Perspectives
30.4.2021
Reinhard Panse
Cryptocurrencies are the biggest bubble of all time that will burst one day. Anyone who has invested their money there should exchange it for shares - or at least buy a fast car with it.
A man in the USA puts a few words into the world via a bird and the value of a completely worthless coin adorned with a dog explodes. Sounds crazy, but that's exactly what happened and is probably the best symbol of what is probably the biggest mania of our time: crypto "currencies". The quotation marks are necessary, because Bitcoin & Co. by no means fulfill the functions of a currency.
On the one hand, you would have to be able to pay at any time, which is not possible at all because transactions take too long even for everyday shopping. Or will we have to wait a few minutes at Edeka in future until the doorman lets us go?
Secondly, the currency would have to have a value in order to be the inflation hedge that many followers believe their bitcoins to be. Bitcoin experts say that the "currency" has a limited number of coins and is therefore a scarce commodity. However, we know that there are now around 9000 crypto "currencies", which resemble inflation. What's more, it takes a country's insane amount of electricity to keep this useless "currency" Bitcoin alive, which is completely crazy in times of sustainability. But by far the biggest risk remains the politicians, who see Bitcoin and other crypto "currencies" as an attack on their own monopoly to print money. Accordingly, regulation will be tough and crypto "currencies" will be doomed.
Because despite everything, cryptocurrencies have gone through the roof in recent months, or as some bloggers and supposed influencers would say: "to the moon." The man with the little bird is Elon Musk, who has sent a few cryptic tweets on Twitter about "Dogecoin", a "currency" that has no meaning or purpose and is now worth 50 billion US dollars. One can only advise Dogecoin supporters to exchange all this for dollars, euros, gold, shares, real estate and, if you like, savings and fast cars.
This boom, and it is important to emphasize this comparison once again, can only be compared to the tulip bulb mania in Holland in the 17th century. There, at the end of an astonishing upward trend, prices increased tenfold in just a few weeks. At its peak, a tulip bulb is said to have been worth the equivalent of an Amsterdam merchant's house. And if you take a closer look, both even have a special feature: all that remains of the tulip mania is the base: the tulip. Bitcoin & Co. will also only have the basis left: the blockchain. Will it blossom as beautifully one day?
About the author
Reinhard Panse
Reinhard Panse is Chief Investment Officer and co-founder of FINVIA Family Office GmbH. Until February 2020, Reinhard Panse was a member of the Management Board and Chief Investment Officer for HQ Trust GmbH, which is owned by the Harald Quandt family. From 2004 until joining HQ Trust GmbH in 2011, Reinhard Panse was Chief Investment Officer of the UBS Sauerborn business unit created within UBS Deutschland AG. From 2001, Reinhard Panse was a member of the Management Board of Sauerborn Trust AG and its legal predecessors. He was responsible for the investment strategy and played a leading role in the holistic asset management and administration of large private assets. Reinhard Panse began his career by taking over capital market and client support activities at Feri GmbH in 1989, after having founded and managed his own wealth management as managing director.
